6 Stocks With Great Upside Potential Even In A Choppy Market
Zacks Investment Research | Feb 06, 2018 09:18PM ET
After a violent sell-off in the last couple of days, the U.S. stock market roared back with the biggest rally seen in several months amid heavy trading and huge swings. The Dow Jones jumped 2.3%, marking its biggest one-day increase since January 2016, while the S&P 500 climbed 1.7%, marking its best rise since November 2016.
The strong comeback was prompted by investors rush to buy beaten down sectors and stocks. Additionally, the fundamentals remained intact as the euphoria surrounding the biggest tax overhaul in decades, robust corporate earnings and optimism on global growth are acting as the key catalysts. A massive $1.5-trillion tax cut will create an economic surge, boosting job growth and reflation trade. It will further accelerate earnings, leading to increased dividend and buyback activities. Additionally, low unemployment, higher consumer spending and rising consumer confidence are adding the strength in the market.
However, threats of higher inflation have made investors jittery following strong wage growth data. Higher inflation could push the Fed to raise interest rates quicker than anticipated, resulting in higher borrowing costs for companies that will hurt economic growth and in turn the most powerful bull market, which is drawing close to completing nine years. Additionally, global trade fears, political instability in Washington, and geopolitical tensions remain an overhang on the stocks.
Given heightened volatility, investors should bet on stocks that have the potential to ride higher even in a choppy market. Below, we have chosen six such picks based on five parameters: Zacks Rank #1(Strong Buy) or 2 (Buy), a VGM Score of B or better, 100% broker rating of Strong Buy + Buy, a top-ranked industry and lower P/E than the industry. A lower P/E ratio indicates that the stock is cheap and undervalued in the industry. Additionally, these stocks trade in good volumes, indicating strong liquidity.
Huntsman Corporation (NYSE:HUN)
Based in The Woodlands, TX, Huntsman is among the world's largest global manufacturers of differentiated and commodity chemical products for a variety of industrial and consumer applications. You can see Zacks Investment Research
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