5 Solid Stocks to Buy

5 Solid Stocks to Buy

  • August 31, 2020
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Home sales generally slow down in summer but this year seems to be an exception, thanks to the pandemic that is making buyers flock to markets after for almost two months of lockdowns. Pending home sales, which measure signed contracts to purchase existing homes, increased almost 6% in July from June, according to the National Association of Realtors (NAR).

Needless to say, the housing market in the United States is once again booming, with both homebuilders and buyers showing confidence in the economy. This also signals that the worst of the economic downturn is probably over. Also, home-buying activity is getting a further boost from record-low mortgage rates.

Pending Home Sales Jump Annually

According to NAR, pending home sales jumped 5.9% to 122.1 in July from June. Sales were 15.5% higher year over year. Regionally, pending home sales in the Northeast rose 25.2% in July and 20.6% from a year ago. In the Midwest, sales rose 3.3% monthly and 15.4% year over year.

Mortgage rates were at record lows in July, giving buyers additional purchasing power. Home prices, however, continue to rise on stiff competition in the market. The median home price in July hit a record $304,100, as measured by closed sales.

Homebuilding Market Soaring

This is the third consecutive month that pending home sales have jumped. That said, it’s the overall homebuilding market that is putting up a great show. Sales of new homes rose a sharp 13.8% in June to a seasonally adjusted annual rate of 776,000 units, the highest level since July 2007, according to the Commerce Department. The increase follows a 19.4% jump in May.

Moreover, homebuilder confidence in the newly built, single-family home market jumped 6 points to 78 in August on the National Association of Home Builders/Wells Fargo Housing Market Index. The index is now at the highest level in the 35-year history of the monthly series and matches the record it had set in December 1998. Anything above 50 is considered positive sentiment.

Understandably, homebuilders are benefiting from the severe shortage of existing homes for sale. There were already fewer homes to meet demand before the pandemic, and now fewer homeowners are willing to list their homes for sale.

Many other factors are also helping home sales as states continue to relax stay-at-home restrictions. Coronavirus resulted in record job losses in April, and a collapse in manufacturing output and retail sales. People backed out from buying homes as they feared blocking their money by investing in property. However, U.S. consumer confidence and consumer spending started to improve in May, indicating that life is somewhat going back to normal.

Our Choices

The rise in pending and new home sales along with growth in homebuilding activity indicates buyers interest with gradual reopening of the economy. In this opportune time, we suggest investing in the following five stocks with a Zacks Rank #1 (Strong Buy) that are likely to gain ahead. You can see year over year.

The company’s expected earnings growth rate for the current year is 32.8%. The Zacks Consensus Estimate for current-year earnings has improved 20% over the past 30 days. 

The company’s expected earnings growth rate for the current year is 36.7%. The Zacks Consensus Estimate for current-year earnings has improved 91.2% over the past 30 days. 

The company’s expected earnings growth rate for the current year is 18%. The Zacks Consensus Estimate for current-year earnings has improved 34.4% over the past 60 days. 

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The company’s expected earnings growth rate for the current year is 42.8%. The Zacks Consensus Estimate for current-year earnings has improved 47.2% over the past 60 days. 

The company’s expected earnings growth rate for the current year is 26.2%. The Zacks Consensus Estimate for current-year earnings has improved 56.9% over the past 30 days.

Today’s Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q2 2020, while the S&P 500 gained an impressive +44.0%, five of our strategies returned +50.9%, +93.8%, +122.2%, +153.0%, and even +156.8%.

This outperformance has not just been a recent phenomenon. From 2000 – Q2 2020, while the S&P averaged +5.5% per year, our top strategies averaged up to +51.7% per year.

Click to get this free report
 
PulteGroup, Inc. (PHM) : Free Stock Analysis Report
 
D.R. Horton, Inc. (DHI) : Free Stock Analysis Report
 
Meritage Homes Corporation (MTH) : Free Stock Analysis Report
 
M.D.C. Holdings, Inc. (MDC) : Free Stock Analysis Report
 
MI Homes, Inc. (MHO) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
PulteGroup, Inc. (PHM) : Free Stock Analysis Report
 
D.R. Horton, Inc. (DHI) : Free Stock Analysis Report
 
Meritage Homes Corporation (MTH) : Free Stock Analysis Report
 
M.D.C. Holdings, Inc. (MDC) : Free Stock Analysis Report
 
MI Homes, Inc. (MHO) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

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