Small-cap stocks have been on a roll lately. The Russell 2000 index just posted its strongest quarter ever, soaring over 22.1%, while the S&P 500 increased 9.1% and the Dow grew by 8.1%.
My Breakthrough Stocks, on average, have continued to benefit from an early “January effect” that begins as yearend pension funding, annual gift-giving and other positive seasonal events create buying pressure on higher trading volume.
Yearend pension funding and annual gift-giving often create forced buying pressure under smaller-cap stocks, which are more sensitive to volume. As a result, they tend to flourish between November and May.
This played out about a year ago. You can see in the chart below how the Russell 2000 grew over 14% from November 2019 through mid-January 2020.
What has been even more amazing this year about the fourth quarter is that many of my small-cap Breakthrough Stocks appreciated on light trading volume. The first quarter could bring much higher trading volume, so the price appreciation potential could be even stronger, thanks to their superior earnings and sales growth.
FactSet analysts predict the S&P 500 will achieve year-over-year earnings growth of 22.1% in full-year 2021, which is well above the 10-year average growth rate of 10%. Revenue growth should also rise 7.9%, which is close to double the 10-year average rate of 4.5% revenue growth.
Of course, I fully anticipate my own fundamentally superior Breakthrough Stocks are poised to do even better this season thanks to strong forecasted sales and earnings.
My Breakthrough Stocks’ average sales are forecasted to accelerate to 102.6% in the fourth quarter, up from an average of 80.5% in the third quarter. Naturally, due to profit margin expansion, Breakthrough Stocks’ average earnings are forecasted to rise to 455.9% in the fourth quarter, down slightly for an average of 544.2% in the third quarter.
However, my Breakthrough Stocks have had their earnings estimates revised 41.4% higher in the past three months, so they are expected to post big earnings surprises for the fourth quarter, which, in turn, should drive them higher as Wall Street cheers the strong results
One of the reasons that my Breakthrough Stocks are posting incredible sales and earnings growth is that the year-over-year comparisons remain very favorable and will continue for much of 2021 due to the impact Covid-19 has had on the U.S. economy.
I’ll discuss much more about the trends fueling analysts’ predictions about the incredible earnings and sales in my Breakthrough Stocks January Monthly Issue. And I’ll lay out what it all means for my Breakthrough Stocks, which will be released tomorrow after the market close.
The bottom line: I know there have been a lot of media and political distractions, which is why focusing on fundamentally superior stocks is the best way to control your own investing destiny. The upcoming announcement season is expected to be stunning and I fully expect wave-after-wave of better-than-expected results to propel my stocks substantially higher! I also expect very strong guidance, so I remain especially positive for my Breakthrough Stocks.
As I said, I’ll talk much more about the trends that will propel stocks higher in the coming months in tomorrow’s Breakthrough Stocks January Monthly Issue. I’ll also unveil three new buy recommendations.
Now, if you join me at Platinum Growth Club, you will have access to this Breakthrough Stocks January Monthly Issue and my three newest recommendations and more than 100 stocks across all my services – Growth Investor, Breakthrough Stocks and Accelerated Profits.
Of course, you don’t have to invest in all 100+ stocks to grow and prosper this year. If you’d rather start small, I have you covered there, too. My Platinum Growth Club also comes with my exclusive Model Portfolio. I handpick all of my Model Portfolio recommendations from my different services, so you can rest assured that you’re always invested in the crème de la crème.
It’s a great time to join, as I also recently made several changes to my Platinum Growth Club Model Portfolio last week to ensure my Platinum Growth Club subscribers are “locked and loaded” for the New Year, including selling four stocks to make way for eight new, exciting names.
If you’re interested, please click here for full details. And if you decide to sign up today, not only will you have instant access to all of my recommendations, but you’ll be just in time for my first Platinum Growth Club Live Chat Event of 2021, scheduled for next Monday, January 11, at noon. I will be covering several topics, including my latest thoughts on the current market environment. I will also take some time at the end to answer subscriber questions. So, if you join me at Platinum Growth Club today, don’t forget to send me your questions early!
P.S. On Monday, I released my latest Portfolio Grader 500, a quarterly list of some of the best and worst stocks on the market right now. In it, you have access to 250 A- and B-rated powerhouses and 250 D- and F-rated sell immediately stocks. As a valued Platinum Growth Club subscriber, this reference guide is yours free. You can check it out here.
You’ll also have access to a select group of recommendations that my InvestorPlace colleague Matt McCall and I have lined up for investors this year. We call it our Power Portfolio 2021, which is “locked and loaded” with 11 stocks we expect will crush the market, including our latest recommendation, a semi-conductor leader, which we released Wednesday. Get all the details here.
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below: