HomeMost PopularInvestingBuy These Momentum Stocks as Fed Leaves Rates Unchanged but Markets Fall

Buy These Momentum Stocks as Fed Leaves Rates Unchanged but Markets Fall

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The recent decision by the Federal Reserve to maintain interest rates at their current levels resulted in a late selloff and a significant decline in today’s trading session, with both the S&P 500 and Nasdaq experiencing over a 1% decrease.

Although the target range for the federal funds rate remains unchanged at 5.25%-5.50%, investors were left anticipating future rate hikes due to Fed Chair Jerome Powell’s indication that a soft landing should not be expected. This belief caused the markets to fall.

Amidst these market conditions, investors may be interested in identifying stocks that have the potential to rebound and overcome temporary setbacks. This leads us to Zacks’ highly ranked stocks with an β€œA” Zacks Style Scores grade for Momentum, which are expected to remain attractive.

St Louis FED
Image Source: St Louis FED

Technology Stocks with Strong Momentum

The technology sector has shown significant improvement in earnings estimate revisions this year, and despite the recent market decline, many investors are still seeking opportunities among tech stocks.

While large tech conglomerates may be top of mind, it’s important not to overlook Asure Software ASUR and Axcelis Technologies ACLS, both of which have a Zacks Rank #1 (Strong Buy).

Asure Software is part of the top-rated Zacks Internet-Delivery Services Industry, which ranks in the top 2% of all Zacks industries. This company offers web-based workforce management solutions and has recently seen a significant increase in earnings estimates for fiscal years 2023 and 2024. Furthermore, Asure Software’s stock is currently priced at $8 per share, trading at a reasonable forward earnings multiple.

Zacks Investment Research
Image Source: Zacks Investment Research

Axcelis Technologies is benefiting from a strong business environment, particularly in the Zacks Electronics-Manufacturing Machinery Industry. The company provides ion implantation equipment for semiconductor fabrication and has experienced an increase in earnings estimates for fiscal years 2023 and 2024. Axcelis Technologies is expected to see a substantial growth of 28% this year and 16% in fiscal year 2024.

Zacks Investment Research
Image Source: Zacks Investment Research

Energy Stocks with Strong Momentum

Given the potential for crude oil prices to reach $100 per barrel, Vermilion Energy VET presents an attractive option for investors focused on momentum. The company, with a Zacks Rank #1 (Strong Buy), operates as a Canadian-based energy producer concentrated on light oil and natural gas exploitation. Furthermore, inflationary concerns may lead to higher commodity prices outside of oil, making REX American Resources REX an enticing option with its Zacks Rank #2 (Buy).

Zacks Investment Research
Image Source: Zacks Investment Research

Conclusion

These highly-ranked Zacks stocks are expected to outperform the broader market, especially as concerns over rising interest rates diminish. By considering companies operating within vibrant industries, investors may find opportunities for growth. It is important to closely monitor the earnings prospects of these stocks as inflationary concerns persist.

Download the 7 Best Stocks for the Next 30 Days from Zacks Investment Research for free

Axcelis Technologies, Inc. (ACLS) : Free Stock Analysis Report

Asure Software Inc (ASUR) : Free Stock Analysis Report

REX American Resources Corporation (REX) : Free Stock Analysis Report

Vermilion Energy Inc. (VET) : Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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