Build A Christmas Tree With Top-Ranked Stocks

2017 has been a banner year for the U.S. stock market and the trend is likely to continue next year. The tax reform will act as a major driving factor for stocks coupled with strong corporate earnings and accelerating economic growth in many parts of the world.

As Christmas tree symbolizes good tidings, let’s build a similar tree for stock-loving investors that could rake in big gains in 2018.

Starting with the base – the most valuable portion of the tree – the technology sector seemsto be a perfect fit here as it is placed in the top 6% among the 16 broad Zacks sectors. Within the Industry classification, Semiconductor – General is expected to outperform. Being a cyclical sector, it tends to move higher with market rallies. New areas such as autonomous cars, cloud computing, gaming, wearables, VR headsets, drones, virtual reality devices, Internet of Things (IoT) and artificial intelligence continued to fuel exceptional growth.

Intel INTC having a Zacks Rank #1 (Strong Buy) seems an excellent pick. The stock saw solid earnings estimate revision of 19 cents for the next year over the past 90 days and falls in the Industry having a Zacks Rank in the top 1%. 

The stocks that can form the leaves of the tree are Westlake Chemical Corporation (WLK – Free Report) from the basic materials sector and Acco Brand Corporation ACCO from industrial products sector. Both the sectors are expected to benefit from Trump’s pro-growth policies, especially big spending in infrastructure and thus carry a sector Rank in the top 13%.

Westlake Chemical has a Zacks Rank #1 and is part of an industry with a Rank in the top 10%. It has seen solid earnings estimate revision of $1.32 for the next year over the past 90 days with an expected growth rate of 21.67%. On the other hand, Acco Brand saw positive earnings estimate of 4 cents for the next year over the past 90 days, with an expected earnings estimate of 6.98%. It has a Zacks Rank #2 (Buy) and Industry Rank in the top 1%.