3 Zacks #1 Rank Uptrends

The weather here in Chicago may be unseasonably cool for June, but the market has been sweltering!

The S&P just reached a new all-time high, and its counterparts aren’t far from making their own milestones.

This is the type of heat you don’t want to escape from. So let’s take a look at a few Zacks Rank #1s (Strong Buys) that are trending higher along with the market and approaching their own highs:

Roku, Inc. (ROKU) hasn’t been public for very long, but streaming content isn’t exactly an age-old fixture of the market. Though with this company’s help, the industry may very well be a stalwart in short order as the old ways of watching T.V. and movies is changing quicker than the channels on your soon-to-be antiquated cable box.

The important thing is that Roku has beaten the Zacks Consensus Estimate for six consecutive quarters (out of only 7 reported) and established an average surprise of nearly 86% in the past four.

It beat by more than 62% in its most recent quarter, while revenue rose 51% and also topped our expectations.

Roku is still not profitable, but its pretty busy these days with international expansion and other future plans. But its status as a Zacks Rank #1 (Strong Buy) means that those earnings estimates are headed in the right direction.

It is expected to lose 60 cents this year, but that has improved by 20% in the past two months. The loss for next year is more than 22% narrower at 49 cents, which has improved by more than 18% in 60 days.

Investors like what they see as shares have soared nearly 250% this year.

We’re all looking for more bandwidth these days to support and keep up with the ever-evolving state of networking connectivity.

Ciena (CIEN) stands ready to do its part, and so far this networking, services and software company is succeeding. Just look at its fiscal second quarter report!

The company announced its fourth straight positive surprise as earnings of 48 cents beat the Zacks Consensus Estimate by 20%. It has an average surprise of nearly 19% over the past four quarters. Revenue jumped 18.5% from last year to $865 million.

Since the report, earnings estimates for this fiscal year and next are up 10% and 7.5%, respectively. In fact, analysts expect earnings for the fiscal year ending October 2020 to soar 23% from the year ending October 2019.     

CIEN is part of the fiber optics space, which has gained more than 23% so far this year to put it in the top 7% of the Zacks Industry Rank. However, CIEN has gained nearly 30% in that time.

So can it keep moving higher? Well, CIEN is certainly going to try. It continues to invest in data and optical fiber to satisfy increasing demand from telecom carriers to upgrade their networks. CIEN is also looking to expand in Asia Pacific, especially India.

Arconic (ARNC) was carved out of aluminum giant Alcoa in late 2016, and today is a global leader in multi-material, precision engineered products and solutions for a variety of industries.

Those industries include aerospace, automotive, construction, transportation, industrial, energy and defense.

It’s the first two spaces that we think hold the most potential for Arconic. Those areas were certainly performing well for the company when it reported first-quarter results in late April.

Earnings per share of 43 cents beat the Zacks Consensus Estimate by 7.5% and brought the four-quarter average surprise to nearly 13%. It was the sixth straight quarter of beating our expectations.

Revenue of $3.5 billion were up 3% year over year.

Earnings estimates have been on the rise over the past couple of months. The Zacks Consensus Estimate for this year is up 7.1% to $1.80 in that time, while next year has advanced 4% to $2.04.

Therefore, 2020 is currently expected to improve by more than 13% from 2019.

ARNC is also focused on cost reduction and operational improvements, as it moves toward separating its business into two separate companies next year.

Shares are up more than 43% this year.

These stocks were found using the Zacks #1 Rank Uptrends premium screen, which search for Zacks Rank #1s with upward price momentum, market-beating relative price strength and that are trading in the top third of their 52-week price range.

Click here to take a look at the parameters of this screen and the stocks that have passed the test.

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