U.S. stocks are playing a big-dollar game of "follow the leader" in 2017--leadership is being rewarded in a big way in this market.
Case in point: while the big S&P 500 has been enduring a "Spring Slump" of sorts for the past couple of months, the stocks that started the year outperforming are continuing to lead the averages higher this month.
Want to avoid the Spring Slump? All you have to do is follow the leaders.
For instance, while the market has shed almost 3% of its market value since peaking back on March 1, about 40% of the stocks within the S&P are actually higher during that timeframe. They're the leaders. And those stocks are the ones that are statistically predisposed to keep on outperforming in the weeks ahead.
To figure out which leading names you should focus on for your portfolio, we're turning to a fresh set of Rocket Stocks worth buying for gains this week ...
In case you're not familiar with them, Rocket Stocks are our list of companies with short-term gain catalysts and longer-term growth potential. To find them, I run a weekly quantitative screen that seeks out stocks with a combination of analyst upgrades and positive earnings surprises to identify rising analyst expectations, a bullish signal for stocks in any market. After all, where analysts' expectations are increasing, institutional cash often follows. In the past 395 weeks, our weekly list of plays has outperformed the S&P 500's record-breaking run by 77.95%.
So, without further ado, here's a look at this week's Rocket Stocks.
Johnson & Johnson
Blue chips don't get any bluer than $337 billion healthcare giant Johnson & Johnson (JNJ) . Likewise, this stock's performance leadership year-to-date has been hard to miss--J&J is up 8.5% since the calendar flipped to January, besting the rest of the S&P by a factor of more than 2-to-1. And Johnson & Johnson's price action isn't showing any signs of slowing down as we head deeper into April.
Johnson & Johnson is one of the best-diversified stocks in the healthcare sector. The firm's businesses span consumer products, medical devices, pharmaceuticals and diagnostics. The consumer-facing side of things includes such household names as Band-Aid, Tylenol, Neutrogena and Acuvue--but it's the non-consumer arm of the business, namely drugs and medical devices, that makes up the lion's share of J&J's revenues. In total, those two segments total approximately 80% of overall sales.
Financially, J&J is in excellent shape, with a $19.5 billion net cash position on its balance sheet. While the battle over healthcare on Capitol Hill has put some black clouds over the entire healthcare sector, Johnson & Johnson's diverse income statement and cash creation abilities make it an attractive bet in 2017. Meanwhile, buyers are clearly in control of the price action in this stock right now.