Finding the latest and greatest industry is not easy and many investors are often late to the party. When a company is hot, other stocks in the sector will typically move in sympathy with that companies stock. This momentum can lead to strength in an entire sector.
The Zacks Industry rank gives investors a clear view into which industries are outperforming. When an investor has chosen what industry looks most attractive, they can use the Zacks Rank to pick the best stocks available within that particular industry.
I wanted to review some top ranked industries and stocks that look poised to lead that industry in the near future. This is a good habit for any investor to get into and can be done easily by navigating through the zacks.com website.
On the menu bar on the top on the site, highlight “stocks” and click on “Zacks industry Rank”. There you can find all 265 industries and where a company might rank amongst them. By clicking on an industry, you can bring up a list of top ranked stocks and research the company further.
I picked out four Zacks #1 Ranked (Strong Buy) stocks that are in the top 35 Industries. In order to find these stocks quickly, I did a screen setting parameters for Zacks Rank (=1) and Zacks Industry Rank (<=20). The screener gave me 51 stocks as a result in which I picked. I’d encourage investors to use my approach in the future when scanning for their own stocks.
The List
Taiwan Semiconductor (TSM – Snapshot Report) is a Zacks Rank #1(Strong Buy) that is s the world’s largest dedicated integrated circuit foundry. As a foundry, the Company manufactures ICs for its customers based on their proprietary IC designs using its advanced production processes. Semiconductor fabrication foundries are ranked number 1 out of 265 of the Zacks Industry rank.
Taiwan Semi has a market cap of $131 Billion and a Forward PE of 14. The company pays a dividend of 2.28% and has an expected EPS growth of 15%. The stock sports a Zacks Style Score of “B” in Value and a VGM score of “B”.
Estimates for TSM are rising for fiscal year 2016. Over the last 90 days, we have seen revisions jump 4.6% from $1.73 to $1.81. The company reports earnings on April 21st; it wouldn’t be a surprise to see them beat on EPS as they have beaten every quarter for the last four years. The stock has trended higher over that time period, up almost 100% since early 2012.
