4 Nasdaq Stocks At All-Time Highs
The Nasdaq touched an all-time on Thursday, breaching a record level achieved during the dot-com boom. The index gained 0.4% to close at 5,056.06, exceeding the level of 5048.62 recorded on Mar 10, 2000. However, unlike the bust which followed that record, current gains are not based on sudden investor enthusiasm. Instead, they are a result of a variety of factors which may contribute to long-term gains for the index.
The tech-heavy index gained around 14% last year and continued to display such strength during 1Q15, even as markets grappled with numerous concerns. The Nasdaq advanced 3.5% during this period, extending its winning streak to nine quarters, its longest stretch of quarterly gains ever. The index has gained 6.8% year-to-date and is currently well ahead of its counterparts.
The fact that the index achieved this record on a trading day which was not particularly busy is extremely significant. In fact, early last month, the index moved above the 5,000 mark, only to decline following weak economic data and mixed first-quarter earnings numbers. This was among several instances when the index moved close to its all-time record.
New Tech Environment
In fact, the index has taken considerable time to recover from the dot-com crash while the Dow and S&P 500 have breached record highs multiple times over the last few years. Over that period, the scenario for tech stocks has changed enormously. Apple Inc. (AAPL – Analyst Report) and Google Inc. GOOGL now dominate the index, unlike the Internet startups of 2000.
Shares of Apple gained 0.8% on Thursday, helping the index move upward. The tech giant now makes up 10% of the index’s total value and is its largest component. Google comes next, followed by Microsoft Corp. (MSFT – Analyst Report), which was the largest component 15 years ago. Incidentally, in 2000, the iPhone maker didn’t even feature among the top 20 companies on the Nasdaq.
An equally significant reason for the resurgence of the Nasdaq is the change in the composition of the index. During the heady days of the dotcom boom, tech stocks made up 65% of the Nasdaq Composite. Now this proportion has fallen to around 43%. As a result, gains are now coming from several industry groups. For instance, Dollar Tree, Inc. (DLTR – Analyst Report) and Monster Beverage Corp. (MNST– Analyst Report) have gained 15% and 29%, respectively this year. Social media is now a major contributor — Facebook, Inc. (FB – Analyst Report) is the fourth largest component of the index.
But undoubtedly, the biggest change is the emergence of biotech stocks as key players. For instance, Biogen Inc. (BIIB – Analyst Report) has gained 27% year-to-date and is up 48% over the last 12 months. Additionally, Gilead Sciences Inc. (GILD –Analyst Report) has gained 12% over the last year and 52% over the last 12 months. Amgen Inc. (AMGN – Analyst Report) has increased 6.2% till now this year and surged 46% over the last 12 months.
4 Stocks at Record Levels
To identity stocks which closed at all-time highs on Thursday and also have good growth prospects, we have relied on our new style score system.
Our Growth Style Score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth. Our research shows that stocks with Growth Style Scores of ‘A’ or ‘B’ when combined Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the growth investing space.
We have selected four stocks based upon the above criteria. Not only do these stocks have a favorable Zacks Rank, they also have a Growth Style Score of ‘A’ or ‘B’.
NV5 Holdings, Inc. (NVEE – Snapshot Report) offers professional, technical consulting and certification solutions for clients from the public and private sector.
NV5 Holdings holds a Zacks Rank #1 (Strong Buy) and has a Growth Style Score of ‘A.’ The stock closed at an all-time high of $ 18.65 on Thursday and has gained 43.5% year-to-date.
Tractor Supply Company (TSCO – Analyst Report) operates a retail farm and ranch store chain in the U.S. The company caters to tradesmen, small businesses and also on recreational farmers and ranchers.
Apart from a Zacks Rank #2 (Buy), Tractor Supply has a Growth Style Score of ‘A.’ The stock closed at an all-time high of $ 91.26 on Thursday and has gained 15.8% year-to-date.
ULTA Salon, Cosmetics & Fragrance, Inc. (ULTA – Snapshot Report) is a retailer that offers one-stop shopping for mass, prestige as well as salon products and salon services in the U.S.
ULTA Salon holds a Zacks Rank #2 (Buy) and has a Growth Style Score of ‘A.’ The stock closed at an all-time high of $ 156.99 on Thursday and has gained 22.8% year-to-date.
Intuit Inc. (INTU – Snapshot Report) provides business and management solutions for a wide range of customers, ranging from institutional clients to individual consumers.
Apart from a Zacks Rank #2 (Buy), Intuit has a Growth Style Score of ‘B.’ The stock closed at an all-time high of $ 101.44 on Thursday and has gained 10% year-to-date.
On an inflation-adjusted basis, the Nasdaq is well below its Mar 2000 level. Taking into account January’s CPI data, it would have to cross 6891.93 to break this record and it may well do so. One of the reasons is that valuations are nearly 10 times lower than levels witnessed 15 years ago. Clearly, the index may continue to hit new records in the months ahead.