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New stock ideas

Few markets have been as hot as this one. Consider this: This past Q1 was the ninth-best first quarter ever for the S&P 500, and the first 6 months of 2024 is tracking toward the second-best first half ever. Recently, stocks have been on their longest daily streak without a 2% or greater loss since the financial crisis.

If you think the bullish momentum for stocks could continue and are looking for new investing ideas to consider, you might explore some preset strategies from the Stock Screener. Here are 3 of those screens, plus the top 5 results for each.

Increasing sales and margins

This screen from Zacks Investment Research focuses on companies with strong revenue and margin growth. It is limited to those with a Zacks “Buy” recommendation and looks for companies with the highest revenue growth (trailing 12 months vs. prior 12 months) in their industry as well as those in the top 20% of companies with the highest increase in trailing 12-month margins vs. the company’s 5-year margins. It also sorts for companies trading at $5 or higher with an average 90-day trading volume of 50,000 shares a day or more.

Here are the top 5 results of this screen, sorted by market cap, as of June 27, 2024:

  • Nvidia ()
  • PDD ()
  • ServiceNow ()
  • MercadoLibre ()
  • Apollo ()

When evaluating the output of a screen, consider the suitability of your chosen screening criteria. For example, margins across industries can vary substantially. Consequently, looking for increases in margin rates, rather than simply looking for the highest margin rates across the entire market, may be a more optimal approach. This can help avoid weeding out companies with strong industry margins but are relatively low compared with other higher-margin industries.

Thank you PEG

Another screen from Zacks Investment Research, this one focuses on PEG (P/E growth). It's a value screen that tries to also incorporate growth. It is limited to companies with a Zacks Buy rating and it looks for stocks that have the lowest (i.e., best) PEG ratios in their respective industries. The screen filters for companies priced above their median 5-year historical, 5-year projected, and current-year estimated PEG ratio. It also sorts for companies trading at $5 or greater with a 90-day average trading volume of 50,000 shares a day or more.

Here are the top 5 results of this screen, sorted by market cap, as of June 27, 2024:

  • Microsoft ()
  • Taiwan Semiconductor ()
  • Salesforce ()
  • Super Micro Computer ()
  • Baker Hughes ()

It’s worth noting that most of these results are in the technology sector. A consideration when adding individual stocks to your portfolio is concentration risk within a particular sector or industry. Concentration risk is essentially putting your eggs in a single basket—if you are not diversified across the rest of your investments.

Dividend growers

If you are looking for stocks with strong dividends, the dividend growers screen from Zacks tries to find companies with a history of increasing their dividend over time. Dividend strength can reveal a company that believes its financial position is strong both now and looking ahead. This screen is limited to companies with a Zacks Buy or Hold rating and it looks for stocks with an increasing dividend this year, a positive 5-year history of increasing dividends, double-digit growth rates at an attractive multiple, and above median increasing cash flows.

Here are the top 5 results of this screen, sorted by market cap, as of June 27, 2024:

  • Intesa Sanpaolo ()
  • Wal-Mart De Mexico ()
  • Vale ()
  • Dow ()
  • Western Midstream ()

Evaluating the output can be a useful step when running a screen. For instance, the majority of the results of this screen are foreign-based companies. While international investments may provide diversification benefits, foreign investments have unique risks and considerations. You should fully understand the risks associated with foreign markets before investing.

What’s next after running a screen?

More research is needed to determine if any of these investments are right for you. Know the risks involved and evaluate each investing opportunity within the context of a well-diversified investment strategy that conforms to your specific time horizon, objectives, and risk parameters.

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Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. Investing in stock involves risks, including the loss of principal.

Foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuations, all of which may be magnified in emerging markets. Zach's and Fidelity Investments are independent entities and are not legally affiliated.

Indexes are unmanaged. It is not possible to invest directly in an index.

The S&P 500® Index is a market capitalization–weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance. S&P and S&P 500 are registered service marks of Standard & Poor's Financial Services LLC.

Past performance is no guarantee of future results.

Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.

The Fidelity stock screener is a research tool provided to help self-directed investors evaluate these types of securities. The criteria and inputs entered are at the sole discretion of the user, and all screens or strategies with preselected criteria (including expert ones) are solely for the convenience of the user. Expert Screeners are provided by independent companies not affiliated with Fidelity. Information supplied or obtained from these Screeners is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell securities, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy or approach to screening or evaluating stocks, preferred securities, exchange-traded products, or closed-end funds. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from its use. Determine which securities are right for you based on your investment objectives, risk tolerance, financial situation, and other individual factors, and reevaluate them on a periodic basis.

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