Table of Contents
Table of Contents
Best Value Stocks
Fastest-Growing Stocks
Stocks With the Most Momentum
Top-Stock Investing Advantages
Top-Stock Investing Risks
Southwestern Energy, Mirati Therapeutics, and First Solar are top stocks in Russell 3000 for value, growth, and momentum, respectively
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Published June 01, 2023
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TopU.S. stocks for June include First Solar Inc. (FSLR), Nvidia Corp. (NVDA), and Penumbra Inc. (PEN). The share prices of all have more than doubled in the past year, as the Russell 3000, a capitalization-weighted stock market index used as a benchmark for the entire U.S. stock market, has returned 1%.
Below, we list the top five stocks in each category: value, growth, and momentum. All data below is as of May 26.
Best Value Stocks
Value investingis afactor-based investingstrategy that involves picking stocks you believe are trading for less than what they are intrinsically worth, usually measured by the ratio of the stock’s price to one or morefundamental business metrics. A widely accepted value metric is theprice-to-earnings (P/E) ratio. Value investors say that if a business is cheap compared with its intrinsic value (as measured by its P/E ratio, in this case), then the stock price may rise faster than others as the price comes back in line with the worth of the company. These are among the stocks with the lowest 12-month trailing P/E ratio.
| Best Value Stocks | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing P/E Ratio | |
| Southwestern Energy Co. (SWN) | 4.97 | 5.5 | 0.9 |
| Chesapeake Energy Corp. (CHK) | 77.63 | 10.4 | 1.6 |
| First Citizens BancShares Inc. (FCNCA) | 1273.15 | 18.5 | 1.8 |
| Ovintiv Inc. (OVV) | 34.44 | 8.4 | 2.0 |
| DISH Network Corp. (DISH) | 6.66 | 3.5 | 2.0 |
Source:YCharts
- Southwestern Energy Co.:An oil and natural gas explorer and producer with properties in Pennsylvania, Ohio, West Virginia, and Louisiana. In June 2022, the company authorized a $1 billion share repurchase program that can continue through the end of 2023.In the first quarter, Southwestern reported net income of $1.9 billion, swinging from a net loss of $2.7 billion in the year-ago quarter, and a 28% year-over-year revenue decline.
- Chesapeake Energy Corp.:Chesapeake explores and develops oil and gas properties throughout the U.S. In February, Chesapeake Energy agreed to sell a portion of its Eagle Ford assets to global chemicals company INEOS for approximately $1.4 billion.In the first quarter of 2023, Chesapeake Energy's revenue nearly tripled from the year before and net income totaled $1.4 billion, or $9.60 a share.
- First Citizens BancShares Inc.: This is a holding company that offers banking services such as deposit products, consumer loans, and commercial leases. First Citizens' net income surged in the most recent quarter after the lender acquired the assets and liabilities of Silicon Valley Bank at a steep discount.
- Ovintiv Inc.: Ovintiv owns and operates various natural gas and oil properties in the U.S. and Canada.
- DISH Network Corp.:A TV service provider that offers programming packages, Sling TV, and wireless subscriber plans. On May 8, the company released its first-quarter earnings results. Net income fell 46%, and overall revenue declined by 9% compared with the same period in 2022. DISH lost over half a million Pay-TV subscribers in the first quarter, and its retail wireless segment posted a 9% reduction in subscribers compared with the previous year.
Fastest-Growing Stocks
These are the top stocks as ranked by agrowthmodel that scores companies based on a 50/50 weighting of their most recent quarterly year-on-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth.
Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.
| Fastest-Growing Stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth Latest Quarter (%) | Revenue Growth Latest Quarter (%) | |
| Mirati Therapeutics Inc. (MRTX) | 38.46 | 2.2 | N/A (see company description) | 911 |
| Rivian Automotive Inc. (RIVN) | 15.14 | 14.2 | N/A (see company description) | 596 |
| Apollo Global Management Inc. (APO) | 65.42 | 37.1 | N/A (see company description) | 515 |
| Chesapeake Energy Corp. (CHK) | 77.63 | 10.4 | N/A (see company description) | 363 |
| Norwegian Cruise Line Holdings Ltd. (NCLH) | 14.48 | 6.1 | N/A (see company description) | 249 |
Source:YCharts
- Mirati Therapeutics Inc.:A biotechnology company that develops novel medications for the treatment of cancer. The company's flagship medication is Krazati, which treats metastatic non-small cell lung cancer. Note Mirati Therapeutics doesn't have an EPS growth figure in the table above because the company reported a loss per share in the most recent quarter.
- Rivian Automotive Inc.: This is an electric vehicle manufacturer that produces SUVs, trucks, and delivery vans. Note Rivian Automotive doesn't have an EPS growth figure in the table above because the company reported a loss per share in the most recent quarter.
- Apollo Global Management Inc.:A private equity firm that invests in buyouts, distressed assets, and acquisitions. In March, Apollo Global announced that a fund managed by affiliates agreed to acquire Univar Solutions, a specialty chemical distributor, in an all-cash transaction totaling $8.1 billion.On April 17, the company announced a $500 million investment in education technology company Cengage Group. Note Apollo Global Management doesn't have an EPS growth figure in the table above because the company reported a net loss per share for the first quarter of 2022.
- Chesapeake Energy: See company description above. Note Chesapeake Energy doesn't have an EPS growth figure in the table above because the company reported negative EPS in the 2022 first quarter.
- Norwegian Cruise Line Holdings Ltd.:This is a cruise company offering international itinerary packages. Note Norwegian Cruise Line doesn't have an EPS growth figure in the table above because the company reported a net loss per share in the most recent quarter.
Stocks With the Most Momentum
Momentum investing is a factor-based investing strategy that involves buying a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform won't suddenly disappear. In addition, other investors seeking to benefit from the stock’s outperformance will often purchase it, further bidding up its price.
These are the stocks that had the highest total return over the past 12 months.
| Stocks With the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| First Solar Inc. (FSLR) | 201.77 | 21.6 | 196 |
| NVIDIA Corp. (NVDA) | 389.46 | 962.0 | 118 |
| Penumbra Inc. (PEN) | 306.5 | 117.2 | 116 |
| Netflix Inc. (NFLX) | 378.88 | 168.4 | 98 |
| Axon Enterprise Inc. (AXON) | 194.95 | 14.4 | 98 |
| Russell 3000 | N/A | N/A | 1 |
Source:YCharts
- First Solar Inc.: A solar energy company that makes cadmium telluride solar modules for commercial and industrial uses. Early this year, First Solar sold its 141 MW power plant located in Chile to the company Toesca for an undisclosed amount. On April 27, the company reported first-quarter earnings, with net sales declining by 45% to $548 million. Nonetheless, the company reported net income of $43 million, swinging to a profit from a $43 million loss in the year-ago quarter. The company's stock price rose by approximately 25% in the two weeks after earnings.
- NVIDIA Corp.: This is a semiconductor company that derives most of its revenue from selling graphics processing units (GPUs) for gaming PCs. On May 24, the company reported first-quarter fiscal year 2024 earnings. Nvidia reported 14% growth in data-center revenue and expanded artificial intelligence (AI) development with multiple partnerships and the introduction of AI Foundations, a generative AI language learning model. Following this earnings report, the company's share price rose by 24%, bringing it briefly to a $1 trillion market cap.
- Penumbra Inc.: Penumbra develops and sells minimally invasive medical devices that help remove blood clots from the body.
- Netflix Inc.: An entertainment streaming company that offers a wide range of original and licensed movies and TV shows.
- Axon Enterprise Inc.: Axon manufactures and sells conducted-energy weapons under the Taser brand, and cloud-based video equipment and software for use by law enforcement. Axon has experienced steady growth over the past year. Axon's YOY revenue jumped 34% in the first quarter on the release of multiple new products and 51% growth in cloud sales.
Top-Stock Investing Advantages
To become a top stock, a company most likely produces positive trends in its earnings, revenue, and share price. Momentum in these areas indicates a well-run business that has the potential to keep generating profit and creating shareholder value.
Investors can use free stock-screening sites like Finviz to find top stocks, filtering by both fundamental and technical metrics. For example, a trader could find a top stock by scanning for companies that are trading at a new 52-week high or that have reported higher earnings consistently over the past five years.
Liquidity
Top stocks typically receive extensive media coverage and are followed by leading Wall Street analysts. This usually means more liquidity, leading to better prices and faster trade executions. Moreover, top stocks with ample liquidity are more difficult for larger players to manipulate, helping to keep a fair and orderly market in them.
Top-Stock Investing Risks
Missed Opportunities
Investing only in top large-cap stocks means that investors may miss profitable opportunities in other areas of the stock market. Some of the most significant gains come from small-cap stocks under the radar. For example, an unknown small biotechnology company may announce a breakthrough discovery that propels its share price higher. Even if investors favor trading top stocks, allocating a portion of capital to other stock groups helps avoid missing compelling opportunities.
Trend Reversals
The trend is your friend—until it's not. Even top large-cap stocks with a track record of earnings growth and creating shareholder value encounter unforeseen challenges. For example, cruise line companies, such as Carnival Corp. (CCL) and Norwegian Cruise Line Holdings Ltd. (NCLH), reported increased revenue in the years leading up to the pandemic but watched their top line sink to unprecedented lows for several years due to no-sail orders and a collapse in passenger demand during the worldwide health crisis.
When investing in top stocks, investors should always use a stop-loss order to protect against sudden trend reversals.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read ourwarranty and liability disclaimerfor more info.
As of the date this article was written, the author does not own any of the above stocks.
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Southwestern Energy Co. "Southwestern Energy Announces First-Quarter 2023 Results."
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Chesapeake Energy Corp. "Chesapeake Energy Corporation Reports 2023 First-Quarter Results."
First Citizen BancShares Inc. "Corporate Overview."
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Hollywood Reporter. "Dish Loses 552,000 Pay TV Subscribers in First Quarter."
Mirati Therapeutics Inc. "Medicines."
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Norwegian Cruise Line Holdings Ltd. "Norwegian Cruise Line Holdings Reports First-Quarter 2023 Financial Results."
First Solar Inc. "First Solar Completes Sale of 141 MW Luz Del Norte Power Plant to Toesca."
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Axon Enterprises Inc. "Axon Reports Q1 2023 Revenue of $343 Million, Up 34% YOY, Raises Outlook."
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Related Terms
What Are Small-Cap Stocks, and Are They a Good Investment?
A small-cap stock has a total share value of $300 million to $2 billion, although the precise figures used vary among brokerages.
Gross Domestic Product (GDP): Formula and How to Use It
Gross domestic product is the monetary value of all finished goods and services made within a country during a specific period.
Biotechnology ETF: What It Is and How To Invest
A biotechnology industry exchange-traded fund (ETF) invests in companies that combine biology and technology to develop innovative products and services.
Russell 2000 Index Definition and Key Metrics
The Russell 2000 Index measures the performance of the 2,000 smaller stocks that are listed in the Russell 3000 Index.
Value Investing Definition, How It Works, Strategies, Risks
Value investors like Warren Buffett select undervalued stocks trading at less than their intrinsic book value that have long-term potential.
What Is the Russell 1000 Index? Definition, Holdings, and Returns
The Russell 1000 Index, a subset of the Russell 3000 Index, represents the 1000 top companies by market capitalization in the United States.
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I'm Noah Bolton, an experienced financial writer with a background in freelance writing, particularly focused on the stock market and financial advice for beginners. Over the past year, I've dedicated my efforts to creating insightful content on investing, providing valuable information to help readers navigate the complexities of the financial world.
Now, let's delve into the concepts discussed in the provided article:
Best Value Stocks
Value Investing: Value investing is a factor-based investment strategy that aims to identify stocks trading below their intrinsic value. It involves analyzing fundamental metrics such as the price-to-earnings (P/E) ratio. The article highlights the top five value stocks based on the lowest 12-month trailing P/E ratio:
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Southwestern Energy Co. (SWN): An oil and natural gas explorer with properties in multiple states.
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Chesapeake Energy Corp. (CHK): Engaged in the exploration and development of oil and gas properties.
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First Citizens BancShares Inc. (FCNCA): A holding company offering banking services.
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Ovintiv Inc. (OVV): Owns and operates natural gas and oil properties in the U.S. and Canada.
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DISH Network Corp. (DISH): A TV service provider with various offerings.
Fastest-Growing Stocks
Growth Model: The article introduces the concept of fastest-growing stocks, determined by a model considering both quarterly year-on-year percentage revenue growth and earnings per share (EPS) growth. The top five include:
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Mirati Therapeutics Inc. (MRTX): A biotechnology company focused on cancer treatments.
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Rivian Automotive Inc. (RIVN): An electric vehicle manufacturer.
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Apollo Global Management Inc. (APO): A private equity firm involved in buyouts and acquisitions.
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Chesapeake Energy Corp. (CHK): Engaged in the exploration and development of oil and gas properties.
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Norwegian Cruise Line Holdings Ltd. (NCLH): A cruise company offering international itinerary packages.
Stocks With the Most Momentum
Momentum Investing: Momentum investing involves buying stocks that have shown a faster price increase than the overall market. The top three stocks with the highest 12-month trailing total return are:
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First Solar Inc. (FSLR): A solar energy company with recent positive financial performance.
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NVIDIA Corp. (NVDA): A semiconductor company specializing in graphics processing units.
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Penumbra Inc. (PEN): Develops and sells minimally invasive medical devices.
Top-Stock Investing Advantages
Positive Trends: Top stocks typically exhibit positive trends in earnings, revenue, and share prices, indicating a well-run business. Investors can use stock-screening sites to identify top stocks based on fundamental and technical metrics. Liquidity is an advantage, as top stocks receive extensive media coverage and are followed by leading analysts.
Top-Stock Investing Risks
Missed Opportunities and Trend Reversals: Investing only in top large-cap stocks may lead to missed opportunities in other areas of the stock market, such as small-cap stocks that can deliver significant gains. Additionally, even top stocks can face unforeseen challenges, necessitating the use of stop-loss orders to guard against sudden trend reversals.
In conclusion, a diversified approach considering value, growth, and momentum factors can be crucial for a well-rounded investment strategy, balancing potential returns and risks.
