Are you thinking of going with the crowd that likes to ,,”sell in May and run away?” ,,

Don’t be so fast to embrace that saying. While there is data to support the theory that stocks don’t do well after May and October, some terrible years can change the average return during this time, to look downward. During a normal, bullish market, the next months could be as progressive as any other. And if you have the right stocks, it could be even more profitable.

So here are three of those types of stocks. Ones with great growth opportunities and are ripe for buying this month.

1. Entegris

For the first time in seven quarters, last month, Entegris’ (ENTG) earnings fell lower than analysts’ consensus estimates. Its Q1 top line was short from expectations too, though it grew by 24% y/y. The company’s Q2 predictions for earnings per share was between $0.77 and $0.82 on revenue of around $530 or $545 million is pretty much what analysts modeled, and well higher from last year’s numbers of $0.60 per share and sales at $448.4 million. But investors could not get over the earnings miss, maybe wondering if the company is being harmed by the chip shortage that is working against other companies.

It is a worry, however, that ignores the true dynamic of the low supply of semiconductors.

The shortage is connected to incredible global demand. This means Entegris is doing the same business it was doing before covid harmed supply lines. The firm is actually getting greater demand as users of its components try to offset the shortage by optimizing their yields and improving their current technologies; that is where an advanced process solutions provider like this one can change everything.

Despite last quarter’s not so great results, analysts say the company is on track to grow its revenue by almost 17% this year, with profits increasing by almost 25%.

2. Align Technology

Align Technology (ALGN) might not be a well-known name yet, but there is a good probability someone you know is using its product. It’s among the top companies making invisible braces. You may know it as Invisalign.

The coronavirus forced large problems onto the company as dentists contributed to the virus-reduction effort by only performing emergency procedures. Align Technology’s Invisalign requires a trip to a dentist to get your teeth scanned; it does not offer scanning through a “SmileShop” or through an at-home dental kit as competitors do.

Customers do seem to like having their dentists do this kind of work, however. With the COVID pandemic pulling back and dental practices getting back toward normal work, Align’s Q1 revenue was not just higher by 62%, but hit a record-breaking $895 million. Analysts say this growth level will continue for the rest of 2021, and while sales growth should eventually decrease in pace, the market is still seeking double-digit percentage growth through 2022. Profit growth could be even better.

The stock price is down by 7% from last week’s high, but that sell-off seems to be more like profit-taking than a reason to worry.

3. The Trade Desk

Finally, lets talk about The Trade Desk (TTD) and why you should add it to your list of stocks to invest in before May ends.

The Trade Desk gives the advertising industry a cloud-based solution that optimizes ad-buying. More than just buying traditional advertising, it uses consumer data and campaign management tools to guarantee that advertisers get the most bang for their buck.

 

Not only has covid not been an issue for the company, it has even accelerated The Trade Desk’s success. Last year, its revenue increased by 26%, almost doubling per-share profits. Analysts anticipate sales growth of 35% for 2021, with a rebounding economy helping out. While these analysts are also predicting an earnings lull in 2021, understand that this company has not failed to beat earnings estimates since 2017. The current outlook seems to underestimate what could happen.

However, the stock is having relatively bad performance since it reached a high in December. While most of the 28% price pullback since then can be said to be about profit-taking, it’s not like The Trade Desk is not doing great.

 

Author: Scott Dowdy

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