Top 3 industries ready to take off in 2015
In 2015, if you have appetite for & lsquo;big game’ stocks in a volatile market, you ought to first screen the broader sector for the prized catches.
Various studies and historical data have proved beyond doubt that average stocks that belong to top-performing industries have greater probability to outperform the so-called & lsquo;blue-chips’ in a relatively poor-performing industry. And what best way to narrow down your search than to resort to some expert advice – in this case the Zacks Industry Rank.
Zacks Industry Rank
An industry is an assortment of stocks in a similar business. The Zacks Industry Rank is obtained by first calculating the average Zacks Rank for all the stocks within that industry and then assigning an ordinal rank to it. For example, an industry with an average Zacks Rank of 1.4 is better than an industry with an average Zacks Rank of 2.2. So the industry with the better average Zacks Rank would get a better Zacks Industry Rank.
Within the Zacks Industry classification, we have divided the business world into 16 sectors comprising 60 industries (at the medium or M-level) and 260 plus industries at the expanded or X-level. We rank all 260 plus X-level industries in the 16 sectors based on the earnings outlook for the constituent companies in each industry.
Short-Listing 3 Industries with Zacks Industry Rank
Leveraging on the indigenous Zacks methodology, we have shortlisted three broader industries that consist of a few X-level industries having a strong Zacks Industry Rank. These suggest their inherent sector strengths and potential to outperform in the long term. These include the Medical Devices, Semiconductor and Staffing.
The Staffing industry is one of the vital constituents of the Business Services sector that reported year-over-year earnings growth of 9.7%, 10.0% and 11.3% in the first three quarters of 2014, which was much higher than the respective performances of the S&P 500 index at 1.5%, 8.3% and 6.9%.
Robust performance by the Staffing industry contributed significantly to the job growth of the country as the unemployment rate and the numbers of unemployed persons in 2014 were down by 1.2 percentage points and 1.7 million, respectively.
Latest employment data shows that total non-farm payroll employment rose by 321,000 in November, compared with an average monthly gain of 224,000 over the prior 12 months. The Business Services sector leads the pack for the highest job additions with 86,000 jobs added in November, compared with an average gain of 57,000 per month over the prior 12 month-period.
Latest data from the ASA Staffing Index that tracks weekly changes in temporary and contract employment shows that staffing jobs for the week ended Dec 7, 2014 increased 4.95% over the prior week – the highest value since the index’s inception in Jun 2006. The Staffing industry looks set to continue this growth momentum in 2015 as well.
Our Top Pick from The Sector
Amid such strong industry fundamentals, we provide you a top-performing stock based on solid individual Zacks Rank, year-to-date share price return and healthy earnings growth expectation.
CTPartners Executive Search Inc. Based in New York, this Zacks Rank #1 (Strong Buy) stock offers advisory and executive recruiting services to global clients across diversified industries.
With a market cap of $111.96 million, CTPartners has a healthy long-term earnings growth expectation of 12.0%. Generating a stellar year-to-date return of 169.6%, CTPartners surely leads the pack of the top-performing Staffing stocks in the year. Furthermore, it belongs to the Staffing Industry that carries a Zacks Industry Rank #14 (top 6% of Zacks Ranked industries).