Stocks to buy

Chasing the Momentum Dream: 3 Stocks Leaving the Market in the Dust

The stock market has been performing remarkably well within the last year due to several factors, including reduced inflation, which has caused the Federal Reserve to change its tone when it comes to interest rate hikes. Between March 2022 and July 2023, the Fed raised interest rates 11 times. But, they predict that interest rate cuts by the end of 2024. There has also been strong development in multiple sectors, most notably within the technology industry.

Momentum stocks are great during a bull market because they are companies that typically attract a large number of investors, sending the stock even higher.

Here are some very robust companies that offer investors strong returns, have seen impressive growth recently, and are leaving others’ stocks in the dust.

SkyWest (SKYW)

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SkyWest (NADSAQ:SKYW) is a passenger and cargo airline company that provides aircraft leasing and charter services among its fleet of over 500 airplanes.

Over this past year, Skywest has more than tripled its share price, far exceeding its peers within the airline industry. Other larger airline companies, such as American Airlines (NASDAQ:AAL) and United Airlines (NASDAQ:UAL), have seen a double-digit drop in share price within the same period.

On Feb. 1, it reported earnings for the fourth quarter of the full year 2023, in which it stated that total revenue increased by 10% compared to the year before. A net loss of $47 million was reported for Q4 2022, and in Q4 2023, it reported a net income of $18 million. Skywest’s CEO mentioned that the company is set up for a strong 2024 due to increased pilot attrition and demand for its products. Skywest also repurchased 1 million shares during the fourth quarter.

Skywest has multiple partnership deals with a number of major airlines and is still riding high following record-breaking holiday travel. The company is still trading at a relatively low valuation, making it a great buy for investors looking to gain exposure to passenger airline companies.

Toyota Motor (TM)

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Toyota Motor (NYSE:TM) is one of the largest automobile manufacturers. It produces SUVs, sedans, pickup trucks, compact cars, midsize vehicles, luxury models, and specialty cars. Toyota also provides leasing and financing services.

Recently, Toyota made some large investments. One was for a plant in Kentucky that will produce electric vehicles, for which Toyota supplied $1.3 billion. Toyota also plans to follow other auto manufacturers and make a large investment in Brazil to build multiple new vehicles within its Sorocaba factory.

Similar to Skywest, Toyota has far outpaced its peers like Stellantis (NYSE:STLA) and Tesla (NASDAQ:TSLA). in terms of share price growth. Over this past year, TM has seen its share price increase by 74%.

TM saw improved revenue growth for the fourth quarter of 2023 in which it increased by 23% year-over-year. And they also raised the outlook for Q1 2024. 

Toyota Motor has seen impressive growth recently and may even raise its dividend yield in the near term. It is a company expected to keep growing and is a great pick for investors looking to start investing in vehicle manufacturers.

Okta (OKTA)

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Okta (NASDAQ:OKTA) is an internet infrastructure company geared towards protecting identities. It provides services such as multi-factor authentication and privileged access and operates through a cloud-based system.

Following its earnings report for the fourth quarter of 2023, Okra’s share price surged by 23%. It experienced a revenue increase of 19%, and subscription revenue grew by 20% year-over-year. And it also provided an outlook for the first quarter in which it anticipates total revenue to be in the range of $603 and $605 million which would represent growth of 17% compared to the year before.

Bank of America also upgraded the stock following its positive fourth quarter earnings results and raised its price target to $135 per share.

Okta is a tech company that is on the rise an its strong earnings results are expected to continue. And with its free cash flow more than doubling compared to Q4 2022, Okta is in a great financial position. And investors should keep a close on this company in the near term to see if its expected growth is actually realized.

As of this writing, Noah Bolton held a LONG position in TM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Noah has about a year of freelance writing experience. He’s worked with Investopedia dealing with
topics such as the stock market and financial news.

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