Contents. Overview 3. Amkor Technology (AMKR) 4. Acacia Communications (ACIA) 7. JBT Corporation (JBT) 11. Sunrun Inc. (RUN) 15

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2 Contents Overview 3 Amkor Technology (AMKR) 4 Acacia Communications (ACIA) 7 JBT Corporation (JBT) 11 Sunrun Inc. (RUN) 15 Charles Schwab (SCHW) 18 2

3 Overview Thank you for your interest in Zacks and the 5 Stocks Set to Double report. This report will give you an idea of the enormous resources available on Zacks.com. I invite you to visit the site and get familiar with the Zacks Rank, our stock picking framework that has an impressive track record of generating market-beating returns year after year. Each of the 5 stocks in this report was hand-picked by one of our stock strategists, who explain their rationale in the included stock write-ups. Clearly, this report was not written for the risk-adverse or conservative investor. Rather, these stocks are for the aggressive investor looking to add home-run potential to his or her portfolio. It would be prudent to devote no more than a small portion of your overall portfolio to these stocks. That said, we hardly threw darts at a board to arrive at these choices. All of the stocks have catalysts that we think could fuel strong gains over the coming year. We sifted through stocks that met Zacks Rank criteria and then chose the crème de la crème. Each of the five stocks has unique qualities that make it a candidate for this report. And they are all from different sectors, offering a level of diversification even in this small sample. Most of the stocks in this report are currently flying under the radar of most Wall Street analysts and traders, which provides a good opportunity to get in on the ground floor. The market is littered with these kinds of stocks, but only the ones with positive catalysts on the horizon burst onto the scene with monstrous gains. We made sure that we could identify specific factors that would bring these stocks out from obscurity and onto the lists of top performing stocks. We are confident that you can realize enormous gains with these 5 stocks. Leave the singles and doubles for other portfolios; we are swinging for the fences on this one! Best regards, Sheraz Mian 3

4 Amkor Technology (AMKR) You have to know how to strike when the iron is hot. The stock market doesn t care about your ego or your investment thesis. It has a mind of its own, moving very swiftly when it wants and where it wants. Sometimes it s very hard to figure out what the market is thinking. Other times, it s just painfully obvious. Right now, among this Trump rotation that s taking place there have been plenty of places to make money. One of those places is in the semiconductors. When I m looking for a stock that could potentially double over the course of the next year, I want to make sure it s in an industry that has plenty of room to the upside. Company specific, I m looking for some healthy revenue growth. After all, a stock price is nothing more than its earnings times the multiple that investors are willing to pay for a dollar of earnings. By finding stocks with great revenue and earnings growth, I can find those that investors should be most willing to pay a premium for. That brings me to Amkor Technology (AMKR). The company is a Zacks Rank #1 (Strong Buy) stock with Value, Growth and VGM style scores of A. Amkor is the world s largest independent provider of semiconductor packaging and test services. It also offers one of the industry s broadest integrated sets of packaging and test services, which are the final procedures necessary to prepare semiconductor devices for further use. Its customers outsource the packaging and testing of semiconductor chips to the company. The semiconductor industry is in the Top 17% of our Zacks Industry Rank. Traditionally this industry is more volatile than the broad market. The industry has also done very well over the last year. I want to make the clear distinction here between Amkor s business and that of other semiconductor companies. Rather than design and develop their own chips, Amkor aides in the manufacturing process of these companies. I believe that gives Amkor a more steady flow of income and a smoother EPS trajectory. They aren t tied to one particular semiconductor which may fall out of favor. That doesn t mean that the stock underperforms the semiconductor industry. To the contrary, the stock has outpaced the broader industry since August by a large margin. After tracking with the rest of the stocks in the business throughout the first half of the year a breakout on huge momentum pushed shares of 4

5 Amkor through to the stratosphere. There is a ton of momentum behind this name as it s up nearly 80% YTD. Analysts covering the stock have taken note of the revenue growth numbers on AMKR and have adjusted their EPS estimates accordingly. Over the last sixty days, there has been a large move in our Zacks Consensus Estimates for the current year and next year. The current year EPS numbers have gone from 44 cents to 53 cents, a jump of over 20%. Next year s Zacks Consensus Estimates tell an even more bullish story, going from 62 cents to 80 cents. That represents a move of nearly 30% and year-over-year EPS growth of 50%. It s no wonder the stock has responded so well over the last year. What s fueling all of this EPS growth is not creative accounting or financial engineering. Amkor has been growing revenues consistently since 2002 when revenues were about $1.4 billion. Since then, revenues have jumped up to nearly $3.5 billion, up from less than $3 billion last year. 5

6 Given the current investment landscape, I think finding off the radar companies in growth industries is a great way to find big winners in the stock market. This stock has all the revenue growth you could possibly want to go along with a great Zacks Rank which we know statistically gives us an edge over the intermediate term. That s why I m naming Amkor Tech (AMKR) my next stock to double. 6

7 Acacia Communications (ACIA) Could the hottest IPO of 2016 still offer significant upside in 2017? I believe so. And that s why I m accumulating shares of Acacia Communications (ACIA) over 40% off of its all-time highs above $125. This maker of optical interconnect products for cloud infrastructure operators and content and communication service providers -- think customers like Cisco, Facebook, Amazon, Verizon and Germany s ADVA -- delivered its second earnings report as a public company in early November and the analysts loved the outlook. The consensus for 2017 EPS shot up over 22% from $2.34 to $2.87, making it a Zacks #1 Rank Strong Buy again. For a newly public company like this, the analysts will be slow to raise expectations too high until they get to know management and the company s execution history. Since 2016 saw nearly 100% sales growth for Acacia, many doubt this can be repeated and so the consensus projection right now is for 33% revenue growth. But at forward EPS of $2.87, the stock is trading at under 25X. For 33% top line growth, that s growth at a very reasonable price. And my sense is that sales will grow faster because Acacia s optical networking products will be in high demand as the cloud buildout demands more 100G speed. The 100 Gigabit Ethernet protocol is designed to deliver data at 100 gigabits per second. Here s a chart of Acacia s rise to investing stardom since the May IPO around $30 and the subsequent 62% fall back to reality 7

8 The Acacia Opportunity The stock has pulled back quite a bit, but the growth story is still intact. Let s look at five technical facts first as they tell their own story of what the institutions think of the fundamentals: 1. Stock down over 25% since secondary of 4.5 million shares that was priced at $ when it was trading $90! That was BOLD! day lockup expiration was Nov 9 and shares have held $65-67 area, even after Nov 4 lows of $ Earnings were Nov 10 and they certainly helped support stock above that $ Shares tested 62% retracement of $27 all-time lows (since May IPO) to the $128 all-time highs over the summer. I don t get precise with Fibs and the market wasn t either, with the 62% RT in the mid-$60s and the recent low, 8

9 during the early November market swoon, at $ Shares ran to $79 in late Nov, then retested $65 in early Dec for a nice bounce The bottom line: A lot of big players probably got hurt on the summer run-up above $100 and into the secondary offering. The stock had been trading above $100 from mid-august through September when the secondary came. But my sense is that if anybody was still itching to sell before or after the lockup expiration, they already did. There is one more caveat on that front coming up. Meanwhile take a look at the sales and earnings estimates. The Analysts Before and After Earnings Several research analysts were busy upgrading the company before the secondary and they haven t changed their tune since. Bank of America restated a Buy rating and bumped their PT from $88 to $130 in a research report on September 5. 9

10 Deutsche Bank raised their price target on Acacia from $90 to $125 and gave the stock a Buy rating in a research report on September 9. They reiterated their stance on Nov 30. Needham & Company raised their price target from $100 to $125 and gave the stock a Buy rating in a research report on October 11, right before the secondary. They reiterated their stance on Nov 26. Goldman Sachs restated a Neutral rating on shares of Acacia on October 12, the day the secondary was announced. Cowen & Co. reiterated their Outperform rating on Nov 10 and raised their PT from $90 to $99. Finally, William Blair analysts raised their 2018 revenue expectations and took a more bullish view of Acacia s revenue opportunities and operating model postearnings. We are maintaining our expectations for 30% revenue growth in 2017 while moving 2018 growth to 20% from 17%. They reiterated their Outperform rating. The Caveat There is another lock-up expiration on Jan 5 where early investors will be eligible to sell as much as 24.6 million shares. While I am accumulating shares around $70, we don t know what kind of selling we ll see by the big guys and gals in early January. It could bring lower prices, or it may not as they decide to hold on for the growth story and bigger gains. Maybe even a revisit of the old highs above $125 in That s my bet. 10

11 JBT Corporation (JBT) Founded in 1884, JBT Corporation (JBT) is a global technology solutions provider to the food processing and air transportation industries. It was spun-off from FMC Technologies in The Chicago based company operates through two segments--jbt FoodTech and JBT AeroTech. The FoodTech segment produces freezer, processing and related solutions while the AeroTech segment sells critical equipment and services to domestic and international air transportation customers. About 70% of their revenues are derived from the FoodTech division and the rest from AeroTech. Their large installed base of food processing systems and airport equipment provides the company with strong market positions within both these product lines. Since its spin-off, the company has seen strong growth, both organically and through acquisitions. They are transforming into a full-line technology solutions & service provider to global food companies with their increased role in protein and liquid foods market. 11

12 Excellent Quarterly Results The company reported Q3 results on October 26. Revenues of $349.6 million were up 28% from the same quarter a year ago, while earnings of $0.69 per share were up from $0.43. Adjusted earnings of $0.68 per share were significantly ahead of the Zacks Consensus Estimate of $0.53. Revenue increased 28% year-over-year, with 17% organic growth and 11% growth from acquisitions. On an individual segment basis, FoodTech posted revenue growth of 33%, while AeroTech posted revenue growth of 18%.Both segments reported improvement in operating margins with a 50-basis point improvement overall. They have been consistently beating for the last 14 quarters. For the last four quarters, they delivered an average quarterly positive surprise of 18%. Upgraded Guidance After strong results, the management increased their full-year revenue growth forecast to ~20%, 7% organic growth and 13% growth from acquisitions. They now expect adjusted earnings of $2.30 to $2.40 per share for 2016 up from $1.88 in

13 Rising Estimates After strong results, analysts have been raising their estimates for the company. Zacks Consensus Estimates for current and the next fiscal year have gone up to $2.38 per share and $2.94 per share respectively, from $2.33 and $2.82, before the results. Rising estimates sent the stock to a Zacks Rank # 1 (Strong Buy). Macro Factors Driving Growth Global middle class is expected to double by With their rising income, consumers in emerging markets, particularly in Asia, would continue to increase their purchases of value-added nutritional food. Thanks to growing urbanization, the demand for healthy and convenient processed food continues to rise. Further, the food industry continues to consolidate and with their global footprint and strong position in China, JBT looks well positioned to benefit from these trends. Consumer focus on health and safety bodes well for the FoodTech segment, which provides solutions that enable use of fewer preservatives and extend food shelf life without compromising taste. Their waterjet portioners provide customers with portioning flexibility. Growth in global aviation markets offers attractive opportunities to their Aerotech segment as their investments in new product development are beginning to pay off. Aviation passenger and cargo traffic is expected to more than double over next 20 years. The Elevate Plan The new strategic plan sets the roadmap for strong organic growth and margin expansion for the three-year period from 2016 to It follows a four-pronged approach of 1) accelerate new product & service development 2) grow recurring revenue 3) execute impact initiatives and 4) disciplined acquisition program. Among new products, the company plans to focus on the Internet of Things initiative, which is expected to improve customer retention. Their recurring revenue as a % of total sales has been growing strongly with about 9% CAGR over the past four years. They have completed eight acquisitions since

14 The Bottom-Line Trading at 35.5 times forward earnings, shares are not cheap at all but given excellent growth potential, I believe that the momentum should continue. Further, after the recent run-up it is difficult to find a cheap stock in the industrials space and not many companies in the space have such exceptional growth record. The Zacks Industry Rank of 28 out of 265 (top 11%) also suggests continued outperformance in the short-to-medium term. 14

15 Sunrun Inc. (RUN) There have been some in the solar community who believed that a Donald Trump presidency would spell doom for the sector, but this concern has begun to fade as of late. It is now perceived that President Trump will not repeal the Federal Solar Investment Tax Credit (ITC), and that the continued job growth in the sector will detour the new president from negatively impacting the industry. These are some of the factors in the decision to add Sunrun Inc. (RUN) to the Zacks Stocks to Double list. This Zacks Ranked #1 (Strong Buy) company owns, manages and sells residential solar energy systems. The Company provides solar service offerings through channels consists of direct-to-consumer channel, solar partner channel and strategic partnership channel. It also develops and sells mounting structures through the installation and distribution operations under the SnapNrack brand. The Company operates primarily in Arizona, California, Delaware, Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New York, Oregon, Pennsylvania and South Carolina, as well as the District of Columbia. Sunrun Inc. is headquartered in San Francisco, California. Recent Earnings Report On November 11th, management posted Q3 16 results where they crushed the Zacks consensus earnings estimate, and came in just short of the consensus revenue estimate. Specifically, the company posted a % positive earnings surprise, by beating the -$0.43 estimate with a +$0.16 actual EPS. Highlights of the quarter included; Total deployments of 80 MW (megawatts) an increase of 43% on a year over year basis, Net present value created in Q3, $76 million, an increase of 53% on a year over year basis, Creation cost per watt improved by $0.38 up 10% on a year over year basis, and total revenues grew to $112 million, up +36% on a year over year basis. Lastly, estimated nominal contracted payments remaining as of September 30, 2016 totaled $3.0 billion, up to $813 million or 37% since September 30, Estimated retained value as of September 30, 2016 was $1.9 billion, up $539 million, or 39%, since September 30, Further, during their conference call, management increased guidance for Q4 and FY 2016; management now expects to deploy approximately 80 MW, up from 77 MW in Q4, and for FY 2016 the company expects to deploy approximately 285 MW up from the range of MW. 15

16 Management s Take According to Lynn Jurich, CEO, We are pleased to deliver Q3 results that beat targets on customer installations, net present value and cost improvements, and to raise guidance slightly for the full year. We have achieved these targets by consistently executing our strategy of delivering the industry s most valuable and satisfied customer base, aligning our product offerings with customer demand and taking share in attractive markets. We are proud to partner with our growing base of customers to lead a transition to clean energy that will grow for decades to come. Price and Consensus Graph As you can see from the price and earnings consensus graph below, estimates for 2016, and 2017 are well above the current stock price. Increasing Estimates Due to the strong earnings and upgraded guidance, earnings estimates for Q4 16, FY 16 and FY 17 have risen over the past 30 days; Q4 earnings improved from -$0.48 to $0.12, Q1 17 was lifted from -$0.32 to -$0.05, FY 16 jumped up from -$0.71 to $0.72, and FY 17 rose from -$1.94 to -$

17 Magnitude of Estimate Revisions As you can see in the graph below, the overall estimate increase for each period is between +201% and +84%. (Q1 = Q4 16, Q2 = Q1 17, F1 = 2016, F2 = 2017) Earnings History The table below shows the Zacks consensus earnings estimates compared with actual reports. As you cans see, RUN has a strong history of beating the earnings estimates. Bottom Line With the fears of President Trump s new policies abating, the segment has a much brighter future outlook. Finally, Sunrun remains a top pick in the sector because of management s corporate strategy, and the expansion of their strong customer base. 17

18 Charles Schwab (SCHW) With the election of Donald Trump, investors have been racing to reallocate their portfolios to the hot market sectors. And while a number of market segments have been on fire as of late, nothing has been surging more than the financials market. Why Finance? One of the biggest issues in the financial world over the last few years has been the stubbornly low interest rates. Low rates make it difficult for financial companies to obtain fat profits, and there was little prospect of a big jump in rates in the near term too, leaving outlooks for most companies subdued. However, Treasury bond yields have been soaring lately, as investors seem to think that Trump will look to push through a lot of spending or try to get wages higher, two items which are generally considered inflationary. There are also some concerns that large holders of Treasury bonds are selling off some of their positions in the wake of Trump s victory, so that could be playing a role in the T-bond sell-off as well. How to Play The surging yields are great news for companies in the financial world, as rising rates allow for a wider spread between long and short term rates for banks, while it increases the income on the float, or uninvested capital, at brokerage houses. Either way should be great news for investors in this segment, but I think brokers or regional banks may be safer bets, since Trump may look to squash some M&A deals (such as those in the media world) and that may hit the big Wall Street banks out there, though all should do better in a less stringent regulatory environment. In particular, brokers stand out as possible winners right now for investors seeking fresh plays for That is because they look to benefit in two ways from this recent asset boom. First off, higher interest rates look to benefit the level of money they earn on the float, which is a huge source of revenue for companies in this market. Additionally, higher levels of consumer confidence and a surging market are likely to pull in more investors and swell current asset bases which is even more good news for this sector. 18

19 No wonder this segment currently has a top 25% industry rank with nearly half of its members in buy territory in terms of their Zacks Ranks. But while there are many solid choices in this market, the one I am going to be keeping my eye on is Charles Schwab. Top Pick: Charles Schwab (SCHW) Schwab looks to be one of the biggest beneficiaries from the higher rate trend, as the company makes a healthy sum off of net interest revenues on its over $2.7 trillion in assets. As you can see in the chart below, these numbers were already on the rise, so a huge move in yields should only help SCHW s position that much more, especially if Schwab can continue to increase the number of accounts and assets on its platform. (photo courtesy of Charles Schwab investor presentation) After all, the 10-year Treasury bond was at roughly 1.6% at the end of Q3, and since then (from 09/30-early December) this benchmark yield has soared well past the 2% mark and near the 2.5% level. This is approaching a two year high for this rate, and this higher level will inevitably trickle down into Schwab s profits as well. But the reasons to like SCHW go beyond higher rates, as the company is projected to see EPS growth of over 33% this year, and sales growth of over 16%. It is also 19

20 hard to find analysts who are lowering their estimates, as most seem to agree that the prospects for Charles Schwab are bright in the near term. And these trends don t even take into account how much more in assets under management Schwab will have if the market continues to rise, or if more investors jump into the stock market following the summer and fall s malaise and paralysis. So, overall the bullish case for SCHW stock is pretty good if these trends continue in the New Year. Bottom Line The market has been soaring higher in the aftermath of the election with fresh heights seen in a number of important market indexes. Some sectors are doing especially well in this environment though, with financials arguably leading the way. This may prove to be a durable trend for investors in 2017, as higher interest rates appear poised to stay in the near term, while soaring consumer confidence and ultra-low unemployment levels and there by a solid domestic economic are likely to attract more people to the stock markets. This could be especially the case if the once-surging housing market finally cools off, and if investors finally start to see some losses in their bond portfolios as well. If these popular asset classes fall by the wayside in terms of investor interest, stocks are the obvious fall back choice, making companies in the broker business top picks. And if you are looking for the cream of the crop in this industry, it is hard to go wrong with Charles Schwab. This company has been seeing rising earnings estimates, has solid fundamentals, and a great brand name too. But beyond that, investors should also note that it has been building its asset base for quite some time, while its net interest margin had been on the rise even before Trump was elected. And with rates soaring to start Q4, this trend, along with rising asset prices, looks to be a real boon for SCHW investors who have undoubtedly been waiting for these conditions to materialize in the market. So even though SCHW shares have been soaring since the election, there is plenty of reason to believe that there are more gains ahead for this name, and especially if this interest rate situation continues well into