X, CTRA, and EQT are top for value, growth, and momentum, respectively.

The Russell 1000 Index is a market-capitalization-weighted index of the 1,000 largest publicly traded companies in the U.S. It represents approximately 92% of the total market capitalization (market cap) of all listed stocks in the U.S. equity market. For this reason, it is considered a bellwether for large-cap investing. Some of the largest companies in the index include Apple Inc. (AAPL), Johnson & Johnson (JNJ), and The Walt Disney Co (DIS).

The broader economic climate for large companies remains uncertain. The impact of Russia's ongoing invasion of Ukraine, the COVID-19 pandemic, inflation, and recession concerns all threaten businesses across a broad range of industries. The U.S. added 315,000 jobs in the month of August, showing growth well above the trend before pandemic, but down sharply from the previous month. The Federal Reserve on Oct. 21 raised short term rates another three-quarters of a point, which will further rein in the economy. In addition, some Fed officials are calling for more interest rate hikes to combat inflation.

The Russell 1000 provided a total return of -15.2% over the past 12 months. This market performance number and all data below are as of Sept. 22, 2022.

Here are the top five stocks across all sectors with the best value, the fastest growth, and the most momentum.

Best Value Stocks

Value investing is a factor-based investing strategy that involves picking stocks that you believe are trading for less than what they are intrinsically worth, usually by measuring the ratio of the stock’s price to one or more fundamental business metrics. A widely accepted value metric is the price-to-earnings (P/E) ratio. Value investors believe that if a business is cheap compared to its intrinsic value (as measured by its P/E ratio, in this case), then the stock price may rise faster than that of 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
United States Steel Corp. (X) 19.68 4.7 1.1
Azenta Inc. (AZTA) 45.92 3.4 1.6
Brighthouse Financial Inc. (BHF) 46.91 3.4 1.8
Cleveland-Cliffs Inc. (CLF) 14.10 7.3 2.1
Annaly Capital Management Inc. (NLY) 5.87 10.1 2.3

Source: YCharts

  • United States Steel Corp.: United States Steel makes high value-added steel products, including its XG3 advanced high-strength steel, which is used by automakers to produce lighter-weight vehicles. It serves the automotive, construction, appliance, energy, containers, and packaging industries and has operations in the U.S. and Central Europe. U.S. Steel has an annual raw steelmaking capability of 26.2 million net tons.
  • Azenta Inc.: Azenta is a life sciences company providing sample management and genomic services including drug development, sample and material storage, as well as clinical trial management. Its customers are pharmaceutical, biotechnology, and life sciences research companies and institutions. On Aug. 9 Azenta reported Q3 FY 2022 earnings results for the period ending June 30. Operating losses widened slightly year-over-year (YOY) as revenue from continuing operations increased 3.1%. Life sciences services revenue climbed, partly offset by declines in life sciences products revenue.
  • Brighthouse Financial Inc.: Brighthouse Financial is an insurance and investment management services company specializing in annuity and life insurance products. The company serves over two million customers and has $228 billion in total assets.
  • Cleveland-Cliffs Inc.: Cleveland-Cliffs is the largest flat-rolled steel company in North America and is involved in mining raw materials, primary steelmaking, and finishing. It employs 27,000 across 68 operating facilities. The company announced on Sept. 9 that it had reached a tentative agreement with the United Steelworkers for a new 47-month labor contract covering its Mining and Pelletizing operations. The contract is effective Oct. 1 and covers roughly 2,000 employees in Minnesota and Michigan.
  • Annaly Capital Management Inc.: Annaly Capital Management is a diversified capital management company that operates as a real estate investment trust (REIT). It has investments across the mortgage finance industry. Its investment portfolio includes agency mortgage-backed securities (MBS), residential real estate, and mortgage servicing rights. It has about $82 billion in total assets. On Sept. 8, the company announced a Q3 common stock dividend of $0.88, payable Oct. 31 to shareholders as of Sept. 30, 2022, which will maintain the same level of dividend payouts to shareholders as before its stocks split. The company announced the same day that its board of directors approved a 1-for-4 reverse stock split.

Fastest Growing Stocks

These are the top stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly 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 2,500% were excluded as outliers.

Fastest Growing Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Coterra Energy Inc. (CTRA) 28.04 22.3 1,800 693.8
American Airlines Group Inc. (AAL) 12.71 8.3 2,170 79.5
Equitable Holdings Inc. (EQH) 28.29 10.6 1,840 75.2
Marriott Vacations Worldwide Corp. (VAC) 126.50 5.0 1,880 18.9
Hexcel Corp. (HXL) 55.44 4.7 1,670 22.7

Source: YCharts

  • Coterra Energy Inc.: Coterra Energy is an independent oil and gas exploration and production company with operations focused in the Permian Basin, Marcellus Shale, and Anadarko Basin. Its core position includes 234,000 net acres.
  • American Airlines Group Inc.: American Airlines Group is a major international air carrier offering an average of nearly 6,700 flights per day across more than 50 countries. American Airlines reported Q2 2022 earnings on July 21. Net income skyrocketed as revenue nearly doubled YOY, driven by rising passenger revenue as pandemic restrictions eased.
  • Equitable Holdings Inc.: Equitable Holdings is a financial services company focused on annuity products such as life insurance policies and various retirement funds. Another segment of the company provides broad investment strategies and research solutions. As of Dec. 31, 2021, Equitable employed about 12,000 and had roughly $908 billion in assets under management. Equitable reported Q2 2022 earnings on Aug. 3. Net income attributable to the company surged roughly 14-fold on strong revenue growth YOY. Net derivative gains of $2.2 billion were a key driver of results.
  • Marriott Vacations Worldwide Corp.: Marriott Vacations Worldwide is a global vacation company providing vacation ownership, rental, resort, and related products and services. It also operates exchange networks and membership programs around the world. It employs roughly 18,500. On Sept. 9, Marriott announced a quarterly dividend of $0.62 per common share. The dividend is payable on Oct. 6 to shareholders as of Sept. 22, 2022.
  • Hexcel Corp.: Hexcel is an industrial materials company that manufactures advanced composite materials. Its products are used in aerospace, industrial, and space and defense applications. The company employs 4,800 and has 23 manufacturing plants.

Stocks With the Most Momentum

Momentum investing is a factor-based investing strategy that involves investing in 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 will not suddenly disappear. In addition, other investors seeking to benefit from the stock’s outperformance will often purchase the stock, further bidding its price higher and pushing the stock higher still. 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 (%)
EQT Corp. (EQT) 44.63 16.5 139.0
Occidental Petroleum Corp. (OXY) 61.88 57.6 132.8
Devon Energy Corp. (DVN) 63.12 41.3 123.7
Marathon Oil Corp. (MRO) 24.59 16.7 107.3
CF Industries Holdings Inc. (CF) 101.53 20.2 104.7
Russell 1000 N/A N/A -15.2

Source: YCharts

  • EQT Corp.: EQT Corp. is a natural gas production company with operations in Pennsylvania, West Virginia, and Ohio. It is a major U.S. producer of natural gas. On Sept. 6, EQT announced it had entered an agreement with THQ Appalachia I LLC, known as Tug Hill, and THQ-XcL Holdings I LLC, known as XcL Midstream. Per the agreement, EQT will acquire Tug Hill's upstream access and XcL Midstream's gathering and processing assets. The total consideration of the deal is $5.2 billion. The transaction is expected to close in Q4 2022.
  • Occidental Petroleum Corp.: Occidental Petroleum is primarily an energy exploration and production company with operations in oil, natural gas liquids, and gas. Its midstream business stores and transports oil, gas and other products. The company also makes and markets chemicals. Occidental currently stores up to 20 million tons of CO2 (carbon dioxide) per year in an effort to mitigate the negative environmental effects of the buildup of CO2 in the atmosphere.
  • Devon Energy Corp.: Devon Energy is engaged in the exploration, development, and production of oil, natural gas, and natural gas liquids (NGLs). In early 2021, Devon Energy and WPX Energy completed an all-stock merger of equals. Its operations are focused on the U.S. where it employed 1,600 people as of Dec. 31, 2021. Devon announced on Sept. 5 that it had entered into a liquefied natural gas export partnership with Delfin Midstream Inc. Under the agreement, Devon would invest an unspecified amount of money in the partnership, which could result in up to two million tons per year of liquefaction capacity in one or more Delfin LNG vessels. .
  • Marathon Oil Corp.: Marathon Oil is an independent exploration and production company. Its primary operations are in the U.S. and Equatorial Guinea. Its U.S. operations are focused on four basins: Eagle Ford in Texas, the Bakken in North Dakota, the STACK and SCOOP in Oklahoma, and the Permian in New Mexico. Marathon maintains a roughly 50/50 oil/natural gas and natural gas liquids production mix.
  • CF Industries Holdings Inc.: CF Industries Holdings is a major manufacturer of nitrogen and phosphate fertilizer products worldwide. It sells nitrogen-related products including ammonia, urea, urea ammonium nitrate solution, and ammonium nitrate. The company operates nine manufacturing facilities in the U.S., U.K. and Canada. CF Industries announced financial results on Aug. 1 for Q2 2022. Net earnings attributable to common stockholders grew nearly five-fold YOY as revenue more than doubled. The company said sales were strong across all segments, offset by weather-related challenges during the fertilizer and planting season in North America.

Stock Investing Advantages

Momentum: To become a top stock, a company most likely sees 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 a profit and create shareholder value. Investors can use free stock screening sites like Finviz to find top stocks, filtering by both fundamental and technical momentum. For example, a trader could find a top stock by scanning for companies that are trading at a new 52-week high or have grown their 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 in the order book, 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.

Stock Investing Risks

Missed Opportunities: Investing only in top 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 sharply higher. Even if investors favor trading top stocks, allocating a portion of capital to other stock groups helps avoid missing exciting opportunities.

Trend Reversals: The trend is your friend—until it's not. Even top stocks with a track record of earnings growth and creating shareholder value encounter unforeseen challenges. For example, cruise line companies, such as Carnival Corporation & plc (CCL) and Norwegian Cruise Line Holdings Ltd. (NCLH), reported increased revenue in the years leading up to the COVID-19 pandemic but saw their top line sink to unprecedented levels for several years due to no-sail orders and a collapse in passenger demand. 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 herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

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