One would think after an eight-year bull market where a large part of the performance has been driven by momentum mega-cap technology companies, that Wall Street strategists would be leaning toward value after a spectacular growth run. What really becomes important in an aging bull market is rotating from passive to active management, as indexing often starts to lose steam when markets tire out.

In a new Jefferies research report, top flight strategist Steven DeSanctis and his team make just that case, that in essence stock picking is now critical for success going forward. They are looking at companies that they feel offer “growthier growth.” They noted this in the report:

We screened the Russell Midcap Growth and Russell 2500 Growth for names between $2 billion and $30 billion, in the top return on equity quintile, and with consensus fiscal year sales growth greater than 10%. We are excited to see a diversified list of ideas from quite a few sectors with Discretionary and Tech dominating.

We screened the list for companies that also tend to do well year round and found five outstanding picks.

Alliance Data Systems

This company has hit our insider buying screens in a big way this year, as ValueAct Holdings has purchased a substantial number of shares in Alliance Data Systems Corp. (NYSE: ADS). The company is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries.

The company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services and private label and co-brand retail credit card programs.

Alliance Data Systems operates through three segments.

• LoyaltyOne provides coalition and short-term loyalty programs through the company’s Canadian AIR MILES Reward Program and Brand Loyalty.
• Epsilon provides end-to-end, integrated marketing solutions.
• Card Services provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the company’s private label and co-brand retail credit card programs.

Shareholders receive a 0.81% dividend. The Jefferies price objective is $270, and the Wall Street consensus price target is $275.52. The stock closed Wednesday at $258.94.

Edwards Lifesciences

This company pioneered the artificial heart valve, and it could be poised for big growth. Edwards Lifesciences Corp. (NYSE: EW) provides products and technologies to treat structural heart disease and critically ill patients worldwide. The company offers transcatheter heart valve therapy products, comprising transcatheter aortic heart valves and their delivery systems for the nonsurgical replacement of heart valves.

The company also provides surgical heart valve therapy products, such as pericardial valves for aortic and mitral replacement, and minimally invasive aortic heart valve system, as well as tissue heart valves and repair products, which are used to replace or repair a patient’s diseased or defective heart valve.

Top Wall Street analysts feel that the company’s acquisition of privately held CardiAQ last year made good sense going forward. CardiAQ has human implants of transcatheter mitrial valves, and Edwards is focused on the mitrial valve opportunity after its very strong success in aortic valves. The company also has had tremendous success with transcatheter valve replacement. Transcatheter heart valve replacements are rapidly gaining favor in the medical community for use in those patients who are deemed unsuited for open heart surgery, and they are a fast growing revenue stream for the company.

Jefferies has a $115 price target, and the consensus target is $122.39 The shares closed Wednesday at $118.89.

O’Reilly Automotive

This is a great summer stock to own, as consumers will want their vehicles in top shape for vacation trips. O’Reilly Automotive Inc. (NASDAQ: ORLY) is a specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States. The company sells its products to both DIY and professional service provider customers.

Its product line includes new and remanufactured automotive hard parts, such as alternators, starters, fuel pumps, water pumps, brake system components, batteries, belts, hoses, temperature control, chassis parts, driveline parts and engine parts; maintenance items, such as oil, antifreeze, fluids, filters, wiper blades, lighting, engine additives and appearance products; and accessories, such as floor mats, seat covers and truck accessories.

The $302 Jefferies price target compares with the consensus target of $294.82. The shares closed Wednesday at $220.77.

Dave and Busters

This top chain continues to be a favorite across Wall Street as millennials and Generation X love to spend time there. Dave & Buster’s Entertainment Inc. (NASDAQ: PLAY) owns and operates entertainment and dining venues for adults and families in North America. Its venues offer a menu of “Fun American New Gourmet” entrées and appetizers, as well as a selection of non-alcoholic and alcoholic beverages and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. As of December 6, 2016, it owned and operated 88 stores in 33 states and Canada.

The analysts said the following when offering their top picks for this year:

Our favorite new unit growth story with an underappreciated, differentiated brand and business model with no real direct competitors. We expect this to work to the company’s advantage as we move later in the cycle, which along with continued focus on new, proprietary games/amusements backed by marketing, should drive growth and broad based brand awareness to support incremental SSS and margin leverage on 50%-60% flow-through. New unit growth of 10%+ has been very productive as well.

The price target at Jefferies is $80. The consensus target is $78.25, and shares closed most recently at $66.08.

Ulta Beauty

If there is any company to own in the retail sector, this may be the one. Ulta Beauty Inc. (NASDAQ: ULTA) is a holding company for the Ulta Beauty group of companies. The company offers cosmetics, fragrance, skin, hair care products and salon services. It offers approximately 20,000 products from over 500 beauty brands across all categories, including its own private label. The company also offers a full-service salon in every store, featuring hair, skin and brow services.

Ulta Beauty operates approximately 970 retail stores across 48 states and the District of Columbia and also distributes its products through its website, which includes a collection of tips, tutorials and social content. The company offers makeup products, such as foundation, face powder, concealer, color correcting, face primer, blush, bronzer, contouring, highlighter, setting spray, shampoos, conditioners, hair styling products, hair styling tools and perfumes.

Jefferies has set its price target at $350, while the consensus price objective is $324.95. The shares closed at $288.84.

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Not only do these top growth companies look poised for additional gains, they may have even more of a tailwind if the economy starts to pick up. With the Congress and the Trump administration looking to bring about big tax reform, that is just the kind of legislation that could kick-start our current slow economy.

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