The year 2021 looked like it would be the year of value stocks, and it certainly started that way. But, since May, growth stocks have been the better performers. While many growth companies have seen their shares soar once again, there are still plenty trading at attractive valuations, including Kohl's Corporation (NYSE:KSS), Teradata Corporation (NYSE:TDC), and Meritor, Inc. (NYSE:MTOR).Much has been said of the rotation out of growth stocks and into value stocks this year. But since the middle of May, it has been growth stocks that have been the better performers. Since May 12th, the SPDR S&P 500 Growth ETF (SPYG) is up 17.5%, compared to a gain of 3.3% for the SPDR S&P 500 Value ETF (SPYV).
I believe growth stocks are seeing their shares rise again due to two reasons. First, after falling during the first few months of 2021, their share prices started to look attractive again. And second, the recent surge in COVID-19 cases driven by the Delta variant has brought increased attention to the growth areas of the market that performed well during the lockdowns of 2020.
While some of the big-name growth tech stocks have seen their shares rise again, plenty of other growth stocks are still trading at very attractive valuations. So, I ran a search in our POWR Ratings system for stocks that were rated a Buy or Strong Buy with a Growth Grade and Value Grade of A. Kohl's Corporation (KSS), Teradata Corporation (TDC), and Meritor, Inc. (MTOR) are three such stocks, which is why I am highlighting them below.