Beat the Market Like Zacks: Avis Budget Group (CAR), Deere (DE), Novo Nordisk (NVO) in Focus
Each of the three most widely followed indexes closed last week in the red, falling for the second straight week. The tech-heavy Nasdaq, the Dow Jones Industrial Average and the S&P 500 declined 4.4%, 4.2% and 4%, respectively.
Investors were apprehensive throughout last week about Fed Chair Jerome Powell’s speech at the economic symposium at Jackson Hole. Fear was rife that Powell would re-iterate the Fed’s commitment to tackle inflation by continuing to hike interest rates in the foreseeable future. Bond yields rose early in the week, taking a toll on large-cap growth stocks, and sessions were choppy.
In fact, even an encouraging PCE inflation report did not deter the Fed from its hawkish stance. As expected, Powell said in his eight-minute speech on Friday that there would be “some pain” ahead as the Fed would continue to raise rates. The jury is out on whether the planned September hike would be 50 bps or 75 bps.
Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.
Zacks Research guided investors last week with its time-tested methodologies as usual. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.
Here are some of our key achievements from last week:
Vermilion Energy, Tencent Holdings Rise Following Zacks Rank Upgrade
Shares of Vermilion Energy Inc. VET have gained 9.4% since it was upgraded to a Zacks Rank #1 (Strong Buy) on August 23. The rating upgrade was primarily driven by an upward trend in earnings estimates, one of the most powerful forces impacting stock prices. A company's changing earnings picture is at the core of the Zacks rating.
For VET, the consensus EPS estimate of $5.55 for the current year has increased 23.1% over the past month.
Rising earnings estimates and the consequent Zacks Rank upgrade for VET imply an improvement in the company's underlying business. Investors have started showing their appreciation for this improving business trend by pushing the stock higher.
Check Vermilion Energy’s historical EPS and Sales here>>>
Tencent Holdings Limited TCEHY, another stock upgraded to a Zacks Rank #1 on August 20, has returned 4.2% over the past week. Over the past month, a 12% increase in the current-year consensus EPS estimate has driven the rating upgrade.
Check Tencent Holdings’ historical EPS and Sales here>>>
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally audited track record, with Zacks Rank #1 stocks generating an average annual return of +24.8% since 1988.You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>
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Zacks Recommendation Upgrade Drives Avis Budget Group, Reservoir Media Higher
Shares of Avis Budget Group, Inc. CAR and Reservoir Media, Inc. RSVR have gained 7.6% and 4.2% since their Zacks Recommendation was upgraded to Outperform on August 23 and August 22, respectively.
While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.
The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.
To access our research reports with Zacks Recommendations for the 1100+ stocks we cover, click here>>>
Zacks Focus List Model Portfolio Stock Deere & Company Gains
Shares of Deere & Company DE, which belongs to the Zacks Focus List, have gained 2.6% over the past week. The Zacks Focus List is a model portfolio of 50 hand-picked stocks that possess the right fundamental ingredients to outperform the market over the next 12 months. These 50 stocks are picked from a long list of stocks with the highest Zacks Rank.
Deere was added to the Focus List on July 25, 2017, at $126.55 per share. The stock has gained 199.8% since then to close the last trading session at $379.38.
Since its inception on February 1, 1996, the Focus List portfolio has delivered an annualized return of +12.9%.
Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>
Zacks ECAP Stock Novo Nordisk Unscathed in the Bloodbath
Novo Nordisk A/S NVO, a component of our Earnings Certain Admiral Portfolio (ECAP), surged 4% last week. ECAP is a model portfolio of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks.
With little to no turnover and annual rebalance periodicity, the ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.
The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.
Zacks ECDP Stock J. M. Smucker Witnesses Price Increase
The J. M. Smucker Company SJM, which is part of our Earnings Certain Dividend Portfolio (ECDP), grew 1.3% last week. The inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance. Check J. M. Smucker’s dividend history here>>>
With an extremely low Beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps mitigate risk significantly. The ECDP has consistently outperformed the S&P 500 Dividend Aristocrats ETF NOBL.
Click here to access this portfolio on Zacks Advisor Tools.
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Avis Budget Group, Inc. (CAR) : Free Stock Analysis Report
Novo Nordisk AS (NVO) : Free Stock Analysis Report
Deere & Company (DE) : Free Stock Analysis Report
The J. M. Smucker Company (SJM) : Free Stock Analysis Report
Tencent Holding Ltd. (TCEHY) : Free Stock Analysis Report
Vermilion Energy Inc. (VET) : Free Stock Analysis Report
ProShares S&P 500 Dividend Aristocrats ETF (NOBL): ETF Research Reports
Reservoir Media, Inc. (RSVR) : Free Stock Analysis Report
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