The three most widely followed indexes managed to close the week in the green to start the first-quarter earnings season, even as trade remained choppy. The Dow Jones Industrial Average advanced 1.2%, while the S&P 500 and the Nasdaq Composite gained 0.8% and 0.3%, respectively.
The week’s gains were led by encouraging numbers from the inflation reports. Producer-side inflation was particularly significant, with headline PPI falling for March. On Thursday, the stock market got a tremendous boost from the CPI and PPI numbers released over the last two sessions and carried the week’s spoils. Rising jobless claims also hinted at the labor market finally starting to relent, and investors remained hopeful that these numbers would in turn push the Fed toward loosening its monetary policy when it meets in May.
However, the release of the Fed minutes from its last meeting painted a grim picture of its outlook on the economy. Talks of an impending recession took over, and most of the week’s business remained choppy. A slew of economic data like consumer sentiment, retail sales and industrial production released toward the end of the week also showed that the economy remains resilient, which is not exactly music to the investors’ ears. They are currently pricing in a 25 bps hike from the Fed’s May meeting while praying for a rate pause.
Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.
As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. 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:
Telesis Bio and PagerDuty Surge Following Zacks Rank Upgrade
Shares of Telesis Bio, Inc. TBIO have soared 77.9% since it was upgraded to a Zacks Rank #2 (Buy) on February 2.
Another stock, PagerDuty, Inc. PD, which was also upgraded to a Zacks Rank #2 on January 31, has returned 15.8% since then.
Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
This 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 stocks here >>>
Check Telesis Bio’s historical EPS and Sales here>>>
Check PagerDuty’s historical EPS and Sales here>>>
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Zacks Recommendation Upgrade Drives Banco do Brasil and YPF Sociedad Higher
Shares of Banco do Brasil S.A. BDORY and YPF Sociedad Anónima YPF have advanced 8.3% and 6% since their Zacks Recommendation was upgraded to Outperform on January 27 and February 2, 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 Stocks GE HealthCare, Axon Soar High
Shares of GE HealthCare Technologies Inc. GEHC, which belongs to the Zacks Focus List, have risen 23.4% over the past 12 weeks. The stock was added to the Focus List on January 4, 2023. Another Focus-List holding, Axon Enterprise, Inc. AXON, which was added to the portfolio on June 3, 2020, has returned 21% over the past 12 weeks.
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.
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 Stocks Hershey’s and AutoZone Make Significant Gains
The Hershey Company HSY, a component of our Earnings Certain Admiral Portfolio (ECAP), jumped 19.5% over the past 12 weeks. AutoZone, Inc. AZO followed Hershey’s with 13.4% returns.
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 Stocks Tractor Supply, General Mills Outperform Peers
Tractor Supply Company TSCO, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 12.2% over the past 12 weeks. Another ECDP stock, General Mills, Inc. GIS, has climbed 11.8% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid the heightened market volatility contributed to this performance.
Check Tractor Supply’s dividend history here>>>
Check General Mills’ 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 significantly mitigate risk. 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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