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Covenant Logistics, Nike, Amazon, Sun Life and Microsoft highlighted as Zacks Bull and Bear of the Day

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·9 min read
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For Immediate Release

Chicago, IL – September 29, 2021 – Zacks Equity Research Shares of Covenant Logistics Group, Inc. CVLG as the Bull of the Day, NIKE, Inc. NKE as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Amazon.com, Inc. AMZN, Sun Life Financial Inc. SLF and Microsoft Corporation MSFT.

Here is a synopsis of all five stocks:

Bull of the Day:

It does not take a rocket scientist to figure out that the shipping and trucking businesses are running on all cylinders. The shift away from services and towards goods as a result of the ongoing COVID pandemic, put huge demands on the supply chain. It’s leading to record profits for industries like the Transportation- Truck industry which ranks in the Top 12% of our Zacks Industry Rank. Finding top stocks within this industry can lead to stocks which have a good chance of outperforming the broad market.

One such stock is today’s Bull of the Day, Covenant Logistics. Covenant Logistics Group, Inc., together with its subsidiaries, provides transportation and logistics services in the United States. It operates through four segments: Expedited, Dedicated, Managed Freight, and Warehousing. As of December 31, 2020, it operated 2,461 tractors and 5,647 trailers.

Covenant is a Zacks Rank #1 (Strong Buy) with a Value Style Score of A, Growth of A and Momentum of C to help it round out with a VGM Composite Score of A. The reason for the favorable Zacks Rank is the series of earnings estimate revisions coming from analysts all over Wall Street. Over the last sixty days, two analysts have increased their estimates for the current year while three have done so for next year. The impact to our Zacks Consensus Estimate is very bullish. It has pushed up the Zacks Consensus Estimate for the current year from $2.62 ninety days ago to $3.43 while next year’s number is up from $2.92 to $3.50.

Those numbers represent huge year-over-year earnings growth of 217.59% for the current year and 2.04% for next year. That is on revenue growth of 18.23% for the current year and 4.76% for next year.

Bear of the Day:

Everyone has their favorite stocks and their favorite brands. The old Peter Lynch philosophy of “Buy what you know” had led thousands of investors into everyday names. Do you own a Ford? Shop Amazon? Eat at McDonald’s?

There are a whole lot of you, myself included, that have that famous “Swoosh” on your feet. But does that mean that now is the time to invest in Nike stock? If you go by the guidance of the Zacks Rank, you may want to hold off.

Today’s Bear of the Day is Nike. NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories worldwide. The company offers NIKE brand products in six categories, including running, NIKE basketball, the Jordan brand, football, training, and sportswear. In addition, the company sells a line of performance equipment and accessories comprising bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment, and other equipment for sports activities; and various plastic products to other manufacturers. Further, it provides athletic and casual footwear, apparel, and accessories under the Jumpman trademark; and casual sneakers, apparel, and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks

Nike is not currently in the good graces of our Zacks Rank. The reason is, several analysts have recently cut their earnings estimates for the current year and next year. Over the last week alone, nine analysts have cut their earnings estimates for the current year while seven have done so for next year. The bearish sentiment has cut our Zacks Consensus Estimate for the current year down from $4.30 to $3.68 while next year’s number is off from $5.01 to $4.75.

The good news for long-term investors here is that next year the company is still forecast to grow earnings at 28.95%. That’s on forecast revenue growth of 12.79%. For longer-term investors, those are still a couple of monster growth numbers. The risk over the short-term is that these negative revisions make an undesired downside impact on the stock.

Additional content:

Amazon (AMZN) Boosts Cloud Portfolio Capabilities

Amazon’s cloud computing arm Amazon Web Services (“AWS”) has unveiled three capabilities for Amazon Connect in a bid to strengthen its contact center technology offerings.

Three capabilities namely, Amazon Connect Wisdom, Amazon Connect Voice ID and automated outbound communications, are well-equipped to aid the contact centers in delivering better customer service.

Notably, Amazon Connect Wisdom identifies customer issues during calls, automatically using Machine Learning (ML)-backed speech analytics. It then suggests content in real-time to help agents solve the issues quickly. The content is arranged by Amazon Connect Wisdom from the homegrown databases and third-party knowledge repositories.

Then again, Amazon Connect Voice ID leverages ML-backed voice analysis to offer real-time caller authentication, without disrupting natural conversation.

Meanwhile, automated outbound communications help organizations to connect to several customers seamlessly on a daily basis, as it offers embedded high-volume outbound communications across multiple channels.

We note that Amazon Connect Wisdom and Amazon Connect Voice ID are generally available, whereas high-volume outbound communications capability is in preview.

We believe that the new capabilities are likely to accelerate the adoption rate of Amazon Connect. Notably, Amazon Connect is currently being used by tens of thousands of customers who support more than 10 million contact center interactions on a daily basis.

Expanding Portfolio

The latest move bodes well for the growing efforts of AWS toward expanding its product and services portfolio.

Apart from the recent Amazon Connect capabilities, the company made its new capability in QuickSight called Amazon QuickSight Q generally available. Amazon made its new storage service called Amazon FSx for NetApp ONTAP generally available as well.

The company made its fully managed data visualization service called Amazon Managed Grafana generally available. The service allows customers to track operational and IoT data from various sources by creating Grafana dashboards seamlessly.

The company made its fully managed in-memory database — Amazon MemoryDB for Redis — generally available. Amazon MemoryDB is Redis-compatible, which helps in the storage of the entire datasets in memory.

The company announced the general availability of Amazon EBS io2 Block Express volumes, which bolstered AWS’s storage area network capabilities. EBS io2 Block Express volumes are equipped with SAN features like multi-attach and elastic volumes.

The company announced the general availability of Amazon Healthlake, which extracts and analyzes important health-related information, and securely stores them on the cloud.

We believe that the expanding AWS portfolio will continue to aid Amazon’s dominance in the booming cloud market.

Expanding Customer Base

We believe that the expanding AWS portfolio will continue to aid AWS in winning customers.

Recently, AWS got selected by Arctic Wolf Networks as the primary cloud provider. Notably, Arctic Wolf will leverage AWS’s containers, serverless, analytics, database, compute, and storage to bolster its cloud-native security operations platform.

Sun Life picked AWS as its long-term cloud technology provider. Sun Life will leverage analytics, ML, storage, security, and databases to deliver an enhanced digital experience to customers.

AWS collaborated with Wyndham Hotels & Resorts. AWS’ cloud technologies will be used by Wyndham for developing digital services and providing better experiences to customers across 21 hotel brands. Notably, Wyndham has selected AWS as its preferred cloud provider.

We believe that the expanding customer base will continue to drive AWS’s top line. In second-quarter 2021, AWS generated revenues of $14.8 billion (13% of Amazon’s net sales), which rose 37% year over year.

Strengthening clientele will continue to aid its competitive edge against peers like Microsoft, Alibaba, IBM and Google, who are also leaving no stone unturned to strengthen their cloud market position.

Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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