For Immediate Release
Chicago, IL – June 23, 2021 – Zacks Equity Research Shares of Cummins Inc. CMI as the Bull of the Day, Century Aluminum Company CENX as the Bear of the Day. In addition, Zacks Equity Research provides analysis on AMC Entertainment Holdings, Inc. AMC, Ashford Hospitality Trust, Inc. AHT and Bionano Genomics, Inc. BNGO.
Here is a synopsis of all five stocks:
Bull of the Day:
The electrification of the automobile is an inevitability. Ironic, given that some of the first cars ever made were electric. Somehow, whether it was technology or politics, the internal combustion engine won out initially. Now here we are, decades later and the tables have turned.
New restrictions internationally, combined with pledges from major automotive firms, have changed the future trajectory of the auto market. That doesn't mean that the old dinosaur-burning engines are all going to go by the wayside. In some settings, the ICE is the only way to get the job done.
If record profits are in the job description, then today's Bull of the Day could be the one that gets it done. Today's Bull of the Day is Zacks Rank #1 (Strong Buy) Cummins. Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. It operates through five segments: Engine, Distribution, Components, Power Systems, and New Power.
The company offers diesel and natural gas powered engines under the Cummins and other customer brands for the heavy and medium-duty truck, bus, recreational vehicle, light-duty automotive, construction, mining, marine, rail, oil and gas, defense, and agricultural markets; and offers new parts and services, as well as remanufactured parts and engines. It also provides power generation systems, high-horsepower engines, heavy and medium duty engines, application engineering services, custom-designed assemblies, retail and wholesale aftermarket parts, and in-shop and field-based repair services.
In addition to the favorable Zacks Rank, the stock currently enjoys a Zacks Value Style Score of C, Growth of B and Momentum A to help it round out with a VGM Composite Score of A. The favorable rank stems from the series of earnings estimate revisions coming from analysts.
Over the last sixty days, ten analysts have increased their earnings estimates for the current year, while nine have done so for next year. The bullish moves have increased our Zacks Consensus Estimates for the current year from $14.03 to $16.18 while next year's number is up from $16.32 to $18.49.
Those moves in estimates now forecast 34.72% earnings growth for the current year and 14.27% growth for next year. That's on current year revenue growth of 23.1% and next year's 4.93%.
Bear of the Day:
The recent commodity boom has been very well documented. By now, we have all heard the water cooler talk about how high lumber prices have gotten and how it's adding thousands of dollars to the cost of building a new house. The Fed has been chalking this up to something it's calling "Transitory inflation."
That should be a warning to folks betting too much on this trend continuing. In fact, going back to lumber prices, things are starting to unwind. Lumber has fallen over 30% from its highs. This is beginning to show up all over the commodity space.
Today's Bear of the Day is a stock with a lot of commodity exposure, Century Aluminum. Century Aluminum Company, together with its subsidiaries, produces standard-grade and value-added primary aluminum products in the United States and Iceland. The company was incorporated in 1981 and is headquartered in Chicago, Illinois.
Currently, Century Aluminum is a Zacks Rank #5 (Strong Sell) in the Metal Products – Procurement and Fabrication industry which ranks in the Bottom 47% of our Zacks Industry Rank. The reason for the negative Zacks Rank stems from recent earnings estimate revisions coming from analysts. Over the last sixty days, analysts have cut their earnings expectations for the current year and next year. The negative revisions have cut the current year Zacks Consensus Estimate from $1.53 down to $1.05 while next year's number is off from $2.12 to $1.76.
These 3 Meme Stocks Aren't as Risky as You May Think
The ongoing social-media hype, which is pushing prices of many stocks significantly higher, reminds us of the famous quote, "Alone we can do so little, together we can do so much."
Retail investors have realized that like big institutional investors, they too have the power to influence stock prices, and have grouped together on popular social-media platforms like Reddit and Twitter for collectively purchasing shares and out-of-money call options, primarily those that are in the short sellers' radar.
The goal is to pile in the shares, primarily of fundamentally-weak companies, and push the prices higher to squeeze short sellers, such as hedge funds, out of their positions. As a mass buying is leading to price increase, short sellers are being forced to buy the shares to minimize their losses, thus pushing the prices even higher.
Being described as the 'David vs Goliath' battle, this move is the result of the mounting discontent among small investors as to why only big institutions will profit from a company's failure. A significant increase in retail investing amid the pandemic has played a major role in driving such sentiment.
While the meme mania continues amid the bullish market sentiments, rational investors should be cautious with their choices as most of these stocks are fundamentally weak, and retail bets in them have barely followed any fundamental reasoning so far. They should also take caution with entry points as they might face huge losses if a quick profit booking starts or if the frenzy starts to cool down.
That's why it would be wise to avoid meme stocks that don't possess fundamental strength. However, it may not be a bad idea to take advantage of good entry opportunities in social media favorites that have robust revenue and earnings growth prospects.
Here are three such stocks that are being heavily discussed on Twitter, but have double-digit revenue and earnings growth potential. These stocks also carry a Zacks Rank #3 (Hold), at present.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
AMC Entertainment Holdings: This movie theatre stock has been one of biggest names in the meme list from the beginning of the year. After cooling down for a few months, the stock skyrocketed again, gaining a whopping 307.1% over the past month. AMC has estimated earnings growth rate of 80% and revenue growth rate of 88.9% for 2021.
Ashford Hospitality Trust: Shares of this real estate investment trust have rallied 64.2% in the past month. On Jun 8, Jim Cramer tweeted, "This Ashford Hospitality stock is another virtuous meme circle!!!" The company's current-year earnings are projected to surge 97% year over year. The estimated revenue growth rate for the year is 44.2%.
Bionano Genomics: This life-sciences instrumentation stock has appreciated 32.7% in a month's time on the meme craze. The company's earnings and revenues are expected to grow 51.3% and 83.4% year over year for the ongoing year.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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Cummins Inc. (CMI) : Free Stock Analysis Report
Ashford Hospitality Trust Inc (AHT) : Free Stock Analysis Report
Century Aluminum Company (CENX) : Free Stock Analysis Report
AMC Entertainment Holdings, Inc. (AMC) : Free Stock Analysis Report
Bionano Genomics, Inc. (BNGO) : Free Stock Analysis Report
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