Dorian and Oxford Industries have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – July 28, 2023 – Zacks Equity Research shares Dorian LPG as the Bull of the Day and Oxford Industries OXM as the Bear of the Day. In addition, Zacks Equity Research provides analysis on JPMorgan Chase & Co. JPM, Walmart Inc. WMT and Johnson & Johnson JNJ.
Here is a synopsis of all five stocks:
Bull of the Day:
Dorian is a Zacks Rank #1 (Buy) and it sports a B for Value and a C for Growth. This stock is undervalued compared to its peers and also has a large dividend coming up. The company ships liquid natural gas and has moved steadily higher over the last few months. Let's explore more about this company in this Bull of The Day article.
Description
Dorian LPG Ltd., together with its subsidiaries, engages in the transportation of liquefied petroleum gas (LPG) through its LPG tankers worldwide. It owns and operates twenty-five very large gas carriers (VLGCs). The company was incorporated in 2013 and is headquartered in Stamford, Connecticut.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market's expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For Dorian, I see one beat of the Zacks Consensus Estimate and two misses over the last calendar year. That is great to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher.
Over the last 30 days, earning estimates have increased for LPG.
There are no quarterly estimates in the Zacks Research System.
The full year numbers are certainly more important... and they are moving higher.
This year has moved from $3.81 to $4.86.
Next year is now at $2.37 move up from $2.35.
Valuation
The valuation is great here trading at 5.7x forward estimates with the industry average coming in at 17x. Price to book of 1.3x is also well below the 4.6x industry average. Price to sales is at 2.9x and that again is below the 5x industry average.
I see operating margins moving from 34% to 43% so there was a huge move there and that is great to see.
This looks like a very mispriced asset that is going to benefit from sector rotation back into energy.
Bear of the Day:
Oxford Industries is a Zacks Rank #5 (Strong Sell) has seen earnings estimates slide lower recently despite the fact that it has beaten the Zacks Consensus Estimate in each of the last four quarters. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.
Description
Oxford Industries, Inc., an apparel company, designs, sources, markets, and distributes products of lifestyle and other brands worldwide. As of January 29, 2022, it operated 186 brand-specific full-price retail stores; 21 Tommy Bahama food and beverage locations; and 35 Tommy Bahama outlet stores. Oxford Industries, Inc. was founded in 1942 and is headquartered in Atlanta, Georgia.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market's expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of OXM, I see four straight beats of the Zacks Consensus Estimate. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn't make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For OXM I see annual estimates moving lower of late.
The current fiscal year consensus number moved lower from $11.79 to $11.05 over the last 60 days.
The next year has moved from $12.66 to $11.83 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a lot of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Additional content:
3 Top Blue Chip Stocks to Ride the Dow Rally
The Dow is experiencing a fantastic July, with the blue-chip index extending a winning streak not seen in decades, thanks to upbeat corporate earnings and the possibility of a pause in rate hikes soon.
It, thus, makes sense to place bets on solid blue-chip players like JPMorgan Chase & Co., Walmart Inc. and Johnson & Johnson that can make the most of a Dow rally.
Dow Seals Longest Winning Streak in 36 Years
After a volatile trading session on Jul 26, the Dow was able to clinch its longest winning streak since Jan 20, 1987, per Dow Jones Market Data. The 30-stock blue-chip index scaled upward by 82.05 points, or 0.23%, to register its 13th consecutive trading session in the green.
The Dow's latest milestone is now registered in the history books, and if the blue-chip gauge extends its winning streak for another trading session, it will notch its longest daily winning streak since June 1897, which was one year after the index was created in May 1896.
Corporate Profits Are Improving
The Dow was able to hold onto its positive momentum as the latest corporate quarterly earnings results were mostly encouraging for the blue-chip stocks.
3M Company's shares moved northward after the company reported second-quarter earnings beat. Similarly, The Coca-Cola Company's shares moved up on promising earnings results for the quarter that ended in June and a positive outlook for the rest of 2023.
The Boeing Company's shares also soared after the company's free cash flow in the second quarter improved following an uptick in commercial aircraft deliveries.
Fed Raises Rates But Could Pause Again
Meanwhile, the Federal Reserve increased its interest rates by a quarter of a percentage point as prices of indispensable commodities remain above the central bank's target of 2%.
The Fed has hiked interest rates in 11 of its last 12 meetings, and now the benchmark overnight interest rates are 5.25-5.50%, the highest level in more than 22 years.
However, Fed Chair Jerome Powell did indicate that interest rate hikes may be paused shortly, as was done in the June meeting. The Fed remains data-driven, and the central bank may choose to hold rates steady in the September meeting.
Market pundits are also betting on a rate hike pause in September. Almost 77.2% of them are expecting the Fed to pause rate hikes in the next meeting, per the CME FedWatch Tool.
Thus, chances of pausing rate hikes boosted investors' sentiment and helped the Dow scale upward as well. After all, rate hikes impact consumer outlays, increase borrowing costs and hamper economic activities.
3 Best Blue Chip Stocks for a Winning Portfolio
Banking on such hopefulness, there will be a sharp run-up in the index of 30 stocks. The companies on the index are slated to advance further in the near term as they have large market capitalization, solid balance sheets, and steady cash flow.
We have, thus, selected three such blue-chip stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
JPMorgan is one of the biggest global banks. Now, a possible rate hike pause may not bode well for the bank, but its strong liquidity position and recent strategic acquisitions should certainly help it chug along in the near term.
JPMorgan has a Zacks Rank #1. The Zacks Consensus Estimate for JPM's current-year earnings has moved up 7.9% over the past 60 days. The company's expected earnings growth rate for the current year is 25.8%. JPM's estimated earnings growth rate for the next five-year period is 5%.
Walmart is now an omnichannel player and not just a traditional brick-and-mortar retailer. The company's impressive comp sales are driving growth, while its e-commerce business is expanding.
Walmart has a Zacks Rank #2. The Zacks Consensus Estimate for WMT's current-year earnings has moved up 0.3% over the past 60 days. The company's expected earnings growth rate for next year is 10.5%. WMT's estimated earnings growth rate for the next five-year period is 5.5%.
Johnson & Johnson operates through pharmaceuticals, medical devices, and consumer products divisions. While its MedTech division is enjoying strong fundamentals, the company remains engaged in expanding the labels of some of its marketed products.
Johnson & Johnson has a Zacks Rank #2. The Zacks Consensus Estimate for JNJ's current-year earnings has moved up 0.7% over the past 60 days. The company's expected earnings growth rate for the current year is 5.7%. JNJ's estimated earnings growth rate for the next five-year period is 5.5%.
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JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
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Walmart Inc. (WMT) : Free Stock Analysis Report
Oxford Industries, Inc. (OXM) : Free Stock Analysis Report
Dorian LPG Ltd. (LPG) : Free Stock Analysis Report
