Perion Network and Peabody Energy have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – June 21, 2023 – Zacks Equity Research shares Perion Network PERI as the Bull of the Day and Peabody Energy BTU as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Salesforce CRM, PGT Innovations PGTI and Alamo Group ALG.
Here is a synopsis of all five stocks.
Bull of the Day:
There are plenty of reasons to find a four-letter ticker to invest in nowadays. The move higher in the NASDAQ Composite has helped underpin a broad stock market rally, bouncing back from the bear market last year. One such stock is today’s Bull of the Day, which is in the Internet – Content industry which ranks in the Top 18% of our Zacks Industry Rank.
Today’s Bull of the Day is Zacks Rank #1 (Strong Buy) Perion Network. Perion Network Ltd. provides digital advertising solutions to brands, agencies, and publishers in North America, Europe, and internationally. It provides Wildfire, a content monetization platform; search monetization solutions, including website monetization, search mediation, and app monetization; and cross-channel digital advertising software as a service platform.
A deep dive into Perion's financials reveals promising trends across its revenue streams. Display Advertising revenues, which account for 59% of total revenues, leapt 23.6% year over year, reaching $123.8 million. Connected Television revenues, a subset of the Display Advertising revenues, saw an impressive 42% boost. Simultaneously, Search Advertising and other revenues showed an even more significant surge of 48.6% year over year, standing at $85.9 million. These figures show that Perion's diverse revenue channels are driving its consistent growth.
The company's Traffic Acquisition Costs (TAC) may have increased by 30.8% to $122 million, but notably, as a percentage of revenues, TAC actually decreased from the previous year, indicating improved efficiency. Perion's operating profit stood at a remarkable $41.2 million, more than doubling from the $20.8 million in the year-ago quarter.
The reason for the favorable Zacks Rank is the recent upside earnings estimate revisions coming from analysts. Over the last 60 days, three analysts have increased estimates for the current year while two have done so for next year. The bullish moves have pushed up our Zacks Consensus Estimates for the current year from $2.69 to $2.84 while next year’s number is up from $2.92 to $3.08.
Bear of the Day:
Energy stocks had their day in the sun. Well, it was more like a year in the sun. The energy sector was, by far, the best performing sector in the market. We are talking about returns over 65% for the year. Astronomical measures when it comes to sector performance.
This year hasn’t been the same. That’s why today’s Bear of the Day is Zacks Rank #5 (Strong Sell) Peabody Energy. Peabody Energy Corporation is the largest private-sector coal company in the world. Its primary business lies in the mining, sale, and distribution of coal, which is used in electricity generation and steelmaking. Peabody's coal products fuel approximately 10% of all U.S. electricity generation and 2% of worldwide electricity.
Peabody owes its Zacks Rank to the fact that analysts have recently come out and dropped their earnings estimates for both the current year and next year. The bearish moves have cut our Zacks Consensus Estimate for the current year from $6.83 to $5.63 while next year’s number is off from $3.79 to $2.98. That means that the company is forecast to see earnings contract by 36.67% this year and 47.16% next year.
The Coal industry is scraping barrel bottom in the Bottom 2% of our Zacks Industry Rank. There are no stocks within this industry that are in the good graces of our Zacks Rank.
Additional content:
3 Top-Ranked Stocks on the Verge of a Breakout
For those seeking to capitalize on the relentless upward trend of this market, momentum trading presents an excellent opportunity. By simply focusing on stocks that are on the rise, there is a high likelihood that they will continue their ascent. Momentum trading is not just a catchy phrase; it is a well-researched and widely implemented trading concept that even the largest funds in the world utilize to their advantage.
To further enhance the outcomes of your momentum trading strategy, it is beneficial to prioritize stocks with high Zacks Ranks. Concentrating on stocks with a Zacks Rank #1 (Strong Buy) significantly increases your chances of selecting a winner. This is due to analysts upgrading their earnings expectations, which often prompts large funds to invest in these stocks based on the information provided.
To enhance trading odds even further, investors can also consider buying stocks that exhibit high probability chart patterns. By utilizing technical chart patterns, traders can establish precise entry and exit signals. This disciplined approach helps traders avoid questionable trades and positions them in trades with favorable risk-reward ratios, maximizing their potential returns.
Salesforce, PGT Innovations and Alamo Group all demonstrate multiple bullish catalysts. Strong momentum, analyst upgrades, and technical chart patterns greatly increase the chances that these are winning stocks.
Salesforce
Salesforce is the leading provider of on-demand Customer Relationship Management (CRM) software, which enables organizations to better manage critical operations, such as sales force automation, customer service and support, marketing automation, document management, analytics, and custom application development.
Salesforce is currently the largest CRM vendor in the world with a market share of nearly 20%.
CRM has experienced significant analyst upgrades since its massive business overhaul this past year. The stock has a Zacks Rank #1 (Strong Buy), reflecting its strong earnings revisions trend. Current quarter earnings expectations have been revised higher by 12.4% and are expected to grow 60% YoY.
Sales are expected to grow 10.4% over the same period. The tremendous growth in the bottom line can be attributed to the profit prioritization the company has enacted over the last year, to the benefit of investors.
Salesforce stock has been building bullish setups and breaking out all year, and it doesn’t look like that is going to stop. If the stock price can trade above the $213 level, it should signal a breakout that sends the stock to new YTD highs. However, if the price trades below the $205 level, investors should be cautious as the setup will be invalidated.
PGT Innovations
PGT Innovations pioneered the U.S. impact-resistant window and door industry and today is the nation's leading manufacturer and supplier of residential impact-resistant windows and doors. PGTI is also one of the largest window and door manufacturers in the United States.
PGTI’s earnings estimates have been revised sharply higher over the last two months, reflected by its Zacks Rank #1 (Strong Buy). Next quarter earnings have been revised higher by 15% over the last two months, and FY23 earnings have been upgraded by 14.2% over that time.
Furthermore, PGT Innovations is trading well below its average valuation, and near its 10-year low. It is trading at a one-year forward earnings multiple of 13.9x, which is below the market average 20.6x, and well below its 10-year median of 19.3x.
PGTI is in the process of breaking out from a bull flag this Monday morning and is exploring all-time highs. Now that the stock has cleared the $28 level, the buy signal has triggered. So long as the price is above this level by the market close on Monday the trade is valid.
Alternatively, if PGTI trades below the $27 level, the trade will be invalidated. Investors who buy the stock here can place stop-losses at this level.
Alamo Group
Alamo Group is a leader in the design, manufacture, distribution, and service of high-quality equipment for infrastructure maintenance, agriculture and other applications. Their products include truck and tractor mounted mowing and other vegetation maintenance equipment, street sweepers, snow removal equipment, excavators, vacuum trucks, other industrial equipment, agricultural implements and related after-market parts and services.
Earnings estimates have experienced considerable revisions higher, earning it a Zacks Rank #1 (Strong Buy). FY23 earnings have been revised higher by 12.7% and are projected to grow 28% YoY. In the chart below investors can see the strong inflection higher expectations made in May.
Along with the earnings estimate revisions, Alamo Group has a convincing technical setup. ALG is building out a nice consolidation right below its all-time high stock price. If the stock can trade above $186.60 it should send the stock to further new highs. But, if the price reverses and trades below the bottom of the range at $169.40 it should be avoided as the setup will be invalid.
Bottom Line
Each of these stocks has a lot going for them, but when trading momentum stocks it is critical to set a trading plan and stick with it. Even the best setups fail, and managing risk is critical, so picking a stop loss and knowing exactly how much you may lose on the trade is the most important decision in trading.
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Salesforce Inc. (CRM) : Free Stock Analysis Report
Peabody Energy Corporation (BTU) : Free Stock Analysis Report
Alamo Group, Inc. (ALG) : Free Stock Analysis Report
Perion Network Ltd (PERI) : Free Stock Analysis Report
PGT, Inc. (PGTI) : Free Stock Analysis Report
