Tecnoglass and Monster Beverage have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 1, 2022 – Zacks Equity Research shares Tecnoglass TGLS as the Bull of the Day and Monster Beverage Corporation MNST as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Pilgrim's Pride Corporation PPC, The Chef's Warehouse CHEF and Celsius Holdings CELH.
Here is a synopsis of all five stocks:
Bull of the Day:
To point out the obvious, it's been more than a challenging year in the market. We've found ourselves in a highly-unique economic environment coming out of a once-in-a-lifetime pandemic.
Still, investors need to target strong stocks amid a potential rebound, such as Tecnoglass.
Tecnoglass sports the highly-coveted Zacks Rank #1 (Strong Buy) paired with an overall VGM Score of an A. Right off the bat, this is a pairing that you love to see.
Tecnoglass is engaged in the manufacturing and selling of architectural glass, windows, and aluminum products for the residential and commercial construction industries. The company primarily operates in North, Central, and South America.
Let's take a deeper dive into the company.
Share Performance
Year-to-date, Tecnoglass shares are down roughly 16%, performing in line with the general market.
However, over the last two years, TGLS shares have quietly crushed the S&P 500's performance, rewarding investors with a massive 300% gain.
In fact, the company's 300% gain over the last two years crushes Tesla's 74% gain and Apple's 18% return as well.
Valuation
TGLS's forward earnings multiple resides nicely at a low 8.8X, reflecting a steep 65% discount relative to its Zacks Sector average and nowhere near its five-year median of 11.1X.
Further, the company rocks a Style Score of an A for Value.
Growth Estimates
Analysts have substantially upped their earnings outlook over the last several months, helping land Tecnoglass into the highly-coveted Zacks Rank #1 (Strong Buy).
The Zacks Consensus EPS Estimate of $2.57 for the company's current fiscal year (FY22) pencils in a remarkable 50% Y/Y expansion within the bottom-line. And in FY23, earnings are projected to grow an additional 13%.
Additionally, the company's top-line is in rock-solid shape as well; revenue is forecasted to soar 30% in FY22 and a further 10% in FY23.
Earnings Performance
TGLS's earnings track record is stellar – the company has exceeded both revenue and earnings estimates in eight consecutive quarters. Just in its latest print, Tecnoglass registered a 21% bottom-line beat and a 13% top-line beat.
Dividends
Who doesn't love getting paid?
Tecnoglass' annual dividend yields a respectable 1.2% paired with a payout ratio sitting sustainably at 12% of earnings.
In addition, the company's annual dividend yield beats out its Zacks Sector average – undoubtedly a major positive.
Bottom Line
One of the best ways investors can find expected winners within the market is by utilizing the Zacks Rank – one of the most potent market tools out there.
A portfolio consisting of Zacks Rank #1 (Strong Buy) stocks has beaten the market in 26 of the last 31 years with an average annual return of 24%.
Additionally, the top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
Tecnoglass would be an excellent stock for investors to keep on their watchlists, as displayed by its Zack Rank #1 (Strong Buy).
Bear of the Day:
The Zacks Consumer Staples Sector currently ranks in the bottom 38% of all Zacks Sectors, undoubtedly a ranking that doesn't inspire confidence.
Typically, an investor should target stocks within the top 50% of all Zacks Sectors.
Studies have shown that 50% of a stock's price movement can be attributed to the group it's in, making it crucial to ensure that you target stocks in a thriving sector.
With the Consumer Staples sector residing in the bottom 50% of all Zacks Sectors, it further tells us that conditions are challenging for that sector's business currently, causing the analysts following that group to lower their estimates.
And, of course, investors never want to see earnings estimates go down.
One company in the sector, Monster Beverage Corporation, currently carries a Zacks Rank #5 (Strong Sell) with an overall VGM Score of an F.
Let's take a look at what's landed the beverage titan in such an unfavorable ranking.
Growth Estimates
Analysts have been overwhelmingly bearish in their earnings outlook over the last several months, pushing the stock into a Zacks Rank #5 (Strong Sell).
The Zacks Consensus EPS Estimate for MNST's current fiscal year (FY22) resides at $2.29, penciling in a disheartening 11% Y/Y drop in earnings. And for the company's upcoming quarterly print, earnings are forecasted to slip by nearly 5% year-over-year.
Valuation
Monster Beverage shares carry stretched valuation levels, further bolstered by its Style Score of an F for Value.
The company's 38.6X forward earnings multiple is undoubtedly expensive, well above its five-year median of 33.1X and reflecting a staggering 92% premium relative to its Zacks Sector.
Earnings Performance
MNST's bottom-line results have left much to be desired as of late, with the company falling short of the Zacks Consensus EPS Estimate in four of its last six quarters. Just in its latest print, MNST penciled in a steep 25% bottom-line miss.
Bottom Line
Steep valuation levels paired with overwhelmingly negative estimate revisions from analysts paint a grim picture for the company in the short term.
Monster Beverage is a Zacks Rank #5 (Strong Sell) and a stock that investors will be better off staying away from for now.
Instead, investors should pivot to stocks that either carry a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) – the odds of reaping considerable gains are much higher within the companies that carry these ranks.
Additional content:
Here's Why Pilgrim's Pride (PPC) Is Up +20% in the Last 6 Months
Pilgrim's Pride Corporation looks well-positioned courtesy of its focus on strategic growth initiatives, including capacity expansions. The leading poultry producer benefits from sales growth in its Mexico, U.K. and Europe as well as U.S. operations.
These upsides were seen in Pilgrim's Pride's second-quarter 2022 results, with the top and bottom lines increasing year over year. Earnings in the quarter surpassed the Zacks Consensus Estimate. The company registered top-line growth across all business units, fueled by impressive service levels to Key Customers, which led to a solid sequential profit rise. Demand for Pilgrim's Pride's products in overall retail and foodservice operations remained impressive. The company continues to benefit from long-term investments like automation and focus on service for key customers.
The Zacks Rank #2 (Buy) company's shares have increased 20.7% in the past six months against the industry's 9.8% decline. The company has comfortably outperformed the Zacks Consumer Staples sector, which witnessed a 1.5% decline during the same period.
Growth Efforts Hold Promise
Pilgrim's Pride's customer-centric approach propelled it to introduce unique offerings that provide competitive advantages. The company's focus on key customers is a pathway for refining its portfolio and creating competitive advantages over its peers. Taking into account its focus on profitable growth and impressive market momentum, management recently unveiled some new investments in the United States. In this regard, management is investing in expanding the Athens, Georgia, facility to improve service levels and boost Key Customer growth.
The company will undertake operational excellence improvements via automation throughout its U.S. footprint and construct a protein conversion plant for pet food ingredients in Georgia. Pilgrim's Pride will develop a Prepared Foods facility in the Southeast USA to support branded growth and diversify its portfolio. The company incurred capital expenditures of $115 million in the second quarter of 2022, taking the total year-to-date number to $196 million. Management estimates its investments to be approximately $450 million in the next three years.
Apart from this, the company has been steadily augmenting the marketing support of its brands as they expand and enter new regions. Additionally, it resorts to frequent supply chain improvements to enhance efficiency and reduce costs. In this respect, it has been progressing well with developing automation technology for its processing plants. Introducing such advanced technology is expected to increase efficiency and aid in combating labor availability issues.
In sync with its growth strategy, Pilgrim's Pride acquired Kerry Consumer Foods' Meats and Meals business in the U.K. and Ireland in September 2021. The acquired business solidifies Pilgrim's Pride's footing by operating as a business division under the company's European operations. The company's disciplined capital allocation approach to diversify the portfolio, focus on key customers and achieve operational excellence bodes well.
All said, focus on strategic growth endeavors along with solid performance across all regions is likely to keep Pilgrim's Pride in investors' good books.
Other Solid Food Bets
Some other top-ranked stocks are The Chef's Warehouse and Celsius Holdings.
Chef's Warehouse, a distributor of specialty food products in the United States, currently flaunts a Zacks Rank #1 (Strong Buy). CHEF has a trailing four-quarter earnings surprise of 355.9%, on average. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chef Warehouse's current financial year sales suggests growth of 40.7% from the year-ago reported numbers.
Celsius Holdings, which develops, processes, markets, distributes and sells functional drinks and liquid supplements, carries a Zacks Rank #2 at present. Celsius Holdings delivered an earnings surprise of 50% in the last reported quarter.
The Zacks Consensus Estimate for CELH's current financial year sales suggests growth of 97.3% from the year-ago period's reported figures.
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Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report
Monster Beverage Corporation (MNST) : Free Stock Analysis Report
The Chefs' Warehouse, Inc. (CHEF) : Free Stock Analysis Report
Tecnoglass Inc. (TGLS) : Free Stock Analysis Report
Celsius Holdings Inc. (CELH) : Free Stock Analysis Report
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