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The Zacks Analyst Blog Highlights: Federated National Holding, Delta Apparel, Turtle Beach, Stoneridge and Rocky Brands

Zacks Equity Research
WSFS (WSFS) delivered earnings and revenue surprises of 0.00% and 4.56%, respectively, for the quarter ended September 2018. Do the numbers hold clues to what lies ahead for the stock?

For Immediate Release

Chicago, IL – May 18, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Federated National Holding Co. FNHC, Delta Apparel Inc. DLA, Turtle Beach Corp. HEAR, Stoneridge Inc. SRI and Rocky Brands Inc. RCKY.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Thursday’s Analyst Blog:

Russell 200 Hits All-Time High: 5 Small-Cap Stock Picks

Small-cap stocks have emerged as diamonds in the rough pushing aside the large-cap stocks in 2018. The volatility which commenced in February has taken its toll on the large-cap stocks but small-cap have slowly achieved a milestone in the meantime. Russell 2000 (RUTX), the benchmark index of U.S. small-cap stocks, scaled an all-time high on May 16.

Strong fundamentals of the U.S. economy, massive tax-cut and business friendly policies adopted by the Trump administration along with immunization from external disturbances have raised these stocks’ popularity. At this stage, investment in the top-ranked U.S. focused small-cap stocks will be a prudent move.

Russell Achieves All-Time High

On Wednesday, the Russell 2000 touched an all-time high of 1620.64 before closing at a record level of 1616.37. This represents a gain of 1% or 16.03 points in a single day.

Over the last three months, the Russell 2000 increased nearly 8%, outperforming the Dow 30, S&P 500 and Nasdaq Composite, which gained 1.5%, 3% and 6.8%, respectively.

Immune to External Disturbances

A major characteristic of small-cap stocks is that these are mostly immune to any international geopolitical disturbance or global economic fluctuations which are the primary reasons of volatility in the U.S. stock markets.

Notably, the lingering trade conflict between the United States and China led to the imposition of tariffs and retaliatory tariffs generating systematic volatility affecting mainly the large-cap stocks. To add to the woe, the United States – North Korea conflict may escalate in coming months. Moreover, geopolitical tensions in the Middle East are a persistent cause of fluctuations in large-cap stocks.

Domestic Economy Focused

One typical characteristic of small-cap stocks is that the United States is the main market for their products. The U.S. economy is currently on a strong footing. Both consumer and business confidence remains healthy.

Furthermore, the value of the U.S. dollar is rising for the last four months making U.S. exports of large companies uncompetitive in the global market. Since small-cap corporates sold most of their products to indigenous customers, these have remained unaffected by foreign exchange volatility.

Tax Overhaul: A Major Boost

The two pro-growth agendas of President Trump, namely, significant cut in corporate tax and deregulation are major catalysts to small-cap stocks. The corporate tax rate was recently lowered from 35% to 21%.

Small-cap corporates book most of their revenues in the homeland. Consequently, a significant reduction in corporate tax rate would be immediately accretive to cash flow of these companies.

Our Top Picks

The small-cap segment of the broader market has been outperforming in 2018 defying extremely volatility.  At this stage, investors with a higher risk appetite and return expectations can make the most by investing in small-cap stocks. However, picking winning stocks can be a difficult task.

This is where our VGM Score comes in handy. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select the winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM Score.

We narrowed down our search on five stocks with a market cap of below $1 billion. Each of these stock have a Zacks Rank #1 (Strong Buy) and VGM Score A. You can see the complete list of today’s Zacks #1 Rank stocks here.

Federated National Holding Co. engages in insurance distribution, underwriting and claims processing business. It has expected earnings growth of 275% for current year. The Zacks Consensus Estimate for the current year has improved by 12.5% over the last 30 days.

Delta Apparel Inc. designs, produces and markets different types of branded active wear and lifestyle basic apparel, and other accessory products. It has expected earnings growth of 12.8% for current year. The Zacks Consensus Estimate for the current year has improved by 10.3% over the last 30 days.

Turtle Beach Corp. is a premium California-based audio technology company.  It has expected earnings growth of 504.2% for current year. The Zacks Consensus Estimate for the current year has improved by 162.2% over the last 30 days.

Stoneridge Inc. manufactures and designs electronic as well as engineered electrical modules, components, and systems in the market. It has expected earnings growth of 31.9% for current year. The Zacks Consensus Estimate for the current year has improved by 5.1% over the last 30 days.

Rocky Brands Inc. designs, manufactures and sells apparel and footwear in the market. It has expected earnings growth of 29.3% for current year. The Zacks Consensus Estimate for the current year has improved by 7.1% over the last 30 days.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

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Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Turtle Beach Corporation (HEAR) : Free Stock Analysis Report
 
Stoneridge, Inc. (SRI) : Free Stock Analysis Report
 
Federated National Holding Company (FNHC) : Free Stock Analysis Report
 
Rocky Brands, Inc. (RCKY) : Free Stock Analysis Report
 
Delta Apparel, Inc. (DLA) : Free Stock Analysis Report
 
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