The Zacks Analyst Blog Highlights GIII Apparel, SEI Investments, Meritage Homes, EMCOR and Similarweb
For Immediate Release
Chicago, IL – July 12, 2023 – 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: GIII Apparel Group GIII, SEI Investments SEIC, Meritage Homes MTH, EMCOR Group EME and Similarweb SMWB.
Here are highlights from Tuesday’s Analyst Blog:
Beyond AI: 6 Factors That Wall Street Could Gain from in 2H
The second half of 2023 is expected to offer new record highs on Wall Street, according to bullish strategist Tom Lee of Fundstrat, as quoted on Yahoo Finance. While many analysts have attributed the likely rally to advancements in artificial intelligence (AI), Lee emphasizes several other factors that could drive the stock markets higher. Let's find out what those winning factors are.
Falling Inflation and a Resilient Economy
Lee highlights falling inflation as a key factor contributing to the positive outlook for stocks. Although the core Personal Consumption Expenditures Index increased by 4.6% in May, it represents a substantial decrease from the peak inflation rate of over 9% observed just a year ago. This decline in inflation may inspire the Fed to go slow in policy tightening, which supports the bullish sentiment for stocks.
Resilient Consumer
The consumer savings pattern is an economic indicator that provides insight into the financial health of households. In May 2023, the personal savings rate in the United States amounted to 4.6%. Though the savings rate got hurt by higher inflation and slower wage growth, the current rate has improved from June 2022, when it had slipped to a 15-year low of 2.7%.
In this regard, GIII Apparel Group could emerge as a good pick. The manufacturer, designer and distributor of apparel and accessories currently has a Zacks Rank #1 (Strong Buy). The stock has a VGM (value, growth, momentum) score of A.
Solid Cash Reserves on the Sidelines
According to Lee, there is a substantial amount of sidelined cash, which amounts to a whopping $5.5 trillion. Notably, data from Pantheon Macro reveals that the top 1% of households has increased its cash balance by 52% since 2019, while the 80th to 99th percentile boosted their cash balances by 32%. As confidence builds up, investors may be interested in using their cash reserves in the markets, which will provide Wall Street an upward momentum.
In this regard, SEI Investments could emerge as a good pick. This asset management company is a leading provider of wealth management business solutions in the financial services industry. The company offers investment processing, management and operations solutions globally. The Zacks Rank #2 (Buy) stock has a VGM score of A.
A New Bull Market
Fundstrat boosted its full-year price target for the S&P 500 from 4,750 to 4,825 in its 2023 mid-year outlook. Lee believes that a new bull market is taking root. An ebbing recession is probably playing a key role in boosting the market. Market veteran Ed Yardeni boosted Q2 real GDP forecast from 1.0% to 2.0%, followed by 2.0% in Q3 and Q4, as quoted on CNBC.
Rebound in Homebuilding Sector
The housing sector has marked a solid improvement in almost all parameters. In May, the sale of existing homes grew and surpassed estimates. Moreover, U.S. home prices recorded the first annual fall in 11 years, which is likely to boost sales. New home sales have also been strong, and so have been builders' sentiments.
Yardeni indicated that large parts of the residential real-estate sector had been in a recession for the past eight quarters. But according to Yardeni, now the space is bouncing back strongly enough to keep the economy and markets afloat.
In this context, Meritage Homes is an intriguing pick. It is one of the leading designers and builders of single-family homes. The Zacks Rank #2 stock has a VGM score of A.
Massive Infrastructure Spending
Per the CNBC article, Yardeni believes that massive spending on infrastructure and efforts to bring manufacturing back to America is boosting the economy. The Inflation Reduction Act has been effected before an actual recession hits.
In this context, EMCOR Group is a compelling pick. It is one of the leading providers of mechanical and electrical construction, industrial and energy infrastructure, as well as building services for a diverse range of businesses. The company serves commercial, industrial, utility and institutional clients. The Zacks Rank #2 stock has a VGM score of B.
Tech Stocks and Other Cyclicals Lead the Way
Lee recommends focusing on tech stocks, industrials and energy sectors. Hence, Zacks Rank #1 stock Similarweb , which is a website providing web analytics services for businesses, may fare better in the second half of 2023. The stock has a VGM score of C.
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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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EMCOR Group, Inc. (EME) : Free Stock Analysis Report
Meritage Homes Corporation (MTH) : Free Stock Analysis Report
G-III Apparel Group, LTD. (GIII) : Free Stock Analysis Report
SEI Investments Company (SEIC) : Free Stock Analysis Report
Similarweb Ltd. (SMWB) : Free Stock Analysis Report
