U.S. Markets closed

The Zacks Analyst Blog Highlights: MDU Resources, AquaVenture, Tenet Healthcare, US Foods and Genesis Healthcare

Zacks Equity Research

For Immediate Release

Chicago, IL – October 22, 2019 – 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: MDU Resources Group, Inc. MDU, AquaVenture Holdings Ltd. WAAS, Tenet Healthcare Corp. THC, US Foods Holding Corp. USFD and Genesis Healthcare, Inc. GEN.

Here are highlights from Monday’s Analyst Blog:

5 Safe Stocks to Counter IMF’s Dull Global Economic Outlook

The International Monetary Fund (IMF) has shown pessimism on World Economic Outlook (WEO), downgrading the global growth rate and warning policymakers to watch their step before taking any decision.

On the other end, the world’s economic giants, the United States and China are paying the price for the long-lasting trade war. China’s GDP, in particular, declined to the lowest level in last three decades, while manufacturing sectors in both the United States and China slowed down.

Investors should thus purchase safer defensive stocks to keep their portfolio guarded in such an economic upheaval.

IMF’s World Economic Outlook Shaves Growth

Per an Oct 15 report, IMF expects global growth to be 3% in 2019, lower than last year’s growth of 3.6%. It is a 0.3% cut from its April’s forecast. IMF’s chief economist, Gita Gopinath focused on higher import tariffs that are impacting manufacturing activities and international trade.

In fact, IMF warned the world’s central banks that they are “wasting scarce ammunition” as an attempt to compensate for “policy blunders” leaving global economy at its weakest since the last recession. If world economic growth slows to below the 2.5% rate, it would indicate a recession.

The forecast for 2020 was also reduced from 3.6% to 3.4%. IMF also mentioned that if the U.S.-China trade war continues, global growth will reduce another 0.8% by 2020.

The persistent trade war, by the way, has already impacted China’s economic growth. And now a downward revision for growth has also been made for the Singapore, Hong Kong and South Korea.

China’s Growth Slows Down at 6% Rate

China’s economic growth slowed down at a 6% rate in the third quarter, its lowest since 1992 as a result of deteriorating business activities. Though this quarter reported recovery in sectors like industrial output and retail, there was only a 5.4% rise in investment in fixed assets, a major economic driver. 

In spite of China’s immense efforts to support the economy, by cutting taxes, the country is struggling to overcome the impacts of the trade war with the United States and a poor domestic demand. With the “phase one” deal still remaining unsigned and fresh trouble emerging from Hong Kong, it is unsure if conditions will improve any time soon.

Weak U.S. Economic Data Triggers Tension

On the other side of the Pacific, economic data reported in the first half of October is leading to signs of a slowdown and creating panic among investors. U.S. retail sales fell 0.3% in September, as per government reports. Consumers have been the strength of the U.S. economy but this first-time drop in retail sales in seven months clearly indicates that trade war fears are restraining them from spending.

Further, September’s Institute for Supply Management’s (ISM) manufacturing index slipped to 47.8 — its lowest level since June 2009. The decline in manufacturing activities has been strongly impacted by sluggish exports and disruption in supply chain, thanks to the U.S-China trade war.

All these factors point toward a slowdown in the U.S. economy as well.

5 Stocks to Buy

Markets are turning volatile due to the aforesaid factors. So, defensive stocks that have give a stable performance in any market gyration are investors’ best hope to guard their portfolio now.

Stocks like utilities, consumer staples and healthcare are considered defensive as they have stable earnings regardless of market condition, the fact that these products or services are of basic necessity, keeps them in consistent demand irrespective of the business.

We have thus shortlisted five such defensive stocks that flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MDU Resources Group, Inc.is a publicly traded natural gas distribution company, transporting and distributing energy throughout the United States. The company’s expected earnings growth rate for the current year is 8.7%, above the industry’s projected rally of 2.2%.

The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the past 60 days. MDU Resources Group’s shares have gained 16% on a year-to-date basis.

AquaVenture Holdings Ltd.is a publicly traded company that offers clean drinking and process water. The company’s expected earnings growth rate for the next quarter is 32%, in contrast to the industry’s decline of 12%.

The Zacks Consensus Estimate for current-year earnings has improved 14.5% over the past 90 days. AquaVenture Holdings’ shares are up 2.5% on a year-to-date basis.

Tenet Healthcare Corp.is a publicly traded company that owns and operates general hospitals and related health care facilities for urban and rural communities across the United States. The company’s expected earnings growth rate for the current year is 29%, in contrast to the industry’s decline of 1.1%.

The Zacks Consensus Estimate for current-year earnings has improved 1.7% over the past 90 days. Tenet Healthcare’s shares have risen 38.9% on a year-to-date basis.

US Foods Holding Corp.is a publicly traded foodservice distributor, delivering food to independent and multi-unit restaurants, healthcare and hospitality entities, government and educational institutions across the United States.The company’s expected earnings growth rate for the current year is 12.3%, above the industry’s projected rally of 4.5%.

The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past 60 days. US Foods’ shares are up 25.3% on a year-to-date basis.

Genesis Healthcare, Inc.is a publicly traded long-term care, assisted or senior living and rehabilitation therapy provider in the United States. The company’s expected earnings growth rate for the current quarter is 68.8%, above the industry’s projected rally of 39.3%.

The Zacks Consensus Estimate for current-year earnings has improved 35.2% over the past 60 days. Genesis Healthcare’s shares have gained 28.8% on a year-to-date basis.

More Stock News: This Is Bigger than the iPhone!                  

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. 

Click here for the 6 trades >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339



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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
MDU Resources Group, Inc. (MDU) : Free Stock Analysis Report
AquaVenture Holdings Ltd. (WAAS) : Free Stock Analysis Report
US Foods Holding Corp. (USFD) : Free Stock Analysis Report
Tenet Healthcare Corporation (THC) : Free Stock Analysis Report
Genesis Healthcare, Inc. (GEN) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research