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The Zacks Analyst Blog Highlights: Tennant, eXp World, James River, Cornerstone Building Brands and Forterra

Zacks Equity Research
·7 mins read

For Immediate Release

Chicago, IL – March 25, 2020 – 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: Tennant Co. TNC, eXp World Holdings Inc. EXPI, James River Group Holdings Ltd. JRVR, Cornerstone Building Brands Inc. CNR and Forterra Inc. FRTA.

Here are highlights from Tuesday’s Analyst Blog:

5 Must-Buy Small-Cap Stocks for Long-Term Investors

Wall Street’s nightmare continues with almost no end in sight as the coronavirus-induced crisis refuses to let up. The stock market’s free fall, which has been the case in the last four weeks, persists with the three major indexes recording new closing lows almost every day. While the market is already oversold, lack of any positive news on the treatment front is resulting in panic selling, which has put stock valuation to almost trough.

However, despite this massive market mayhem, some small-cap stocks with strong growth potential for 2020, have witnessed upward earnings per share (EPS) estimate revisions for 2020 in the last 30 days.

Major Indexes Might Bottom Out

On Mar 23, three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — fell 3%, 2.9% and 0.3%, respectively. Year to date, these indexes are down, 34.9%, 30.8% and 23.5%. The 30 stock blue-chip index closed at 18,591.93 — its lowest reading since Nov 9, 2016, the day of Donald Trump was elected as the President.

Moreover, the Dow, the S&P 500 and the Nasdaq Composite — plunged 36.8%, 34.1% and 30.3%, respectively, from their all-times highs achieved in mid-February. Moreover, the Dow and the S&P 500 are presently well below their 2018-end levels while the tech-laden Nasdaq is ahead of that level by meager 8.3%. Notably, in 2018, these indexes recorded their worst ever yearly performance since 2008. This indicates that the market is no longer overvalued despite the likely volatility in the next few weeks.

Domestic-Focused Nature of Small Businesses

Owing to their predominantly domestic-focused business strategy, small business organizations are generally immune to any external shocks. In fact, the U.S. economy was stable with a robust labor market, strong corporate and personal income and solid consumer confidence at the beginning of the coronavirus-induced turmoil.

Further, with the recovery of global economic growth still uncertain, market participants are increasingly seeking safe-haven assets like U.S. dollar-denominated assets. Consequently, price of the U.S. Dollar index (DXY) skyrocketed to 102.49 — its highest since 2002. This renders U.S. exports uncompetitive internationally. However, as small business organizations primarily depend on domestic market, adverse movement of foreign-exchange rate does not hurt them.

Upward Revision of EPS Estimates

An upward EPS estimate revision for 2020 of any stock simply means the market is expecting these companies to do good business this year. However, in the past 30 days the coronavirus pandemic has become a serious threat to the global economy including the United States. This resulted in most stocks witnessing either negative EPS revisions or remains the same.

However,  a positive EPS estimate revision during the period of historic financial turmoil indicates the solid business model and robust growth potential of these companies. Certainly, investors can take a look at this stocks at the moment.

Our Top Picks

We have narrowed down our search to five small-cap (market capital < 1 billion) stocks with Growth Score A. Each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Tennant Co. designs, manufactures and markets floor cleaning equipment in the Americas, Europe, the Middle East, Africa and the Asia Pacific. It also provides business solutions, such as financing, rental, and leasing programs and machine-to-machine asset management solutions. The company has an expected earnings growth rate of 40.7% for the current year. The Zacks Consensus Estimate for the current year has improved by 13.7% over the past 30 days.

eXp World Holdings Inc. provides cloud-based real estate brokerage services for residential real estate market in the United States and Canada. It facilitates buyers to search real-time property listings and sellers to list their properties through its website, exprealty.com, and provides buyers and sellers access to a network of professional, agents and brokers. The company has an expected earnings growth rate of 106.7% for the current year. The Zacks Consensus Estimate for the current year has improved by 112.5% over the past 30 days.

James River Group Holdings Ltd. is an insurance company which owns and operates specialty insurance and reinsurance provider in the United States. It operates through Excess and Surplus Lines, Specialty Admitted Insurance and Casualty Reinsurance segments. The company has an expected earnings growth rate of 46.4% for the current year. The Zacks Consensus Estimate for the current year has improved by 1% over the past 30 days.

Cornerstone Building Brands Inc. designs, engineers, manufactures and markets external building products for the commercial, residential and repair and remodel construction markets in North America. It operates through three segments: Commercial, Siding and Windows. The company has an expected earnings growth rate of 46.2% for the current year. The Zacks Consensus Estimate for the current year has improved by 3.6% over the past 30 days.

Forterra Inc. manufactures and sells pipe and precast products the United States, Canada and Mexico. It operates through Drainage Pipe & Products and Water Pipe & Products segments. The company has an expected earnings growth rate of 866.7% for the current year. The Zacks Consensus Estimate for the current year has improved by 19% over the past 30 days.

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Zacks Investment Research

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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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Tennant Company (TNC) : Free Stock Analysis Report
 
James River Group Holdings, Ltd. (JRVR) : Free Stock Analysis Report
 
FORTERRA INC (FRTA) : Free Stock Analysis Report
 
Exp World Holdings, Inc. (EXPI) : Free Stock Analysis Report
 
NCI Building Systems, Inc. (CNR) : Free Stock Analysis Report
 
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