Take the Zacks Approach to Beat the Market: Walmart (WMT), Ulta Beauty (ULTA), UniCredit (UNCFF) in Focus
The three most widely followed indexes closed the last week in the red. The tech-heavy Nasdaq, the S&P 500 and the Dow Jones Industrial Average fell 4.2%, 3.3% and 3%, respectively, logging their third straight weekly declines.
Investors remained apprehensive as hawkish comments continued pouring in from Fed officials. There is an overarching feeling that interest rates will continue to rise as the Fed stays steadfast in bringing inflation down to its target rate of 2%. Additionally, September is historically considered one of the worst months in trading and has usually weighed down on markets.
Incoming positive economic data, especially from the job market, did almost nothing to improve investor sentiment. Fear is rife that interest rates will continue to creep up and slow the economy down to enter a recession.
Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.
Zacks Research guided investors last week with its time-tested methodologies as usual. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.
Here are some of our key achievements from last week:
Citizens Financial, Ulta Beauty Rise Following Zacks Rank Upgrade
Shares of Citizens Financial Services, Inc. CZFS have gained 4.9% since it was upgraded to a Zacks Rank #1 (Strong Buy) on September 1. The rating upgrade was primarily driven by an upward trend in earnings estimates, one of the most powerful forces impacting stock prices. A company's changing earnings picture is at the core of the Zacks rating.
For CZFS, the consensus EPS estimate of $7.28 for the current year has increased 2.5% over the past two months.
Rising earnings estimates and the consequent Zacks Rank upgrade for CZFS imply an improvement in the company's underlying business. Investors have started showing their appreciation for this improving business trend by pushing the stock higher.
Check Citizens Financial’s historical EPS and Sales here>>>
Ulta Beauty, Inc. ULTA, another stock upgraded to a Zacks Rank #1 on August 30, has returned 1.3% over the past week. A 6.4% increase in the current-year consensus EPS estimate over the past month triggered the rating upgrade.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +24.8% since 1988.You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>
Check Ulta Beauty’s historical EPS and Sales here>>>
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Zacks Recommendation Upgrade Pushes UniCredit, Euroseas Higher
Shares of UniCredit S.p.A. UNCFF and Euroseas Ltd. ESEA have gained 10.4% and 1.3% since their Zacks Recommendation was upgraded to Outperform on August 31 and August 30, respectively.
While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.
The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.
To access our research reports with Zacks Recommendations for the 1100+ stocks we cover, click here>>>
Zacks Focus List Model Portfolio Stock Dollar General Gains
Shares of Dollar General Corporation DG, which belongs to the Zacks Focus List, have shot up 2.7% over the past week. The Zacks Focus List is a model portfolio of 50 hand-picked stocks that possess the right fundamental ingredients to outperform the market over the next 12 months. These 50 stocks are picked from a long list of stocks with the highest Zacks Rank.
Dollar General was added to the Focus List on February 6, 2018, at $95.80 per share. The stock has gained 153.2% since then to close the last trading session at $242.60.
Since its inception on February 1, 1996, the Focus List portfolio has delivered an annualized return of +12.9%.
Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>
Zacks ECAP Stock Walmart Outperforms Market
Walmart Inc. WMT, a component of our Earnings Certain Admiral Portfolio (ECAP), rose 1.1% last week. ECAP is a model portfolio of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks.
With little to no turnover and annual rebalance periodicity, the ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.
In terms of last week’s returns, AmerisourceBergen Corporation ABC and Amgen Inc. AMGN followed Walmart with 1% and 0.7% gains, respectively.
The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.
Zacks ECDP Stock General Mills Crawls Up
General Mills, Inc. GIS, which is part of our Earnings Certain Dividend Portfolio (ECDP), advanced 0.5% last week. The inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to the stock’s stability. Check General Mills’ dividend history here>>>
With an extremely low Beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps significantly mitigate risk. The ECDP has consistently outperformed the S&P 500 Dividend Aristocrats ETF NOBL.
Click here to access this portfolio on Zacks Advisor Tools.
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Walmart Inc. (WMT) : Free Stock Analysis Report
Dollar General Corporation (DG) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
General Mills, Inc. (GIS) : Free Stock Analysis Report
AmerisourceBergen Corporation (ABC) : Free Stock Analysis Report
Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
Euroseas Ltd. (ESEA) : Free Stock Analysis Report
ProShares S&P 500 Dividend Aristocrats ETF (NOBL): ETF Research Reports
Citizens Financial Services Inc. (CZFS) : Free Stock Analysis Report
UniCredit (UNCFF) : Free Stock Analysis Report
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