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The Zacks Analyst Blog Highlights: Atlantic Capital Bancshares, CAI International, Danaos Corp, D.R. Horton and Home Bancorp
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For Immediate Release
Chicago, IL – February 25, 2021 – 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: Atlantic Capital Bancshares, Inc. , CAI International, Inc. , Danaos Corporation (DAC - Free Report) , D.R. Horton, Inc. (DHI - Free Report) and Home Bancorp, Inc. (HBCP - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Don’t Shun Equities on Rising Bond Yields: Buy 5 Value Stocks
Prospects of U.S. economic recovery in the near term have raised concerns about inflation, eventually compelling investors to sell off bonds. Then again, bond yields remain elevated as of now. In any case, yields do rise when prices decline. Notably, the 10-year Treasury Yield has breezed past the coveted 1.3% mark and is now spooking the stock market. This is because the relentless rise in Treasury yields could easily diminish the lure of riskier investments like equities, especially growth stocks.
Prominent among growth stocks are mostly tech-oriented companies which for quite some time now have been witnessing a downward trend. On Feb 23, the Nasdaq 100 that mostly comprised large-cap tech stocks dropped 0.2%. Similarly, the Russell 2000 Growth index slipped 1.2%. The index, by the way, mostly consists of small-cap growth stocks. Talking about individual tech behemoths, Tesla and Zscaler saw their shares decline more than 2% each yesterday.
But investors shouldn’t steer clear of equities completely at the moment. Let’s admit, bond yields need to rise a lot more to pose any kind of a threat to the long-run upward trajectory of stocks. Most importantly, as quoted in a Barron’s article, the real 10-year Treasury Yield, or the bond yield minus the anticipated inflation rate, is still a negative 0.8%, which undoubtedly makes investment in stocks a compelling choice. To top it, citing from a MarketWatch article, RBC’s Lori Calvasina pointed out that U.S. equities, in particular, tend to only struggle when the 10-year Treasury Yield surpasses the 2.75% mark, and we all know that’s a long way to go.
But then again which stocks to buy as of now? Growth stocks have already lost their sheen! Of course, value stocks are now the right choice. This is because they are widely expected to shine, especially during a recovery phase of an economic cycle. In fact, astute investors have already started to pour money into value shares. Notably, the Vanguard S&P 500 Value ETF rose 0.5% in the last trading session.
Nonetheless, talking about an uptick in economic activity, the U.S. Leading Economic Index came in at 110.3 in January, up 0.5% from December, per the Conference Board, as quoted in a PRNewswire article. What’s more, the U.S. economy is expected to grow “rapidly” this year, with GDP likely to come in at 3.7%, according to the Congressional Budget Office, as mentioned in a CNBC article. Such numbers are quite encouraging, especially after the drubbing the economy had to put up with last year due to the coronavirus outbreak.
5 Stocks to Make the Most of the Value Investing Trend
Thanks to rising bond yields, rotation from growth to value stocks is pretty much underway, which calls for investing in such stocks right away. Thanks to our style score system, we have been able to identify five value stocks. Our research shows that stocks with a Value Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best opportunities in the value investing space.
Atlantic Capital Bancshares is a bank holding company. The company currently has a Zacks Rank #2 and a Value Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 18.9% over the past 60 days. Atlantic Capital Bancshares has a price-to-earnings ratio (P/E) of 12.27 compared with 12.8 for the industry. The company’s expected earnings growth rate for the current year is 49.5%.
CAI International is one of the world’s leading intermodal freight container leasing and management companies. The company currently has a Zacks Rank #1 and a Value Score of A. The Zacks Consensus Estimate for its current-year earnings has risen 41.1% over the past 60 days. CAI International has a price-to-earnings ratio (P/E) of 6.42 compared with 47.8 for the industry. The company’s expected earnings growth rate for the current year is 38.5%.
Danaos Corp. is a leading international owner of containerships and chartering vessels to many of the world's largest liner companies. The company currently has a Zacks Rank #1 and a Value Score of A. The Zacks Consensus Estimate for its current-year earnings has moved30.2% north over the past 60 days. Danaos has a price-to-earnings ratio (P/E) of 2.83 versus 8.3 for the industry. The company’s expected earnings growth rate for the current year is 92.2%.You can see the complete list of today’s Zacks #1 Rank stocks here.
D.R. Horton is one of the leading national homebuilders. The company currently has a Zacks Rank #2 and a Value Score of B. The Zacks Consensus Estimate for its current-year earnings has advanced14.1% over the past 60 days. D.R. Horton has a price-to-earnings ratio (P/E) of 8.76 compared with 12.3 for the industry. The company’s expected earnings growth rate for the current year is 41%.
Home Bancorp is a holding company for Home Bank. It is a federally chartered mutual savings bank. The company currently has a Zacks Rank #1 and a Value Score of B. The Zacks Consensus Estimate for its current-year earnings has risen15.3% over the past 60 days. Home Bancorp has a price-to-earnings ratio (P/E) of 9.81 compared with 13.2 for the industry. The company’s expected earnings growth rate for the current year is 15.3%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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/performancefor information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Atlantic Capital Bancshares, CAI International, Danaos Corp, D.R. Horton and Home Bancorp
For Immediate Release
Chicago, IL – February 25, 2021 – 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: Atlantic Capital Bancshares, Inc. , CAI International, Inc. , Danaos Corporation (DAC - Free Report) , D.R. Horton, Inc. (DHI - Free Report) and Home Bancorp, Inc. (HBCP - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Don’t Shun Equities on Rising Bond Yields: Buy 5 Value Stocks
Prospects of U.S. economic recovery in the near term have raised concerns about inflation, eventually compelling investors to sell off bonds. Then again, bond yields remain elevated as of now. In any case, yields do rise when prices decline. Notably, the 10-year Treasury Yield has breezed past the coveted 1.3% mark and is now spooking the stock market. This is because the relentless rise in Treasury yields could easily diminish the lure of riskier investments like equities, especially growth stocks.
Prominent among growth stocks are mostly tech-oriented companies which for quite some time now have been witnessing a downward trend. On Feb 23, the Nasdaq 100 that mostly comprised large-cap tech stocks dropped 0.2%. Similarly, the Russell 2000 Growth index slipped 1.2%. The index, by the way, mostly consists of small-cap growth stocks. Talking about individual tech behemoths, Tesla and Zscaler saw their shares decline more than 2% each yesterday.
But investors shouldn’t steer clear of equities completely at the moment. Let’s admit, bond yields need to rise a lot more to pose any kind of a threat to the long-run upward trajectory of stocks. Most importantly, as quoted in a Barron’s article, the real 10-year Treasury Yield, or the bond yield minus the anticipated inflation rate, is still a negative 0.8%, which undoubtedly makes investment in stocks a compelling choice. To top it, citing from a MarketWatch article, RBC’s Lori Calvasina pointed out that U.S. equities, in particular, tend to only struggle when the 10-year Treasury Yield surpasses the 2.75% mark, and we all know that’s a long way to go.
But then again which stocks to buy as of now? Growth stocks have already lost their sheen! Of course, value stocks are now the right choice. This is because they are widely expected to shine, especially during a recovery phase of an economic cycle. In fact, astute investors have already started to pour money into value shares. Notably, the Vanguard S&P 500 Value ETF rose 0.5% in the last trading session.
Nonetheless, talking about an uptick in economic activity, the U.S. Leading Economic Index came in at 110.3 in January, up 0.5% from December, per the Conference Board, as quoted in a PRNewswire article. What’s more, the U.S. economy is expected to grow “rapidly” this year, with GDP likely to come in at 3.7%, according to the Congressional Budget Office, as mentioned in a CNBC article. Such numbers are quite encouraging, especially after the drubbing the economy had to put up with last year due to the coronavirus outbreak.
5 Stocks to Make the Most of the Value Investing Trend
Thanks to rising bond yields, rotation from growth to value stocks is pretty much underway, which calls for investing in such stocks right away. Thanks to our style score system, we have been able to identify five value stocks. Our research shows that stocks with a Value Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best opportunities in the value investing space.
Atlantic Capital Bancshares is a bank holding company. The company currently has a Zacks Rank #2 and a Value Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 18.9% over the past 60 days. Atlantic Capital Bancshares has a price-to-earnings ratio (P/E) of 12.27 compared with 12.8 for the industry. The company’s expected earnings growth rate for the current year is 49.5%.
CAI International is one of the world’s leading intermodal freight container leasing and management companies. The company currently has a Zacks Rank #1 and a Value Score of A. The Zacks Consensus Estimate for its current-year earnings has risen 41.1% over the past 60 days. CAI International has a price-to-earnings ratio (P/E) of 6.42 compared with 47.8 for the industry. The company’s expected earnings growth rate for the current year is 38.5%.
Danaos Corp. is a leading international owner of containerships and chartering vessels to many of the world's largest liner companies. The company currently has a Zacks Rank #1 and a Value Score of A. The Zacks Consensus Estimate for its current-year earnings has moved30.2% north over the past 60 days. Danaos has a price-to-earnings ratio (P/E) of 2.83 versus 8.3 for the industry. The company’s expected earnings growth rate for the current year is 92.2%.You can see the complete list of today’s Zacks #1 Rank stocks here.
D.R. Horton is one of the leading national homebuilders. The company currently has a Zacks Rank #2 and a Value Score of B. The Zacks Consensus Estimate for its current-year earnings has advanced14.1% over the past 60 days. D.R. Horton has a price-to-earnings ratio (P/E) of 8.76 compared with 12.3 for the industry. The company’s expected earnings growth rate for the current year is 41%.
Home Bancorp is a holding company for Home Bank. It is a federally chartered mutual savings bank. The company currently has a Zacks Rank #1 and a Value Score of B. The Zacks Consensus Estimate for its current-year earnings has risen15.3% over the past 60 days. Home Bancorp has a price-to-earnings ratio (P/E) of 9.81 compared with 13.2 for the industry. The company’s expected earnings growth rate for the current year is 15.3%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>
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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/performancefor information about the performance numbers displayed in this press release.