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Zacks Investment Ideas feature highlights: Facebook, Boeing and MKS Instruments

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For Immediate Release

Chicago, IL – August 01, 2017 – Today, Zacks Investment Ideas feature highlights Features: Facebook (NASDAQ:FB Free Report), Boeing (NYSE:BA Free Report) and MKS Instruments (NASDAQ:MKSI Free Report).

3 Big Stocks with Huge Growth Prospects

This has been a great earnings season so far, which Sheraz Mian recently wrote extensively about in his Earnings Trends article. It’s not just that companies are beating expectations, but we’ve also seen a lot of follow through in share prices. This post-earnings drift is the key to making money during earnings season.

By now, we all know that the large caps are leading the way in this aged bull market. Therefore, investors have a great chance to bulk up their profits with huge and relatively stable companies, and the “Top Ranked Growth Stocks on the Move” is a great screen to make it happen.

Many of Zacks’ best investment tools are in the parameters of this screen. Zacks Rank #1s and #2s? Check. Top 50% of the Zacks Industry Rank? Check. Zacks Growth Style Scores of As and Bs? Check. Plus, it also uses average broker ratings, positive surprises, favorable valuations and positive price momentum to round out its list.

All of the stocks highlighted below have passed the criteria of this screen, and two of them are household names. Give them a look...

Facebook (NASDAQ: Free Report)

Remember back in the day when the market wondered how Facebook would be able to monetize its services? Well, after a 45% surge in revenues year over year to more than $9.3 billion in its second quarter, such concerns feel like they were decades ago. Actually, it was just a few years back when analysts were asking such questions, which goes to show what a juggernaut FB has been. This is "Model T" territory, and, with shares up nearly 50% so far in 2017, it doesn't look to be slowing down anytime soon.

In its second quarter, FB announced its eighth straight positive surprise when earnings of $1.32 per share topped the Zacks Consensus Estimate by 16.8%. The result marked a more than 70% improvement from last year and contributed to a four-quarter average beat of 15.3%. Revenues of $9.3 billion also eclipsed our expectations of $9.17 billion. So how is it making money? FB's MAUs (monthly active users) were up 17% to 2.01 billion, while its DAUs (daily active users) jumped by the same percentage to 1.32 billion. Advertising revenues soared 47% to $9.16 billion. We are quickly reaching the point where you may be considered "weird" if you're not on Facebook.

Analysts responded quickly and positively to the second quarter report. The Zacks Consensus Estimate for this year is now $5.27, which marks a 7.6% improvement in just the past 7 days. But we know that FB is a big deal today; what investors want to know is if it will continue being at the forefront of culture and communication in the future. The market thinks it will. Earnings for next year are expected to jump 21% to $6.36 per share, which is up 5.1% in its own right over the past week.

The market is confident about FB's future because it is not a company that rests on its laurels. It has gained unbelievable traction in online and mobile advertising, while Instagram has become as much of a "name" as Facebook itself. But going forward, the company is in the process of monetizing the opportunities for brands such as Messenger, WhatsApp and Oculus. Given the company's track record over the past several years, does anybody really want to bet against it?

Facebook, Inc. Price, Consensus and EPS Surprise | Facebook, Inc. Quote

Boeing (NYSE:(BA - Free Report) Free Report)

You could say that shares of Boeing are “soaring higher” or “gaining altitude” in 2017…but that would be tacky. Instead, let’s just say that the company’s nearly 60% advance year to date is one of the more impressive stories in the market. The stock has nearly doubled its highly-ranked industry of Aerospace-Defense, which is in the top 35% of the Zacks Industry Rank with a year-to-date gain of more than 27%. As of this writing (Monday morning), BA hit yet another new record and is taking the resurgent Dow along for the ride.

There have been several highlights in what’s turning out to be a solid earnings season, but BA’s second-quarter performance was one of the big ones. The company announced its fifth straight positive surprise as earnings per share of $2.55 beat the Zacks Consensus Estimate by 9.9%. The result also marked the 19th beat out of 20 quarters and a Herculean turnaround from the year-ago loss of 44 cents. Over the past four quarters, it has amassed and average beat of 13.7%.

Surprisingly, revenues of $22.7 billion fell short of Zacks expectations, but there were plenty other factors that helped its share price to accelerate after the report. For example, backlog was up to $482.2 billion at the end of the quarter, compared to $479.5 billion and the end of the preceding quarter. But more importantly, BA raised its earnings per share guidance for 2017 to between $9.80 and $10, compared to the earlier guidance of $9.20 to $9.40. Revenues are still expected between $90.5 billion and $92.5 billion.

Analysts apparently have no problem believing that BA can hit their raised targets, so they responded by boosting their own expectations. The Zacks Consensus Estimate for this year has gained 6% in the past 7 days to $9.99 per share. Earnings are currently expected to jump another 6% next year to $10.59, which has gained 2.2% in the past week.

Looking forward, BA expects to get a lot of help from India to hit its raised marks and to go even further. Just today, the company announced that it expects airlines in Asia’s third-largest economy to order up to 2100 new aircraft over the next 20 years. That has a price tag of approximately $290 billion!

Boeing Company (The) Price, Consensus and EPS Surprise | Boeing Company (The) Quote

MKS Instruments (NASDAQ:(MKSI - Free Report) Free Report)

You probably knew that we wouldn’t get through a “Top Ranked Growth Stocks on the Move” screen without touching on a semiconductor-related name. So here comes MKS Instruments, which makes products that are used to measure, control and analyze gases in semiconductor manufacturing and similar industrial manufacturing processes. The company is part of the electronics – manufacturing machinery industry, which is in the top 4% of the Zacks Industry Rank with the 11th spot out of 256. The space is up 32.85% year to date…but MKSI is up approximately 41% in that time!

The company only matched the Zacks Consensus Estimate in its second quarter report, but that didn’t sway the analysts. Earnings estimates have jumped over the past week in part because its recent acquisition of Newport Corporation is expected to boost revenues and profitability in the quarters to come. In fact, MKSI has moved all the way to a Zacks Rank #1 (Strong Buy) from a Zacks Rank #3 (Hold) during its quarterly report just a week ago.

Usually, we like to see a company do more than just meet the Zacks Consensus Estimate, which MKSI did when reporting $1.41 per share for its second quarter. However, that more than doubled last year’s 72 cents and marked the 18th straight quarter with a meet or beat. In other words, you have to go back four years to find the last time this company missed expectations. Even with the meet, MKSI has a four-quarter average beat of 8.85%.

Revenues, though, were much better than expected at $480.8 million, compared to the Zacks Consensus Estimate of $464 million. The result was also 47.5% better last year. Successful integration of the April 2016 acquisition of Newport was a positive factor in this quarter’s results. In addition to Newport, solid demand for semiconductor and other advanced markets should bolster revenues in the upcoming quarters. MKSI expects revenues between $450 million and $490 million in its third quarter, along with earnings at $1.32 to $1.56.

The Zacks Consensus Estimate for this year is at $5.37 per share, or 7.8% better than 7 days ago. Earnings are expected to rise more than 7.5% year over year to $5.78 next year. Analysts have boosted their expectations for next year by 7% in the past 7 days as well. MKSI is also poised to deleverage its balance sheet and reduce interest expenses over time.

MKS Instruments, Inc. Price, Consensus and EPS Surprise | MKS Instruments, Inc. Quote

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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.


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