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5 Underperforming Stocks of 2017 That Could Soar Next Year
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Investors have had a great time for most of 2017, as major market indexes broke records on multiple occasions and are on course to create new annual records.
Earnings for the S&P 500 increased in each of the last three quarters, with the index likely to report more profits in the October to December time frame. The prime factor backing this extended gain is robust economic growth.
On the flip side, the market witnessed occasional losses. Geopolitical concerns, particularly those related to North Korea, hurt the market on several occasions. Also, there was much speculation about the likelihood of tax cuts receiving legislative approval before they were finally signed into law last week.
With expectations that the Trump administration will continue to back the market, aiding it to reach many more milestones, stocks that failed to stand out in 2017 have a chance to outperform in 2018.
S&P 500 Shines in 2017
Year to date, the S&P 500 has rallied 20.1%, thanks to impressive economic growth. Per the Commerce Department’s third estimate, the U.S. economy expanded 3.2% in the third quarter. This represents an improvement from the annualized growth rate of 3.1% in the April to June period and the strongest performance since the first quarter of 2015. Moreover, the latest figures represent the best back-to-back quarters of at least 3% growth since 2014. Impressive spending for businesses primarily backed the improvement in Gross Domestic Product (GDP) figures.
Investors should know that the S&P 500 index witnessed steady growth in earnings over the last three quarters, and will likely record earnings growth in the fourth quarter as well. Per our report, the index garnered a total of $277.3 billion, $293.4 billion, and $303.2 billion in the first, second, and third quarters, respectively. For the October to December quarter, we expect higher earnings for the S&P 500 of $310.9 billion.
Tax Cuts & Infrastructure Spending May Drive Growth in 2018
Last Friday, President Trump finally signed the much-anticipated tax bill into law. The exact earnings impact of the tax legislation is not yet clear, but preliminary estimates suggest a material earnings boost. S&P 500 earnings in 2018 are expected to be up 11.8%, with growth expected to be roughly double as a result of the tax legislation.
And now that President Trump has scored his first major legislative victory, it is likely that he will press forward with another major issue on his agenda: infrastructure reforms. It is now widely expected that the Trump administration will announce an infrastructure package in 2018.
During his presidential campaign, Trump had promised to implement a $1 trillion infrastructure package that intended to improve the state of roads, airports and bridges, as well as other public works across the country.
Recently, Trump commented that his attempt to improve the country’s infrastructure will easily garner bipartisan support. The major obstacle in this regard is funding, and if that does happen, markets could receive yet another boost next year.
5 Losers Likely to Make a Comeback in 2018
Even though stocks have recorded strong gains this year, some factors have acted as impediments. However, the projected impact of tax cuts and heightened prospects of a new infrastructure package are likely to sustain the market rally well into next year.
Therefore, investors should consider betting on stocks that have taken a beating this year but stand a good chance of notching up gains in 2018. Employing our proprietary Stock Screener, we have narrowed down our search to the following five stocks based on a favorable Zacks Rank and other relevant metrics.
Based in Houston, TX, Tailored Brands, Inc. is a leading retailer of apparel in the domestic market.
Year to date, the company has plunged 14%, significantly underperforming the S&P 500. However, the company’s prospects seem encouraging now. Tailored Brands sports a Zacks Rank #1 (Strong Buy). We expect the company to witness year-over-year earnings growth of 18.2% in 2018. (Looking for the Best Stocks for 2018? Be among the first to see our Top Ten Stocks for 2018 portfolio here.)
American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) , headquartered in Detroit, MI, is a leading supplier of driveline and drivetrain systems for the light vehicle market.
The stock is down nearly 10.3% year-to-date. However, its earnings are projected to grow 9.2% in 2017. Moreover, the Zacks Consensus Estimate for the current year has been revised upward over the last 30 days. The stock has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in The Woodlands, TX, Summit Midstream Partners, LP (SMLP - Free Report) is an operator of midstream energy properties.
The partnership has lost 18% year-to-date. However, it has a Zacks Rank #1. Moreover, it has an expected earnings growth rate of 423.5% for 2017. Also, the Zacks Consensus Estimate for the current year was revised upward over the last 60 days.
Community Bank System, Inc. (CBU - Free Report) , headquartered in De Witt, NY, is a leading provider of financial services to retail customers.
The company has lost 12.2% year-to-date. However, it has a Zacks Rank #1 with expected earnings growth for the year at almost 14%.
Headquartered in Newark, OH, Park National Corporation (PRK - Free Report) is a provider of services related to commercial banking.
The stock has lost 12% year-to-date. However, it has a Zacks Rank #1. Moreover, the Zacks Consensus Estimate for 2017 has been revised upward over the last 60 days.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
5 Underperforming Stocks of 2017 That Could Soar Next Year
Investors have had a great time for most of 2017, as major market indexes broke records on multiple occasions and are on course to create new annual records.
Earnings for the S&P 500 increased in each of the last three quarters, with the index likely to report more profits in the October to December time frame. The prime factor backing this extended gain is robust economic growth.
On the flip side, the market witnessed occasional losses. Geopolitical concerns, particularly those related to North Korea, hurt the market on several occasions. Also, there was much speculation about the likelihood of tax cuts receiving legislative approval before they were finally signed into law last week.
With expectations that the Trump administration will continue to back the market, aiding it to reach many more milestones, stocks that failed to stand out in 2017 have a chance to outperform in 2018.
S&P 500 Shines in 2017
Year to date, the S&P 500 has rallied 20.1%, thanks to impressive economic growth. Per the Commerce Department’s third estimate, the U.S. economy expanded 3.2% in the third quarter. This represents an improvement from the annualized growth rate of 3.1% in the April to June period and the strongest performance since the first quarter of 2015. Moreover, the latest figures represent the best back-to-back quarters of at least 3% growth since 2014. Impressive spending for businesses primarily backed the improvement in Gross Domestic Product (GDP) figures.
Investors should know that the S&P 500 index witnessed steady growth in earnings over the last three quarters, and will likely record earnings growth in the fourth quarter as well. Per our report, the index garnered a total of $277.3 billion, $293.4 billion, and $303.2 billion in the first, second, and third quarters, respectively. For the October to December quarter, we expect higher earnings for the S&P 500 of $310.9 billion.
Tax Cuts & Infrastructure Spending May Drive Growth in 2018
Last Friday, President Trump finally signed the much-anticipated tax bill into law. The exact earnings impact of the tax legislation is not yet clear, but preliminary estimates suggest a material earnings boost. S&P 500 earnings in 2018 are expected to be up 11.8%, with growth expected to be roughly double as a result of the tax legislation.
And now that President Trump has scored his first major legislative victory, it is likely that he will press forward with another major issue on his agenda: infrastructure reforms. It is now widely expected that the Trump administration will announce an infrastructure package in 2018.
During his presidential campaign, Trump had promised to implement a $1 trillion infrastructure package that intended to improve the state of roads, airports and bridges, as well as other public works across the country.
Recently, Trump commented that his attempt to improve the country’s infrastructure will easily garner bipartisan support. The major obstacle in this regard is funding, and if that does happen, markets could receive yet another boost next year.
5 Losers Likely to Make a Comeback in 2018
Even though stocks have recorded strong gains this year, some factors have acted as impediments. However, the projected impact of tax cuts and heightened prospects of a new infrastructure package are likely to sustain the market rally well into next year.
Therefore, investors should consider betting on stocks that have taken a beating this year but stand a good chance of notching up gains in 2018. Employing our proprietary Stock Screener, we have narrowed down our search to the following five stocks based on a favorable Zacks Rank and other relevant metrics.
Based in Houston, TX, Tailored Brands, Inc. is a leading retailer of apparel in the domestic market.
Year to date, the company has plunged 14%, significantly underperforming the S&P 500. However, the company’s prospects seem encouraging now. Tailored Brands sports a Zacks Rank #1 (Strong Buy). We expect the company to witness year-over-year earnings growth of 18.2% in 2018. (Looking for the Best Stocks for 2018? Be among the first to see our Top Ten Stocks for 2018 portfolio here.)
American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) , headquartered in Detroit, MI, is a leading supplier of driveline and drivetrain systems for the light vehicle market.
The stock is down nearly 10.3% year-to-date. However, its earnings are projected to grow 9.2% in 2017. Moreover, the Zacks Consensus Estimate for the current year has been revised upward over the last 30 days. The stock has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in The Woodlands, TX, Summit Midstream Partners, LP (SMLP - Free Report) is an operator of midstream energy properties.
The partnership has lost 18% year-to-date. However, it has a Zacks Rank #1. Moreover, it has an expected earnings growth rate of 423.5% for 2017. Also, the Zacks Consensus Estimate for the current year was revised upward over the last 60 days.
Community Bank System, Inc. (CBU - Free Report) , headquartered in De Witt, NY, is a leading provider of financial services to retail customers.
The company has lost 12.2% year-to-date. However, it has a Zacks Rank #1 with expected earnings growth for the year at almost 14%.
Headquartered in Newark, OH, Park National Corporation (PRK - Free Report) is a provider of services related to commercial banking.
The stock has lost 12% year-to-date. However, it has a Zacks Rank #1. Moreover, the Zacks Consensus Estimate for 2017 has been revised upward over the last 60 days.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>