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Zacks.com highlights: Rice Midstream Partners, Jacobs Engineering Group, Lam Research, Diplomat Pharmacy and Forward Air
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For Immediate Release
Chicago, IL – Jan 15, 2018 - Stocks in this week’s article include: Rice Midstream Partners LP , Jacobs Engineering Group Inc. , Lam Research Corporation (LRCX - Free Report) , Diplomat Pharmacy, Inc. and Forward Air Corporation (FWRD - Free Report) .
Screen of the Week of Zacks Investment Research:
5 Low Leverage Stocks to Buy Amid Rate Hike Woes
Debt financing is a common practice among corporates to ensure smooth operations and business expansion. This is because depending solely on retained earnings for business growth is impracticable.
Although companies may raise capital through equity financing, debt financing has always been a favored choice. While debt financing brings with it the liability of interest payment, it provides funding at lower rates than equity financing, especially in periods of historically low interest rates. Another perk of debt financing is that the interest on debt is tax deductible.
Yet, debt financing has its drawbacks. Since too much debt increases the cost of capital for the company, bearing huge debt tends to shoot up the company’s risk of bankruptcy, especially in times of economic crisis.
With the Federal Reserve having raised their benchmark interest rate last December and two more hikes expected by analysts this year, the debt scenario does not seem very favorable for U.S. stocks.
The fact that only a fortunate few can avoid taking debt, should not dissuade investors from betting on stocks. Instead, a prudent investor will try to pick stocks that are less financially leveraged as companies with high debt load are risky options.
And here comes the importance of leverage ratios, which have been constructed historically to save investors from debt traps. The debt-to-equity ratio is one such measure, perhaps the most popular one, to evaluate a company’s credit worthiness, for potential equity investments.
Analyzing Debt/Equity
Debt-to-Equity Ratio = Total Liabilities/Shareholders’ Equity
This metric is a liquidity ratio that indicates the amount of financial risk a company bears. A company with a lower debt-to-equity ratio implies that it has a more or less financially stable business, thereby making it a better investment pick.
With the Q4 reporting cycle about to begin, investors will tend to target stocks exhibiting solid earnings growth.
But choosing stocks that boast earnings growth only might not be a wise investment strategy. A higher degree of leverage can turn an attractive investment option into a nightmare in times of financial crisis.
Get the remaining stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back testing software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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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Zacks.com highlights: Rice Midstream Partners, Jacobs Engineering Group, Lam Research, Diplomat Pharmacy and Forward Air
For Immediate Release
Chicago, IL – Jan 15, 2018 - Stocks in this week’s article include: Rice Midstream Partners LP , Jacobs Engineering Group Inc. , Lam Research Corporation (LRCX - Free Report) , Diplomat Pharmacy, Inc. and Forward Air Corporation (FWRD - Free Report) .
Screen of the Week of Zacks Investment Research:
5 Low Leverage Stocks to Buy Amid Rate Hike Woes
Debt financing is a common practice among corporates to ensure smooth operations and business expansion. This is because depending solely on retained earnings for business growth is impracticable.
Although companies may raise capital through equity financing, debt financing has always been a favored choice. While debt financing brings with it the liability of interest payment, it provides funding at lower rates than equity financing, especially in periods of historically low interest rates. Another perk of debt financing is that the interest on debt is tax deductible.
Yet, debt financing has its drawbacks. Since too much debt increases the cost of capital for the company, bearing huge debt tends to shoot up the company’s risk of bankruptcy, especially in times of economic crisis.
With the Federal Reserve having raised their benchmark interest rate last December and two more hikes expected by analysts this year, the debt scenario does not seem very favorable for U.S. stocks.
The fact that only a fortunate few can avoid taking debt, should not dissuade investors from betting on stocks. Instead, a prudent investor will try to pick stocks that are less financially leveraged as companies with high debt load are risky options.
And here comes the importance of leverage ratios, which have been constructed historically to save investors from debt traps. The debt-to-equity ratio is one such measure, perhaps the most popular one, to evaluate a company’s credit worthiness, for potential equity investments.
Analyzing Debt/Equity
Debt-to-Equity Ratio = Total Liabilities/Shareholders’ Equity
This metric is a liquidity ratio that indicates the amount of financial risk a company bears. A company with a lower debt-to-equity ratio implies that it has a more or less financially stable business, thereby making it a better investment pick.
With the Q4 reporting cycle about to begin, investors will tend to target stocks exhibiting solid earnings growth.
But choosing stocks that boast earnings growth only might not be a wise investment strategy. A higher degree of leverage can turn an attractive investment option into a nightmare in times of financial crisis.
And that's what we're screening for today…
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/288637/5-low-leverage-stocks-to-buy-amid-rate-hike-woes
Get the remaining stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back testing software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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.