We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights: American Public, BankFinancial, Century Communities, CPI and IEC
Read MoreHide Full Article
For Immediate Release
Chicago, IL – May 22, 2018 – 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 American Public Education, Inc. (APEI - Free Report) , BankFinancial Corporation (BFIN - Free Report) , Century Communities, Inc. (CCS - Free Report) , CPI Aerostructures, Inc. (CVU - Free Report) and IEC Electronics Corp. .
Here are highlights from Monday’s Analyst Blog:
5 Top Stocks to Buy on U.S. Dollar’s Newfound Strength
The U.S. dollar maintains its strong rally since the start of the second quarter. The strength is primarily attributable to an uptick in U.S. government bond yields. Inflationary pressure owing to rising oil and raw material prices drove the U.S. 10-year bond yield higher.
Small caps, being U.S.-centric, are better poised to weather a stronger U.S. dollar. This category of stocks is ripping to fresh records as they are cushioned against the loss of competitiveness and currency translation impact of a stronger greenback. Needless to say that as the dollar rises; multi-nationals lose their competitive advantage, as foreign customers see U.S. goods as more expensive than non-U.S. goods.
What’s Driving Dollar?
The ICE U.S. Dollar Index, which measures dollar’s strength against a basket of major currencies, has been above the psychologically key 3% level since the beginning of April.
The greenback continues to rise in tandem with government bond yields. After all, currency traders tend to be drawn toward such currencies where interest rates are attractive. The yield on the 10-year Treasury note, a benchmark for interest rates, climbed above the 3% threshold to touch a seven-year high in the past week (read more: Resurgence of 10-Year Bond Yield: Winners & Losers).
Inflationary pressure, being more prevalent, led to a selloff of Treasuries and has kept the yield at elevated levels for now. Lest we forget, the Fed is set to take aggressive steps with respect to rate hikes this year. In fact, the Fed will release the minutes from its May 1-2 meeting this week, which may add to dollar’s strength and Treasury yields, provided they sound hawkish.
What Does a Stronger Dollar Mean for Stocks?
A rising dollar impedes earnings growth, which suggests that returns from the equity market might be subdued. Particularly, companies that derive a lion’s share of their earnings from overseas will be dealt the biggest blow. Such companies are exposed to foreign exchange risks between the United States and other countries they are operating in. Thus, if dollar gains strength, it tends to dent foreign sales of such companies.
S&P Global added that with every 1% rise in the greenback, large-cap companies with heavier U.S. concentration in terms of revenue generation have gained 71 basis points on average. For small caps, the correlation was way better. In fact, small caps have outperformed large caps so far this year (read more: Wall Street's Biggest Gains Come From Smallest Names!).
The tax cuts enacted this year along with deregulation should further benefit small caps, helping their profits accelerate in the near term. One of the popular measures of small caps, the Russell 200 Index, has risen 5.9% so far this year, while the broader S&P 500 gained only 0.6%. Year to date, nearly $3.7 billion has gone into small-cap U.S. equity exchange-traded funds, per FactSet. This category of U.S. stock ETFs has, thus, become the second-most popular category in the last decade.
5 Winning Stocks
Small caps are set to benefit from wider domestic revenue exposure which insulates them from the effects of a stronger dollar. Thus, investing in stocks with high domestic exposure in terms of revenue generation seems judicious. We have picked five such stocks that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).
American Public Education, Inc. provides online and campus-based postsecondary education. The company has a Zacks Rank #2. In the last 60 days, two earnings estimates moved up, while none moved lower for the current year. The Zacks Consensus Estimate for earnings has moved 1.9% up in the same time frame. The stock’s expected growth rate for the current year is 21.7% versus the Schools industry’s projected rally of 15.7%.
BankFinancial Corporation operates as the holding company for BankFinancial, National Association that provides commercial, family, and personal banking products and services in Illinois. The company has a Zacks Rank #2. In the last 60 days, one earnings estimate moved up, compared with none in the opposite direction, at least when looking at the current-year time frame. Meanwhile, the Zacks Consensus Estimate for earnings has risen 1.5%. The stock’s estimated growth rate for the current year is 39.7% versus the Financial - Savings and Loan industry’s expected rally of 22%.
Century Communities, Inc. engages in the development, design, construction, marketing, and sale of single-family attached and detached homes in metropolitan areas of California, Colorado, Georgia, Nevada, North Carolina, South Carolina, Tennessee, Texas, Utah, and Washington. The company has a Zacks Rank #1. In the last 60 days, two earnings estimates moved up, compared with one lower for the current year. The Zacks Consensus Estimate for earnings has moved up 9.9% in the same time period. The stock’s expected growth rate for the current year is 47% versus the Building Products - Home Builders industry’s projected growth of 31.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
CPI Aerostructures, Inc. engages in the contract production of structural aircraft parts for fixed wing aircraft and helicopters in the commercial and defense markets. The company has a Zacks Rank #2. In the last 60 days, one earnings estimate moved up, while none moved lower for the current year. The Zacks Consensus Estimate for earnings has risen 21.1% in the same time frame. The stock’s estimated growth rate for the current year is 32.3% versus the Aerospace - Defense Equipment industry’s projected rally of 14.7%.
IEC Electronics Corp. provides electronic manufacturing services in the United States. The company has a Zacks Rank #1. In the last 60 days, one earnings estimate moved up, while none moved lower for the current year. Meanwhile, the Zacks Consensus Estimate for earnings jumped 58.1%. The stock’s expected growth rate for the current year is more than 100% versus the Electronics - Miscellaneous Components industry’s projected rally of 20.3%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Zacks Analyst Blog Highlights: American Public, BankFinancial, Century Communities, CPI and IEC
For Immediate Release
Chicago, IL – May 22, 2018 – 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 American Public Education, Inc. (APEI - Free Report) , BankFinancial Corporation (BFIN - Free Report) , Century Communities, Inc. (CCS - Free Report) , CPI Aerostructures, Inc. (CVU - Free Report) and IEC Electronics Corp. .
Here are highlights from Monday’s Analyst Blog:
5 Top Stocks to Buy on U.S. Dollar’s Newfound Strength
The U.S. dollar maintains its strong rally since the start of the second quarter. The strength is primarily attributable to an uptick in U.S. government bond yields. Inflationary pressure owing to rising oil and raw material prices drove the U.S. 10-year bond yield higher.
Small caps, being U.S.-centric, are better poised to weather a stronger U.S. dollar. This category of stocks is ripping to fresh records as they are cushioned against the loss of competitiveness and currency translation impact of a stronger greenback. Needless to say that as the dollar rises; multi-nationals lose their competitive advantage, as foreign customers see U.S. goods as more expensive than non-U.S. goods.
What’s Driving Dollar?
The ICE U.S. Dollar Index, which measures dollar’s strength against a basket of major currencies, has been above the psychologically key 3% level since the beginning of April.
The greenback continues to rise in tandem with government bond yields. After all, currency traders tend to be drawn toward such currencies where interest rates are attractive. The yield on the 10-year Treasury note, a benchmark for interest rates, climbed above the 3% threshold to touch a seven-year high in the past week (read more: Resurgence of 10-Year Bond Yield: Winners & Losers).
Inflationary pressure, being more prevalent, led to a selloff of Treasuries and has kept the yield at elevated levels for now. Lest we forget, the Fed is set to take aggressive steps with respect to rate hikes this year. In fact, the Fed will release the minutes from its May 1-2 meeting this week, which may add to dollar’s strength and Treasury yields, provided they sound hawkish.
What Does a Stronger Dollar Mean for Stocks?
A rising dollar impedes earnings growth, which suggests that returns from the equity market might be subdued. Particularly, companies that derive a lion’s share of their earnings from overseas will be dealt the biggest blow. Such companies are exposed to foreign exchange risks between the United States and other countries they are operating in. Thus, if dollar gains strength, it tends to dent foreign sales of such companies.
S&P Global added that with every 1% rise in the greenback, large-cap companies with heavier U.S. concentration in terms of revenue generation have gained 71 basis points on average. For small caps, the correlation was way better. In fact, small caps have outperformed large caps so far this year (read more: Wall Street's Biggest Gains Come From Smallest Names!).
The tax cuts enacted this year along with deregulation should further benefit small caps, helping their profits accelerate in the near term. One of the popular measures of small caps, the Russell 200 Index, has risen 5.9% so far this year, while the broader S&P 500 gained only 0.6%. Year to date, nearly $3.7 billion has gone into small-cap U.S. equity exchange-traded funds, per FactSet. This category of U.S. stock ETFs has, thus, become the second-most popular category in the last decade.
5 Winning Stocks
Small caps are set to benefit from wider domestic revenue exposure which insulates them from the effects of a stronger dollar. Thus, investing in stocks with high domestic exposure in terms of revenue generation seems judicious. We have picked five such stocks that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).
American Public Education, Inc. provides online and campus-based postsecondary education. The company has a Zacks Rank #2. In the last 60 days, two earnings estimates moved up, while none moved lower for the current year. The Zacks Consensus Estimate for earnings has moved 1.9% up in the same time frame. The stock’s expected growth rate for the current year is 21.7% versus the Schools industry’s projected rally of 15.7%.
BankFinancial Corporation operates as the holding company for BankFinancial, National Association that provides commercial, family, and personal banking products and services in Illinois. The company has a Zacks Rank #2. In the last 60 days, one earnings estimate moved up, compared with none in the opposite direction, at least when looking at the current-year time frame. Meanwhile, the Zacks Consensus Estimate for earnings has risen 1.5%. The stock’s estimated growth rate for the current year is 39.7% versus the Financial - Savings and Loan industry’s expected rally of 22%.
Century Communities, Inc. engages in the development, design, construction, marketing, and sale of single-family attached and detached homes in metropolitan areas of California, Colorado, Georgia, Nevada, North Carolina, South Carolina, Tennessee, Texas, Utah, and Washington. The company has a Zacks Rank #1. In the last 60 days, two earnings estimates moved up, compared with one lower for the current year. The Zacks Consensus Estimate for earnings has moved up 9.9% in the same time period. The stock’s expected growth rate for the current year is 47% versus the Building Products - Home Builders industry’s projected growth of 31.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
CPI Aerostructures, Inc. engages in the contract production of structural aircraft parts for fixed wing aircraft and helicopters in the commercial and defense markets. The company has a Zacks Rank #2. In the last 60 days, one earnings estimate moved up, while none moved lower for the current year. The Zacks Consensus Estimate for earnings has risen 21.1% in the same time frame. The stock’s estimated growth rate for the current year is 32.3% versus the Aerospace - Defense Equipment industry’s projected rally of 14.7%.
IEC Electronics Corp. provides electronic manufacturing services in the United States. The company has a Zacks Rank #1. In the last 60 days, one earnings estimate moved up, while none moved lower for the current year. Meanwhile, the Zacks Consensus Estimate for earnings jumped 58.1%. The stock’s expected growth rate for the current year is more than 100% versus the Electronics - Miscellaneous Components industry’s projected rally of 20.3%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com
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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.