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The Zacks Analyst Blog Highlights: Bonanza Creek Energy, Cleveland-Cliffs, Foundation Building Materials, Manitowoc and Mellanox Technologies
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For Immediate Release
Chicago, IL – July 13, 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 Bonanza Creek Energy, Inc. , Cleveland-Cliffs Inc. (CLF - Free Report) , Foundation Building Materials, Inc. , The Manitowoc Company, Inc. (MTW - Free Report) and Mellanox Technologies, Ltd. .
Q2 Likely to Show Strongest Earnings Since 2010: Top Picks
Second-quarter earnings season has commenced, which means investors are closely watching how corporate America performed in the three months ended June. The outcome seems to be quite encouraging, as U.S. companies are expected to see one of the strongest quarterly earnings season in almost a decade.
Strengthening economic growth and Republican-led tax cuts are widely expected to drive earnings estimates. U.S. and Chinese officials resuming talks over trade issues, in the meantime, helped calm nerves. After all, intensifying trade tensions pose a threat to corporate profits (read more: 5 Ultra-Safe Stocks to Counter Fresh Trade War Threats).
Energy players, materials, construction, industrial products, technology and financials are likely to record the highest year-over-year earnings growth. Thus, over the next couple of weeks, let us keep an eye on stocks from these sectors that are likely to make the most of the second-quarter earnings season. Here, we should also bear in mind that better-than-expected earnings performances generally lead to a rally in the share price.
Catalysts Behind Q2 Earnings
Second-quarter earnings for the S&P 500 companies are estimated to improve 19.1% from the same period last year on 8.2% higher revenues. Second-quarter earnings, hence, are poised to set a record after 2010. Such growth, however, will be slightly below 24.6% earnings growth on 8.7% revenue improvement seen in the first three months of the year.
The gains are likely to be broad-based, with nearly all the sectors expected to report year-over-year earnings growth, except for autos and conglomerates. Around 11 of these sectors are likely to come up with double-digit growth (read more: Start of Q2 Earnings Season).
Earnings are likely to rise mostly on solid economic growth and Trump’s policies including tax cuts. Trump’s economy is also in good shape, with the United States creating 213,000 jobs in June; a sign that corporates are finding ways to fill positions despite the lack of skilled workers. Such upbeat hiring figures breezed past analysts’ estimates of 200,000 job additions.
Job gains were pretty broad-based, with white-collar jobs leading the way with 50,000 additions. From manufacturers, health-care providers to construction companies, all hired workers, a clear sign of a burgeoning economy.
The U.S. economy, in the meanwhile, is projected to expand in the second quarter at an annual pace of nearly 4% after a 2.2% gain in the first three months of this year, economists say (read more: US GDP to Hit Elusive 3% Annual Growth in 13 Years: 5 Picks).
The tax overhaul policy is providing the much needed wherewithal to corporates. After all, the tax laws gave companies massive relief as they will now be paying between 8% and 15.5% instead of the earlier 35% for bringing back money held overseas.
Energy to See Highest Pickup in Earnings Estimates
The energy sector is poised to report highest earnings growth among all sectors, which is estimated to surge 138.4% from the same period last year on 20.3% higher revenues.
Among the sub-sectors, oil and gas exploration and production; oil and gas refining and marketing; oil and gas equipment and services; and oil and gas drilling companies are positioned to report solid growth.
A more or less healthy crude pricing scenario is primarily fueling the optimism. Needless to say, that oil went from than $50 a barrel a year ago to as much as $80 a barrel in recent times.
Other Potential Gainers of Q2
The materials sector has recently been looking up, with second-quarter earnings expected to rise 54% on 24.1% higher revenues. Construction is likely to report the third-highest year-over-year profit growth, with second-quarter earnings poised improve 45% from the same period last year on 22.5% higher revenues.
Earnings for the Industrial sector are set to grow 24.5% from the same period last year on 10.9% higher revenues. Firm business investment helped factories expand, while manufacturers are also on a hiring spree and are paying more than other jobs.
Second-quarter earnings for the tech sector are poised to be up 23.8% from the same period last year on 10.7% higher revenues. High profits are expected from financial segments as well. Total second-quarter earnings for the financial sector are projected to rise 18.4% from the same period last year on 3.8% higher revenues. Banks, insurers and asset managers are all expected to report double-digit growth, mostly on higher interest rates (read more: Fed Lifts Rates for the Second Time in 2018: Winners & Losers).
The table below shows the summary picture for the second quarter, in contrast to what was achieved in the first quarter.
These 5 Stocks Could Come Up With Blowout Numbers
Such promising numbers call for investing in companies from the aforesaid sectors, which are expected to report a significant uptick in second-quarter earnings.
These stocks have a positive Earnings ESP. This is our proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
These stocks also flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Bonanza Creek Energy, Inc. engages in the exploration, development, and production of onshore oil and related liquids-rich natural gas in the United States. The stock currently has a Zacks Rank 1. The Zacks Consensus Estimate for its current year earnings surged 26.9% over the last 60 days.
The company is expected to report earnings results for the quarter ending June 2018 on Aug 14. Bonanza Creek Energy has an Earnings ESP of +19.53%.
Cleveland-Cliffs Inc. operates as an iron ore mining company in the United States. The stock currently has a Zacks Rank 2. The Zacks Consensus Estimate for its current-year earnings rose 13.4% over the last 60 days.
The company is expected to report earnings results for the quarter ending June 2018 on Jul 20. Cleveland-Cliffs has an Earnings ESP of +8.24%.
Foundation Building Materials, Inc. distributes building products in the United States. The stock currently has a Zacks Rank 2. The Zacks Consensus Estimate for its current-year earnings increased 1.8% over the last 60 days.
The company is expected to report earnings results for the quarter ending June 2018 on Aug 2. Foundation Building Materials has an Earnings ESP of +21.05%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Manitowoc Company, Inc. provides engineered lifting equipment for the construction industry in the Americas, and internationally. The stock currently has a Zacks Rank 1. The Zacks Consensus Estimate for its current-year earnings climbed 8% over the last 60 days.
The company is expected to report earnings results for the quarter ending June 2018 on Aug 6. Manitowoc Company has an Earnings ESP of +21.05%.
Mellanox Technologies, Ltd. a fabless semiconductor company, designs, manufactures, and sells interconnect products and solutions. The stock currently has a Zacks Rank 1. The Zacks Consensus Estimate for its current-year earnings improved 6.6% over the last 60 days.
The company is expected to report earnings results for the quarter ending June 2018 on Jul 17. Mellanox Technologies has an Earnings ESP of +4.44%.
The company is expected to report earnings results for the quarter ending June 2018 on Jul 25. Atlantic Capital Bancshares has an Earnings ESP of +12.05%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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 nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% 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.
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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The Zacks Analyst Blog Highlights: Bonanza Creek Energy, Cleveland-Cliffs, Foundation Building Materials, Manitowoc and Mellanox Technologies
For Immediate Release
Chicago, IL – July 13, 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 Bonanza Creek Energy, Inc. , Cleveland-Cliffs Inc. (CLF - Free Report) , Foundation Building Materials, Inc. , The Manitowoc Company, Inc. (MTW - Free Report) and Mellanox Technologies, Ltd. .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Thursday’s Analyst Blog:
Q2 Likely to Show Strongest Earnings Since 2010: Top Picks
Second-quarter earnings season has commenced, which means investors are closely watching how corporate America performed in the three months ended June. The outcome seems to be quite encouraging, as U.S. companies are expected to see one of the strongest quarterly earnings season in almost a decade.
Strengthening economic growth and Republican-led tax cuts are widely expected to drive earnings estimates. U.S. and Chinese officials resuming talks over trade issues, in the meantime, helped calm nerves. After all, intensifying trade tensions pose a threat to corporate profits (read more: 5 Ultra-Safe Stocks to Counter Fresh Trade War Threats).
Energy players, materials, construction, industrial products, technology and financials are likely to record the highest year-over-year earnings growth. Thus, over the next couple of weeks, let us keep an eye on stocks from these sectors that are likely to make the most of the second-quarter earnings season. Here, we should also bear in mind that better-than-expected earnings performances generally lead to a rally in the share price.
Catalysts Behind Q2 Earnings
Second-quarter earnings for the S&P 500 companies are estimated to improve 19.1% from the same period last year on 8.2% higher revenues. Second-quarter earnings, hence, are poised to set a record after 2010. Such growth, however, will be slightly below 24.6% earnings growth on 8.7% revenue improvement seen in the first three months of the year.
The gains are likely to be broad-based, with nearly all the sectors expected to report year-over-year earnings growth, except for autos and conglomerates. Around 11 of these sectors are likely to come up with double-digit growth (read more: Start of Q2 Earnings Season).
Earnings are likely to rise mostly on solid economic growth and Trump’s policies including tax cuts. Trump’s economy is also in good shape, with the United States creating 213,000 jobs in June; a sign that corporates are finding ways to fill positions despite the lack of skilled workers. Such upbeat hiring figures breezed past analysts’ estimates of 200,000 job additions.
Job gains were pretty broad-based, with white-collar jobs leading the way with 50,000 additions. From manufacturers, health-care providers to construction companies, all hired workers, a clear sign of a burgeoning economy.
The U.S. economy, in the meanwhile, is projected to expand in the second quarter at an annual pace of nearly 4% after a 2.2% gain in the first three months of this year, economists say (read more: US GDP to Hit Elusive 3% Annual Growth in 13 Years: 5 Picks).
The tax overhaul policy is providing the much needed wherewithal to corporates. After all, the tax laws gave companies massive relief as they will now be paying between 8% and 15.5% instead of the earlier 35% for bringing back money held overseas.
Energy to See Highest Pickup in Earnings Estimates
The energy sector is poised to report highest earnings growth among all sectors, which is estimated to surge 138.4% from the same period last year on 20.3% higher revenues.
Among the sub-sectors, oil and gas exploration and production; oil and gas refining and marketing; oil and gas equipment and services; and oil and gas drilling companies are positioned to report solid growth.
A more or less healthy crude pricing scenario is primarily fueling the optimism. Needless to say, that oil went from than $50 a barrel a year ago to as much as $80 a barrel in recent times.
Other Potential Gainers of Q2
The materials sector has recently been looking up, with second-quarter earnings expected to rise 54% on 24.1% higher revenues. Construction is likely to report the third-highest year-over-year profit growth, with second-quarter earnings poised improve 45% from the same period last year on 22.5% higher revenues.
Earnings for the Industrial sector are set to grow 24.5% from the same period last year on 10.9% higher revenues. Firm business investment helped factories expand, while manufacturers are also on a hiring spree and are paying more than other jobs.
Second-quarter earnings for the tech sector are poised to be up 23.8% from the same period last year on 10.7% higher revenues. High profits are expected from financial segments as well. Total second-quarter earnings for the financial sector are projected to rise 18.4% from the same period last year on 3.8% higher revenues. Banks, insurers and asset managers are all expected to report double-digit growth, mostly on higher interest rates (read more: Fed Lifts Rates for the Second Time in 2018: Winners & Losers).
The table below shows the summary picture for the second quarter, in contrast to what was achieved in the first quarter.
These 5 Stocks Could Come Up With Blowout Numbers
Such promising numbers call for investing in companies from the aforesaid sectors, which are expected to report a significant uptick in second-quarter earnings.
These stocks have a positive Earnings ESP. This is our proprietary methodology for determining stocks that have the best chance to surprise with their next earnings announcement. It provides the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
These stocks also flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Bonanza Creek Energy, Inc. engages in the exploration, development, and production of onshore oil and related liquids-rich natural gas in the United States. The stock currently has a Zacks Rank 1. The Zacks Consensus Estimate for its current year earnings surged 26.9% over the last 60 days.
The company is expected to report earnings results for the quarter ending June 2018 on Aug 14. Bonanza Creek Energy has an Earnings ESP of +19.53%.
Cleveland-Cliffs Inc. operates as an iron ore mining company in the United States. The stock currently has a Zacks Rank 2. The Zacks Consensus Estimate for its current-year earnings rose 13.4% over the last 60 days.
The company is expected to report earnings results for the quarter ending June 2018 on Jul 20. Cleveland-Cliffs has an Earnings ESP of +8.24%.
Foundation Building Materials, Inc. distributes building products in the United States. The stock currently has a Zacks Rank 2. The Zacks Consensus Estimate for its current-year earnings increased 1.8% over the last 60 days.
The company is expected to report earnings results for the quarter ending June 2018 on Aug 2. Foundation Building Materials has an Earnings ESP of +21.05%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Manitowoc Company, Inc. provides engineered lifting equipment for the construction industry in the Americas, and internationally. The stock currently has a Zacks Rank 1. The Zacks Consensus Estimate for its current-year earnings climbed 8% over the last 60 days.
The company is expected to report earnings results for the quarter ending June 2018 on Aug 6. Manitowoc Company has an Earnings ESP of +21.05%.
Mellanox Technologies, Ltd. a fabless semiconductor company, designs, manufactures, and sells interconnect products and solutions. The stock currently has a Zacks Rank 1. The Zacks Consensus Estimate for its current-year earnings improved 6.6% over the last 60 days.
The company is expected to report earnings results for the quarter ending June 2018 on Jul 17. Mellanox Technologies has an Earnings ESP of +4.44%.
The company is expected to report earnings results for the quarter ending June 2018 on Jul 25. Atlantic Capital Bancshares has an Earnings ESP of +12.05%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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 nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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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/performance for information about the performance numbers displayed in this press release.