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Diodes Inc.is a Zacks Rank #1 (Strong Buy) and its sports an A for value and growth. Normally, I like the names that have strong growth scores and weaker value scores as that tells me I am on the right path because growth investors and value investors are looking for different things. Let's take a look at why this is a Zacks Rank #1.
Description
Diodes is a leading manufacturer and supplier of high-quality discrete and analog semiconductor products, primarily to the communications, computing, industrial, consumer electronics and automotive markets. The Company's corporate sales, marketing, engineering and logistics headquarters is located in Southern California, with two manufacturing facilities in Shanghai, China, a wafer fabrication plant in Kansas City, Missouri, engineering, sales, warehouse and logistics offices in Taipei, Taiwan and Hong Kong, and sales and support offices throughout the world. Diodes, Inc. recently acquired Anachip Corporation, a fabless analog IC company in Hsinchu Science Park, Taiwan. It's product focus is on subminiature surface-mount discrete devices, analog power management ICs and Hall-effect sensors all of which are widely used in end-user equipment.
Earnings History
DIOD has a great history of beating the number. I see four straight beats of the Zacks Consensus Estimate, and the most recent one is the biggest of the bunch. I see a 13% positive earning surprise that took place back in early May… but with broader market softness, shareholders were not rewarded.
The average positive earnings surprise over the course of the last four reports is a +8.33%.
Estimate Revisions
DIOD has seen a lot of positive earnings estimate revisions. The current quarter moved up to 75 cents from 67 cents before the most recent earnings report. The next quarter also saw a nine cent increase as well to bring that number to 80 cents.
The full year 2019 saw a big move of 30 cents, up from $2.50 to $2.80. That is the type of thing that powers a stock to become a Zacks Rank #1 (Strong Buy).
Valuation
The value style score for DIOD is an A, and let’s take a look at why that is. I see a 12x forward earnings multiple, which for a chip stock is pretty low. A 1.67x book multiple is also very low. At the same time I see a 10% annual top line growth rate and a 1.4x sales multiple. Operating margins have increased in each of the last two quarters, so things look good here.
Enviva Partners is a Zacks Rank #5 (Strong Sell) following a significant miss of the Zacks Consensus Estiamte for the March 2019 quarter. Following that miss, estimates have dropped and that pushed the stock down to a Zacks Rank #5 (Strong Sell) but a recent upgrade has some investors wondering if they should buy the dip.
Description
Enviva Partners, LP is a master limited partnership which owns and operates wood pellet production plants. It serves primarily in the United States and Europe. Enviva Partners, LP is based in Bethesda, Maryland.
Recent Earnings
The Zacks site shows that EVA reported a loss of 39 cents when the consensus was calling for a gain of 15 cents. That 54 cent miss translates to a negative earnings surprise of 360%.
A miss like that is bound to move numbers for the whole year, and those estimates carry a bigger weighting on the Zacks Rank.
Estimate Revisions
The miss looks like it has extended into this quarter and the next as well. I seen the Zacks Consensus Estimate falling from 44 cents to 12 cents following the recent miss. The following quarter was moved to 27 cents from 46 cents.
The big move came in the full year numbers, which were as high as $1.71 90 days ago, then down to $0.96 60 days ago and now at $0.52.
The 2020 numbers, however have held still at $1.33.
Upgrade
On June 24 Goldman upgraded the stock to Buy from Neutral. They also raised the target price on the stock to $37.
This is an opportunity to buy the dip... if you believe that the weakness in the EPS will end in the coming quarters. If the weakness persists, then the stock is likely to keep dropping.
3 Blue-Chip Tech Stocks to Buy to Close Out June
Last week, the S&P 500 climbed to its first record close since April as Wall Street turned more bullish on the likelihood that the Fed will cut interest rates this year. Meanwhile, investors once again seem somewhat hopeful that an end to the prolonged U.S.-China trade war might be near.
The S&P is up roughly 15% in 2019, with the likes of large-cap tech powers such as Netflix, Apple and Amazon helping lift the index. Despite continued uncertainty between the world’s two largest economies and a downturn in chip markets, technology companies look set to be long-term winners.
With that said, let’s check out three blue-chip tech stocks to consider buying right now…
1. Intuit Inc.
Intuit, which boasts a market cap of $67 billion, offers a variety of financial services geared toward taxes, small business money management, and personal finance. Intuit’s core software-as-a-service products include QuickBooks and TurboTax. The Mountain View, California-based company posted better-than-projected third quarter fiscal 2019 results in late May and raised its full-year guidance. Shares of Intuit have also jumped 31% in 2019 and 150% over the past three years, which blows away the S&P’s 46% climb.
Our current Zacks Consensus Estimates call for the company’s adjusted full-year earnings to climb 19.4% on the back of 13.2% revenue growth. Peeking ahead to next year, Intuit’s EPS figure is expected to climb roughly 13% higher than our current year estimate, with revenue projected to jump 9.5% above 2019 to reach $7.42 billion. INTU’s longer-term earnings estimate revision activity has turned far more positive recently to help it earn a Zacks Rank #2 (Buy) right now. And the tax-focused SaaS firm is a dividend payer that raised its payout by 21% this year.
2. Facebook
Facebook officially announced last week its hard asset-backed, blockchain-based cryptocurrency offering called Libra. Mark Zuckerberg’s firm, which partnered with Uber, Spotify, Mastercard and PayPal, seems set to make good on its promise to diversify amid continued backlash. Despite all of the negative headlines and increased government scrutiny, the social media giant’s core business model has remained strong, with both its daily and monthly active users up 8% last quarter. In fact, over 2.7 billion people use at least one of its “family” of services—which includes Facebook, Instagram, WhatsApp, and Messenger—every month on average. This number alone is one that should keep FB a money-making machine for years to come.
Going forward, FB hopes to expand its e-commerce reach and get back to its original goal to connect family and friends. Looking ahead, FB’s full-year 2019 revenue is expected to climb 24% to reach $69.22 billion, with 2020’s figure projected to pop 21% higher to $83.87 billion. Facebook’s adjusted full-year earnings are projected to slip 6.3% this year as it spends heavily on expansion and security. Despite the expected near-term downturn, Facebook’s 2020 EPS figure is projected to soar 31% above our 2019 estimate. Shares of FB have surged 44% in 2019, yet still rest 14% below their 52-week high of $218.62 per share. FB is a Zacks Rank #2 (Buy) at the moment and is trading at 21.9X forward 12-month Zacks Consensus EPS estimates. This marks a discount compared to its industry’s 26.9X average and its own three-year high of 37X and 27.1X median.
3. Cisco Systems, Inc.
Like its blue-chip tech peers, Cisco stock is up big in 2019, 32% to be exact. Shares of CSCO opened Wednesday at $56.54 per share, just off their 52-week week highs of $58.15. The historic networking power in recent years has expanded its IoT business. Cisco offers clients the ability to connect everything from transportation fleets to assembly lines in order to run their operations more efficiently. And the firm is coming off a better-than-projected Q3. Looking ahead, Cisco’s adjusted Q4 fiscal 2019 EPS figure is projected to jump 17% on 4.2% higher revenue. This growth is expected to help lift full-year earnings by 18.5% and revenue by 5.1%.
Plus, the company’s bottom line is expected to jump 11.3% above our current year estimate in fiscal 2020, with revenues projected to climb 3.7% higher to reach $53.79 billion. Along with this expected counited expansion, CSCO has seen its earnings estimate revision activity trend heavily in the right direction recently, especially for fiscal 2019 and 2020, to help Cisco land a Zacks Rank #2 (Buy). Cisco is also a dividend payer that sports a 2.5% yield at the moment.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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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Diodes, Enviva, Intuit, Facebook and Cisco highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – June 27, 2019 – Zacks Equity Research Diodes Inc. (DIOD - Free Report) as the Bull of the Day, Enviva Partners (EVA - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Intuit Inc. (INTU - Free Report) , Facebook and Cisco Systems, Inc. (CSCO - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Diodes Inc.is a Zacks Rank #1 (Strong Buy) and its sports an A for value and growth. Normally, I like the names that have strong growth scores and weaker value scores as that tells me I am on the right path because growth investors and value investors are looking for different things. Let's take a look at why this is a Zacks Rank #1.
Description
Diodes is a leading manufacturer and supplier of high-quality discrete and analog semiconductor products, primarily to the communications, computing, industrial, consumer electronics and automotive markets. The Company's corporate sales, marketing, engineering and logistics headquarters is located in Southern California, with two manufacturing facilities in Shanghai, China, a wafer fabrication plant in Kansas City, Missouri, engineering, sales, warehouse and logistics offices in Taipei, Taiwan and Hong Kong, and sales and support offices throughout the world. Diodes, Inc. recently acquired Anachip Corporation, a fabless analog IC company in Hsinchu Science Park, Taiwan. It's product focus is on subminiature surface-mount discrete devices, analog power management ICs and Hall-effect sensors all of which are widely used in end-user equipment.
Earnings History
DIOD has a great history of beating the number. I see four straight beats of the Zacks Consensus Estimate, and the most recent one is the biggest of the bunch. I see a 13% positive earning surprise that took place back in early May… but with broader market softness, shareholders were not rewarded.
The average positive earnings surprise over the course of the last four reports is a +8.33%.
Estimate Revisions
DIOD has seen a lot of positive earnings estimate revisions. The current quarter moved up to 75 cents from 67 cents before the most recent earnings report. The next quarter also saw a nine cent increase as well to bring that number to 80 cents.
The full year 2019 saw a big move of 30 cents, up from $2.50 to $2.80. That is the type of thing that powers a stock to become a Zacks Rank #1 (Strong Buy).
Valuation
The value style score for DIOD is an A, and let’s take a look at why that is. I see a 12x forward earnings multiple, which for a chip stock is pretty low. A 1.67x book multiple is also very low. At the same time I see a 10% annual top line growth rate and a 1.4x sales multiple. Operating margins have increased in each of the last two quarters, so things look good here.
Bear of the Day:
Enviva Partners is a Zacks Rank #5 (Strong Sell) following a significant miss of the Zacks Consensus Estiamte for the March 2019 quarter. Following that miss, estimates have dropped and that pushed the stock down to a Zacks Rank #5 (Strong Sell) but a recent upgrade has some investors wondering if they should buy the dip.
Description
Enviva Partners, LP is a master limited partnership which owns and operates wood pellet production plants. It serves primarily in the United States and Europe. Enviva Partners, LP is based in Bethesda, Maryland.
Recent Earnings
The Zacks site shows that EVA reported a loss of 39 cents when the consensus was calling for a gain of 15 cents. That 54 cent miss translates to a negative earnings surprise of 360%.
A miss like that is bound to move numbers for the whole year, and those estimates carry a bigger weighting on the Zacks Rank.
Estimate Revisions
The miss looks like it has extended into this quarter and the next as well. I seen the Zacks Consensus Estimate falling from 44 cents to 12 cents following the recent miss. The following quarter was moved to 27 cents from 46 cents.
The big move came in the full year numbers, which were as high as $1.71 90 days ago, then down to $0.96 60 days ago and now at $0.52.
The 2020 numbers, however have held still at $1.33.
Upgrade
On June 24 Goldman upgraded the stock to Buy from Neutral. They also raised the target price on the stock to $37.
This is an opportunity to buy the dip... if you believe that the weakness in the EPS will end in the coming quarters. If the weakness persists, then the stock is likely to keep dropping.
3 Blue-Chip Tech Stocks to Buy to Close Out June
Last week, the S&P 500 climbed to its first record close since April as Wall Street turned more bullish on the likelihood that the Fed will cut interest rates this year. Meanwhile, investors once again seem somewhat hopeful that an end to the prolonged U.S.-China trade war might be near.
The S&P is up roughly 15% in 2019, with the likes of large-cap tech powers such as Netflix, Apple and Amazon helping lift the index. Despite continued uncertainty between the world’s two largest economies and a downturn in chip markets, technology companies look set to be long-term winners.
With that said, let’s check out three blue-chip tech stocks to consider buying right now…
1. Intuit Inc.
Intuit, which boasts a market cap of $67 billion, offers a variety of financial services geared toward taxes, small business money management, and personal finance. Intuit’s core software-as-a-service products include QuickBooks and TurboTax. The Mountain View, California-based company posted better-than-projected third quarter fiscal 2019 results in late May and raised its full-year guidance. Shares of Intuit have also jumped 31% in 2019 and 150% over the past three years, which blows away the S&P’s 46% climb.
Our current Zacks Consensus Estimates call for the company’s adjusted full-year earnings to climb 19.4% on the back of 13.2% revenue growth. Peeking ahead to next year, Intuit’s EPS figure is expected to climb roughly 13% higher than our current year estimate, with revenue projected to jump 9.5% above 2019 to reach $7.42 billion. INTU’s longer-term earnings estimate revision activity has turned far more positive recently to help it earn a Zacks Rank #2 (Buy) right now. And the tax-focused SaaS firm is a dividend payer that raised its payout by 21% this year.
2. Facebook
Facebook officially announced last week its hard asset-backed, blockchain-based cryptocurrency offering called Libra. Mark Zuckerberg’s firm, which partnered with Uber, Spotify, Mastercard and PayPal, seems set to make good on its promise to diversify amid continued backlash. Despite all of the negative headlines and increased government scrutiny, the social media giant’s core business model has remained strong, with both its daily and monthly active users up 8% last quarter. In fact, over 2.7 billion people use at least one of its “family” of services—which includes Facebook, Instagram, WhatsApp, and Messenger—every month on average. This number alone is one that should keep FB a money-making machine for years to come.
Going forward, FB hopes to expand its e-commerce reach and get back to its original goal to connect family and friends. Looking ahead, FB’s full-year 2019 revenue is expected to climb 24% to reach $69.22 billion, with 2020’s figure projected to pop 21% higher to $83.87 billion. Facebook’s adjusted full-year earnings are projected to slip 6.3% this year as it spends heavily on expansion and security. Despite the expected near-term downturn, Facebook’s 2020 EPS figure is projected to soar 31% above our 2019 estimate. Shares of FB have surged 44% in 2019, yet still rest 14% below their 52-week high of $218.62 per share. FB is a Zacks Rank #2 (Buy) at the moment and is trading at 21.9X forward 12-month Zacks Consensus EPS estimates. This marks a discount compared to its industry’s 26.9X average and its own three-year high of 37X and 27.1X median.
3. Cisco Systems, Inc.
Like its blue-chip tech peers, Cisco stock is up big in 2019, 32% to be exact. Shares of CSCO opened Wednesday at $56.54 per share, just off their 52-week week highs of $58.15. The historic networking power in recent years has expanded its IoT business. Cisco offers clients the ability to connect everything from transportation fleets to assembly lines in order to run their operations more efficiently. And the firm is coming off a better-than-projected Q3. Looking ahead, Cisco’s adjusted Q4 fiscal 2019 EPS figure is projected to jump 17% on 4.2% higher revenue. This growth is expected to help lift full-year earnings by 18.5% and revenue by 5.1%.
Plus, the company’s bottom line is expected to jump 11.3% above our current year estimate in fiscal 2020, with revenues projected to climb 3.7% higher to reach $53.79 billion. Along with this expected counited expansion, CSCO has seen its earnings estimate revision activity trend heavily in the right direction recently, especially for fiscal 2019 and 2020, to help Cisco land a Zacks Rank #2 (Buy). Cisco is also a dividend payer that sports a 2.5% yield at the moment.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
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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.