There’s little doubt that what we are witnessing in the stock market right now is a nasty bear market. While the S&P 500 has yet to officially post a close 20% from its peak, the blue-chip index continues to hover right around those levels. The tech-heavy Nasdaq is now down over -30% from its peak last November.
Whereas the coronavirus pandemic-induced plunge was extremely swift (more along the lines of a waterfall decline), this fall in stocks has been fairly orderly and more in sync with what we’ve seen in past bear markets. There’s a myriad of factors that are pulling down equity prices, not least of which is a declining earnings outlook. We’ve seen many stocks get absolutely punished recently for either missing earnings or guiding weak.
That’s why it’s so important to target companies whose earnings picture is actually improving in this market environment. Positive earnings estimate revisions are at the heart of the Zacks Rank, and investors can use this system to find companies that are primed to surge in price – even when most stocks are falling.
The Zacks Industry Rank assists investors in locating groups of stocks whose earnings outlook is improving. One of the ways we can decide which individual stocks to include in our portfolio is by targeting stocks in different industry groups. This also has the added benefit of helping to diversify our portfolio.
The Zacks Fertilizers industry currently ranks in the top 2% out of approximately 250 industries. Because this group is ranked in the top half of all industries, we expect it to outperform the market over the next 3 to 6 months. This group has returned 42.48% this year while the market has been in correction mode. Also note the favorable characteristics for this industry:
The projected EPS growth looks particularly promising. By targeting stocks within leading industry groups, we can put the odds in our favor and improve our investing results. Let’s take a look at a Zacks Rank #1 (Strong Buy) stock within this top industry.
Sociedad Química y Minera de Chile S.A. (SQM - Free Report)
Sociedad Química y Minera produces and distributes specialty plant nutrients and fertilizers globally. SQM provides potassium chloride and sulfate for crops such as corn, rice, wheat, and sugar. The company also manufactures industrial chemicals and iodine derivative products. In addition, SQM offers lithium carbonates for various applications such as materials for batteries, air-conditioning chemicals, and heat-resistant glass. Sociedad Química y Minera was incorporated in 1968 and is headquartered in Santiago, Chile.
SQM has exceeded earnings estimates in each of the past two quarters. The fertilizer producer most recently reported Q1 EPS last week of $2.79, a 126.83% surprise over the $1.23 consensus estimate. The company has delivered a trailing four-quarter average earnings surprise of 28.19%, aiding the stock’s 140% return over the past year.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
There’s little doubt that what we are witnessing in the stock market right now is a nasty bear market. While the S&P 500 has yet to officially post a close 20% from its peak, the blue-chip index continues to hover right around those levels. The tech-heavy Nasdaq is now down over -30% from its peak last November.
Whereas the coronavirus pandemic-induced plunge was extremely swift (more along the lines of a waterfall decline), this fall in stocks has been fairly orderly and more in sync with what we’ve seen in past bear markets. There’s a myriad of factors that are pulling down equity prices, not least of which is a declining earnings outlook. We’ve seen many stocks get absolutely punished recently for either missing earnings or guiding weak.
That’s why it’s so important to target companies whose earnings picture is actually improving in this market environment. Positive earnings estimate revisions are at the heart of the Zacks Rank, and investors can use this system to find companies that are primed to surge in price – even when most stocks are falling.
The Zacks Industry Rank assists investors in locating groups of stocks whose earnings outlook is improving. One of the ways we can decide which individual stocks to include in our portfolio is by targeting stocks in different industry groups. This also has the added benefit of helping to diversify our portfolio.
The Zacks Fertilizers industry currently ranks in the top 2% out of approximately 250 industries. Because this group is ranked in the top half of all industries, we expect it to outperform the market over the next 3 to 6 months. This group has returned 42.48% this year while the market has been in correction mode. Also note the favorable characteristics for this industry:
The projected EPS growth looks particularly promising. By targeting stocks within leading industry groups, we can put the odds in our favor and improve our investing results. Let’s take a look at a Zacks Rank #1 (Strong Buy) stock within this top industry.
Sociedad Química y Minera de Chile S.A. (SQM - Free Report)
Sociedad Química y Minera produces and distributes specialty plant nutrients and fertilizers globally. SQM provides potassium chloride and sulfate for crops such as corn, rice, wheat, and sugar. The company also manufactures industrial chemicals and iodine derivative products. In addition, SQM offers lithium carbonates for various applications such as materials for batteries, air-conditioning chemicals, and heat-resistant glass. Sociedad Química y Minera was incorporated in 1968 and is headquartered in Santiago, Chile.
SQM has exceeded earnings estimates in each of the past two quarters. The fertilizer producer most recently reported Q1 EPS last week of $2.79, a 126.83% surprise over the $1.23 consensus estimate. The company has delivered a trailing four-quarter average earnings surprise of 28.19%, aiding the stock’s 140% return over the past year.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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