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Take the Zacks Rank, for example. You know it’s one of the most successful stock rating systems out there, but at any given time there are hundreds of stocks with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy).
You can’t buy them all.
That’s where the Zacks Style Scores come in. These indicators help to fine tune that long list of stocks to increase your odds of outperformance, and they’re split into Value, Growth and Momentum scores depending on what kind of investor you are.
But if you want everything in one place, then there’s the VGM, which combines all three styles into one score.
The past several years have been pretty rough for the agriculture industry and farmers. Fortunately, this is a resilient and sturdy group that doesn’t shirk in the face of hardships… and it looks like their patience is finally paying off. Wall Street is beginning to turn its attention back to the space amid rising crop production and commodity prices.
It goes without saying (though we’re going to say it) that the companies catering to this space need to be as resilient and sturdy as their customers in order to take advantage of a more virtuous cycle.
Mosaic (MOS - Free Report) is one such company that has been through some lean times lately, but seems ready to sprout. Take a look at the graph below. After several quarters of steep losses, it has beaten the Zacks Consensus Estimate the last couple of times. And shares are up more than 50% since its last quarterly report in early November.
By the way, that third-quarter release included earnings per share of 23 cents, which topped our expectations by nearly 4.6%. Net sales of $2.38 billion were down year-over-year and missed the forecast, but it showed a continuation of strengthening fundamental trends that began in 2020 and will continue into 2021. There’s a lot of ground to recover as fertilizer inventories remain below average in many of the largest global markets.
In a nutshell, MOS is all about fertilizer. More specifically, it’s a leading producer and marketer of concentrated phosphate and potash crop nutrients. In addition to an improving environment, the company is also benefiting from its cost-reduction initiatives, which includes streamlining, centralizing its mining operations and automation.
Analysts are taking notice of MOS and its space again, which has led to some big upward revisions. The Zacks Consensus Estimate for 2020 has jumped 31.7% in 60 days to 54 cents. But 2021 is shaping up to be even better.
The Zacks Consensus Estimate is currently calling for $1.48 this year, which would mark a year-over-year surge of more than 170%. Earnings estimates for 2021 are up about 41% in two months.
Though still one of the country’s leading automobile finance companies, Ally Financial (ALLY - Free Report) has dreams that go well beyond its original incarnation as General Motors Acceptance Corp. The company made diversification a major goal for its future, which helped it to weather this pandemic while positioning it for further prosperity down the road.
ALLY is now a diversified financial services company. Automobile financing still makes up the bulk of its business (68.7% of total net revenues in 2019), but it has three other business segments: insurance (20.8%), corporate finance (4.4%) and mortgage finance (3%).
As part of the financial – consumer loans space, ALLY is in the Top 23% of the Zacks Industry Rank.
Earnings estimates have really taken off over the past week after the company posted solid fourth-quarter results.
ALLY reported earnings per share of $1.60, which was more than 68% better than last year and 52.4% on top of the Zacks Consensus Estimate at $1.05. That makes three straight quarters of positive surprises.
Total net revenues of $1.98 billion was 20.6% better than the year-ago quarter and more than 19% over the Zacks Consensus Estimate. Lower provisions and a healthy balance sheet helped the quarter’s strong results.
Analysts must have really liked what they saw, because earnings estimates hit another gear in the past week. The Zacks Consensus Estimate for this year is up 9.5% in seven days to $4.40, while expectations for next year climbed 7.8% to $5.42. In other words, analysts are expecting 23.2% earnings growth in 2022 over 2021.
But this is really nothing new. Estimates have been on the rise for weeks. Analysts revised their 2021 estimates by nearly 20% over the past two months, while 2022 expectations have advanced about 15.3% in that time.
If you had invested in the home builders a few months ago, you’d be making money already! But that’s all right. It’s probably not too late, as the fiscal first quarter report of D.R. Horton (DHI - Free Report) showed that housing market conditions continue to be strong.
And don’t forget that the building products – home builders space is in the Top 13% of the Zacks Industry Rank.
DHI is one of the leading national homebuilders, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets. It has operations in 90 markets across 29 states and closed more than 71,100 homes in 2020.
And even more is expected this year. In its fiscal first quarter report, the company expects to close 80K to 82K homes in 2021 and generate consolidated revenues of between $25.2 billion and $25.8 billion.
Analysts liked what they saw in the quarter, which kept earnings estimates moving higher for DHI. The Zacks Consensus Estimate for this year (ending September 2021) is up 5.5% in the past 60 days to $8.36. Most of that advance has come in just the past seven days.
The Zacks Consensus Estimate for next year (ending September 2022) is up 5.3% in two months to $9.51, suggesting year-over-year improvement of 13.8%.
By the way, the company’s fiscal first quarter report from earlier this month included its seventh straight positive surprise. Earnings per share of $2.14 beat our expectations by more than 24% and brought the four-quarter average surprise to more than 25%. Total revenues of $5.9 billion were 6% better than the Zacks Consensus Estimate and a more than 47% improvement on last year.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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.
Image: Bigstock
3 Top VGM Buys
Sometimes you just get too much of a good thing!
Take the Zacks Rank, for example. You know it’s one of the most successful stock rating systems out there, but at any given time there are hundreds of stocks with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy).
You can’t buy them all.
That’s where the Zacks Style Scores come in. These indicators help to fine tune that long list of stocks to increase your odds of outperformance, and they’re split into Value, Growth and Momentum scores depending on what kind of investor you are.
But if you want everything in one place, then there’s the VGM, which combines all three styles into one score.
It’s also the focus of the Top VGM Buys screen.
In addition to the Zacks Rank and VGM, the screen also looks for stocks in the top 50% of the Zacks Industry Rank as well as several other criteria.
Below are three names that passed this rigorous test.
Mosaic (MOS - Free Report)
The past several years have been pretty rough for the agriculture industry and farmers. Fortunately, this is a resilient and sturdy group that doesn’t shirk in the face of hardships… and it looks like their patience is finally paying off. Wall Street is beginning to turn its attention back to the space amid rising crop production and commodity prices.
It goes without saying (though we’re going to say it) that the companies catering to this space need to be as resilient and sturdy as their customers in order to take advantage of a more virtuous cycle.
Mosaic (MOS - Free Report) is one such company that has been through some lean times lately, but seems ready to sprout. Take a look at the graph below. After several quarters of steep losses, it has beaten the Zacks Consensus Estimate the last couple of times. And shares are up more than 50% since its last quarterly report in early November.
By the way, that third-quarter release included earnings per share of 23 cents, which topped our expectations by nearly 4.6%. Net sales of $2.38 billion were down year-over-year and missed the forecast, but it showed a continuation of strengthening fundamental trends that began in 2020 and will continue into 2021. There’s a lot of ground to recover as fertilizer inventories remain below average in many of the largest global markets.
In a nutshell, MOS is all about fertilizer. More specifically, it’s a leading producer and marketer of concentrated phosphate and potash crop nutrients. In addition to an improving environment, the company is also benefiting from its cost-reduction initiatives, which includes streamlining, centralizing its mining operations and automation.
Analysts are taking notice of MOS and its space again, which has led to some big upward revisions. The Zacks Consensus Estimate for 2020 has jumped 31.7% in 60 days to 54 cents. But 2021 is shaping up to be even better.
The Zacks Consensus Estimate is currently calling for $1.48 this year, which would mark a year-over-year surge of more than 170%. Earnings estimates for 2021 are up about 41% in two months.
MOS will report again on February 17.
Ally Financial (ALLY - Free Report)
Though still one of the country’s leading automobile finance companies, Ally Financial (ALLY - Free Report) has dreams that go well beyond its original incarnation as General Motors Acceptance Corp. The company made diversification a major goal for its future, which helped it to weather this pandemic while positioning it for further prosperity down the road.
ALLY is now a diversified financial services company. Automobile financing still makes up the bulk of its business (68.7% of total net revenues in 2019), but it has three other business segments: insurance (20.8%), corporate finance (4.4%) and mortgage finance (3%).
As part of the financial – consumer loans space, ALLY is in the Top 23% of the Zacks Industry Rank.
Earnings estimates have really taken off over the past week after the company posted solid fourth-quarter results.
ALLY reported earnings per share of $1.60, which was more than 68% better than last year and 52.4% on top of the Zacks Consensus Estimate at $1.05. That makes three straight quarters of positive surprises.
Total net revenues of $1.98 billion was 20.6% better than the year-ago quarter and more than 19% over the Zacks Consensus Estimate. Lower provisions and a healthy balance sheet helped the quarter’s strong results.
Analysts must have really liked what they saw, because earnings estimates hit another gear in the past week. The Zacks Consensus Estimate for this year is up 9.5% in seven days to $4.40, while expectations for next year climbed 7.8% to $5.42. In other words, analysts are expecting 23.2% earnings growth in 2022 over 2021.
But this is really nothing new. Estimates have been on the rise for weeks. Analysts revised their 2021 estimates by nearly 20% over the past two months, while 2022 expectations have advanced about 15.3% in that time.
D.R. Horton (DHI - Free Report)
If you had invested in the home builders a few months ago, you’d be making money already! But that’s all right. It’s probably not too late, as the fiscal first quarter report of D.R. Horton (DHI - Free Report) showed that housing market conditions continue to be strong.
And don’t forget that the building products – home builders space is in the Top 13% of the Zacks Industry Rank.
DHI is one of the leading national homebuilders, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets. It has operations in 90 markets across 29 states and closed more than 71,100 homes in 2020.
And even more is expected this year. In its fiscal first quarter report, the company expects to close 80K to 82K homes in 2021 and generate consolidated revenues of between $25.2 billion and $25.8 billion.
Analysts liked what they saw in the quarter, which kept earnings estimates moving higher for DHI. The Zacks Consensus Estimate for this year (ending September 2021) is up 5.5% in the past 60 days to $8.36. Most of that advance has come in just the past seven days.
The Zacks Consensus Estimate for next year (ending September 2022) is up 5.3% in two months to $9.51, suggesting year-over-year improvement of 13.8%.
By the way, the company’s fiscal first quarter report from earlier this month included its seventh straight positive surprise. Earnings per share of $2.14 beat our expectations by more than 24% and brought the four-quarter average surprise to more than 25%. Total revenues of $5.9 billion were 6% better than the Zacks Consensus Estimate and a more than 47% improvement on last year.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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 >>