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The Market Favors the Cool, Calm and Collected

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Today's market performance along with the rally the market exhibited during the last 90 minutes of the day on Friday should remind everyone as to what I talked about mid day on Friday: "have an investing plan and a solid source for investment ideas".  One of the key drivers to success with your portfolio is to be IN the market during all periods and that means you have to ultimately deal with the down days, weeks and sometimes even months.  But that's FINE because if your plan includes dedicated weekly or monthly purchases of the stock market, then you'll be lowering the cost basis of your portfolio as it reacts to the invariable market down periods.  Remember that missing just the ten best days of the market performance over the last 40 years (data thru 2015), your annualized returns are over a third less, 9.8% vs 6.0%, than had you stayed in the market without interruption.  Let me be clear, that's the 10 best days over a 40 year period, NOT the best 10 days of every year over the last 40!

This is where Zack's provides the everyday investor with the tools to build a long lasting, stable portfolio that can withstand the down periods that every major market cycle goes through.  We will use Zack's Rank's #1 and #2 stocks to look at a few stocks today that make sense to start a portfolio or add to existing positions. The best part of this is that while everyone around you will be talking about market news items that they know very little about: leveraged short volatility ETN's, wage gain inflation, risk parity program selling, etc., you'll be comforted in knowing that your portfolio is comprised of highly ranked Zack's stocks!  Here we go.

((EV - Free Report) $54: Eaton Vance is a financial services company primarily involved in Investment Management.  Currently a Zack's #1 rank stock, Eaton Vance's dividend yields a healthy 2.33%, estimate revisions of about 10% higher for the current FY, trades at a slight discount to the the market and has seen a slight uptick in margins.  Eaton Vance manages over $400b with offices spread throughout North America, Asia, Europe and Africa.  The stock is off about 10% from its recent highs but with a solid tape and a longer term take on the name, investors should be rewarded owning EV.

Eaton Vance Corporation Price and Consensus

Eaton Vance Corporation Price and Consensus | Eaton Vance Corporation Quote

(FII - Free Report) $32.50: Federated Investors Inc. is another Zack's #1 ranked stock in the Investment Management arena.  Earning estimates are trending very nicely to the tune of +24.5%, the stock sports a healthy 3.14% dividend yield and Federated has been expanding its money market funds business by about $9b, which should provide various new fund offerings for their global clients.  Federated's stock has outperformed the industry average by a full 10% points over the past couple of quarters and its ROE is nearly 2.5x better than its peers.  The stock has sold off about the same 10% from its recent highs to around $32.00, but being bought here for moderate to longer duration portfolios could work very nicely.

Federated Investors, Inc. Price and Consensus

Federated Investors, Inc. Price and Consensus | Federated Investors, Inc. Quote

(GWW - Free Report) $270: W.W Grainger is an Industrial Services super star that continues to hit on all cylinders.  A Zacks's Rank #1 stock, Grainger delivers to the bottom line and to its very happy shareholders.  Estimate revisions are trending higher for the current FY to the tune of 24.8% and of the 13 analyst revisions over the last 60 days, all 13 are higher.  The stock pays a $5.12 yearly dividend yielding about 1.92%, the company will continue to benefit from lower corporate taxes, pricing initiatives, further digital strategies and improving the fortunes of its Canadian business.  The stock currently trades about 16% above the midpoint of its 52 week range of $155-298.  Although I sincerely believe GWW is a tremendous add to any portfolio and will get better as the plans for infrastructure evolve further, for patient investors, I would buy a piece here near $270 and then wait for one of the market pullbacks to fully load the position near $225-240.

W.W. Grainger, Inc. Price and Consensus

W.W. Grainger, Inc. Price and Consensus | W.W. Grainger, Inc. Quote

Investing is not for the faint of heart at times, we have all experienced that over the last week or so. The investor with a plan and a quality tool set for stock selection like Zack's will outperform the misguided crowds at the end of the day.  Be prepared for the market set backs, be diversified and use Zack's Ranks for investing on a regular, periodic basis.

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In-Depth Zacks Research for the Tickers Above


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W.W. Grainger, Inc. (GWW) - free report >>

Federated Investors, Inc. (FII) - free report >>

Eaton Vance Corporation (EV) - free report >>

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