We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Coconut water has been all the rage over the past several years, but the fact is this nutritious beverage has been around for centuries. Coconut water is a clear liquid found inside young coconuts that is packed with flavor and electrolytes. Naturally loaded with potassium, magnesium, and phosphorus, you may have noticed some coconut water appears with a pink hue, which is due to higher levels of polyphenols and exposure to sunlight over time.
With coconut water sales exploding domestically as well as internationally, how we can take advantage of the theme from a market perspective?
Harnessing the Power of the Zacks Rank
Let’s put the power of the Zacks Rank system to work to help us uncover a leading stock in this area. Our proprietary Zacks Rank system analyzes earnings estimate revisions. These earnings revisions have been shown to be the most powerful force impacting stock prices. Stocks with rising estimates have significantly outperformed the S&P 500. Over time, your most profitable stocks will be those with upward earnings estimate revisions in the industries enjoying the same.
One such company is a Zacks Rank #2 (Buy) stock that is witnessing positive earnings estimate revisions. This beverage company has met or exceeded earnings estimates in three of the last four quarters, with an average earnings surprise of 21.67% over that timeframe.
Analysts following the company are in agreement and have raised full-year earnings estimates by 28% over the past 60 days. The 2023 Zacks Consensus EPS Estimate now stands at $0.64/share, reflecting a staggering growth rate of 178.26% relative to last year.
Image Source: Zacks Investment Research
Industry Group Association
Another step to include in our process is to identify leading industry groups. Focusing on stocks within the top-performing industries provides a constant tailwind to our investing results. Including this step in our selection process also allows us to narrow down the investment universe and select stocks with the best profit potential.
The length of time that industry groups remain at the top can vary from a few months to many years – it ultimately depends on the market environment. The top-performing industry groups are constantly changing, so investors would be wise to stay abreast of these groups. The stocks within these industries will typically be leading the market, and it is these stocks that we want to target for additions to our portfolio.
Today’s spotlight is on the Zacks Beverages – Soft Drinks industry group, which currently ranks in the top 19% out of approximately 250 industries. Because it is ranked in the top half of all industry groups, we expect this group to outperform the market over the next 3 to 6 months.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Vita Coco: The Secular Growth Story
The Zacks Rank #2 (Buy) stock that is part of this leading industry is Vita Coco (COCO - Free Report) , a leading producer of coconut water. COCO develops, markets, and distributes coconut water products under the Vita Coco brand in Canada, Europe, the Middle East, the Asia Pacific region, as well as the U.S. – where COCO boasts more than a 50% market share.
In addition to coconut water, Vita Coco offers coconut oil and coconut milk; sparkling and purified water; plant-based energy drinks; protein-infused fitness drinks; and a hydration drink mix in powdered form. COCO distributes its products through club, food, retail, drug, mass convenience, e-commerce, and foodservice channels.
The global coconut water market is projected to be worth nearly $12 billion by 2027, growing at a CAGR of 15.3% over the next four years. As a consumer shift to healthier products continues, COCO is well-positioned to take advantage. Vita Coco has also secured partnerships with major beverage companies such as PepsiCo, which distributes COCO products in various markets.
In terms of stock price performance, shares brokeout of a long-term base earlier this year and have already advanced nearly 60% year-to-date.
Image Source: StockCharts
Keep an eye on COCO as the company is primed to continue its dominance in the coconut water craze.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Coconut Water Craze: Beverage Company Breaks Out
Coconut water has been all the rage over the past several years, but the fact is this nutritious beverage has been around for centuries. Coconut water is a clear liquid found inside young coconuts that is packed with flavor and electrolytes. Naturally loaded with potassium, magnesium, and phosphorus, you may have noticed some coconut water appears with a pink hue, which is due to higher levels of polyphenols and exposure to sunlight over time.
With coconut water sales exploding domestically as well as internationally, how we can take advantage of the theme from a market perspective?
Harnessing the Power of the Zacks Rank
Let’s put the power of the Zacks Rank system to work to help us uncover a leading stock in this area. Our proprietary Zacks Rank system analyzes earnings estimate revisions. These earnings revisions have been shown to be the most powerful force impacting stock prices. Stocks with rising estimates have significantly outperformed the S&P 500. Over time, your most profitable stocks will be those with upward earnings estimate revisions in the industries enjoying the same.
One such company is a Zacks Rank #2 (Buy) stock that is witnessing positive earnings estimate revisions. This beverage company has met or exceeded earnings estimates in three of the last four quarters, with an average earnings surprise of 21.67% over that timeframe.
Analysts following the company are in agreement and have raised full-year earnings estimates by 28% over the past 60 days. The 2023 Zacks Consensus EPS Estimate now stands at $0.64/share, reflecting a staggering growth rate of 178.26% relative to last year.
Image Source: Zacks Investment Research
Industry Group Association
Another step to include in our process is to identify leading industry groups. Focusing on stocks within the top-performing industries provides a constant tailwind to our investing results. Including this step in our selection process also allows us to narrow down the investment universe and select stocks with the best profit potential.
The length of time that industry groups remain at the top can vary from a few months to many years – it ultimately depends on the market environment. The top-performing industry groups are constantly changing, so investors would be wise to stay abreast of these groups. The stocks within these industries will typically be leading the market, and it is these stocks that we want to target for additions to our portfolio.
Today’s spotlight is on the Zacks Beverages – Soft Drinks industry group, which currently ranks in the top 19% out of approximately 250 industries. Because it is ranked in the top half of all industry groups, we expect this group to outperform the market over the next 3 to 6 months.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Vita Coco: The Secular Growth Story
The Zacks Rank #2 (Buy) stock that is part of this leading industry is Vita Coco (COCO - Free Report) , a leading producer of coconut water. COCO develops, markets, and distributes coconut water products under the Vita Coco brand in Canada, Europe, the Middle East, the Asia Pacific region, as well as the U.S. – where COCO boasts more than a 50% market share.
In addition to coconut water, Vita Coco offers coconut oil and coconut milk; sparkling and purified water; plant-based energy drinks; protein-infused fitness drinks; and a hydration drink mix in powdered form. COCO distributes its products through club, food, retail, drug, mass convenience, e-commerce, and foodservice channels.
The global coconut water market is projected to be worth nearly $12 billion by 2027, growing at a CAGR of 15.3% over the next four years. As a consumer shift to healthier products continues, COCO is well-positioned to take advantage. Vita Coco has also secured partnerships with major beverage companies such as PepsiCo, which distributes COCO products in various markets.
In terms of stock price performance, shares brokeout of a long-term base earlier this year and have already advanced nearly 60% year-to-date.
Image Source: StockCharts
Keep an eye on COCO as the company is primed to continue its dominance in the coconut water craze.