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Resuming the Bull Market: 3 Top Ranked Stocks Investors Can Buy Now
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At yesterday’s FOMC meeting, Fed Chair Jerome Powell announced that for the second meeting in a row, interest rate hikes would remain paused. The market has taken this and the press conference that followed as a bullish signal, and it seems stocks have been given the green light to resume the bull run.
A number of stocks sold down to depressed levels over the last few weeks, which has presented discerning investors with a buying opportunity.
In this article I will cover three stocks with top Zacks Ranks that have compelling business models, and strong sales growth.
One stock has sold off considerably this year providing an exciting value investment, while another trendsetting fashion brand has outperformed the market by 40%. The last one is an exciting cloud-based technology stock that has languished all year, but is growing sales and earnings very rapidly, nonetheless.
Image Source: Zacks Investment Research
Trupanion
Trupanion(TRUP - Free Report) is a pet insurance company that provides coverage for veterinary expenses incurred by pet owners. Founded in 2000, Trupanion offers customizable insurance plans for cats and dogs, helping pet owners manage unexpected medical costs and providing peace of mind. Their policies typically cover a wide range of veterinary services, including surgeries, medications, diagnostic tests, and more. Trupanion is known for its straightforward approach to pet insurance, offering a single comprehensive plan with no payout limits and a focus on simplifying the claims process for pet owners.
Insurance businesses enjoy very strong unit economics as their products have no marginal cost of production. But even more significant for TRUP is the fact that pet ownership is one of the fastest growing economic trends in the western world.
Today, in the US there are more pet owners than parents! Furthermore, Trupanion is the leading pet insurance company in the world, with a 30% market share.
Image Source: PetKeen
In addition to a Zacks Rank #1 (Strong Buy) rating, Trupanion has formed a compelling technical chart pattern. After selling down -50% YTD to levels not seen since 2017, TRUP stock looks to have formed a double bottom pattern.
I think so long as the stock can hold up above the $20 level, it is possible that it has found a near term low. It should be noted that TRUP reports earnings today, Thursday November 2, after the market closes.
Image Source: TradingView
Trupanion is also now trading at the lowest relative valuation in the company’s history. It is trading at a one year forward sales multiple of 0.78x, which is below the industry average of 1.9x, and below its median of 2.6x.
Image Source: Zacks Investment Research
Datadog
Datadog(DDOG - Free Report) is a prominent cloud-based monitoring and analytics platform designed for modern technology stacks. Founded in 2010, Datadog offers comprehensive observability and monitoring solutions for applications, infrastructure, and cloud environments. Its platform allows organizations to collect and analyze data from various sources, providing real-time insights into the performance and health of their IT systems.
Reflecting strong earnings trend revisions, Datadog has a Zacks Rank #1 (Strong Buy) rating. Additionally, sales and earnings forecasts this and next year expect huge growth.
This year and next year’s sales are expected to climb 23% and 21% YoY respectively, while earnings for the same period are projected to climb 35% and 14.5% YoY.
Image Source: Zacks Investment Research
Today, Datadog is trading near its lowest valuation. Its forward sales multiple is currently 12.7x, which is above the industry average and below its four-year median of 29.2x. Admittedly, this is a very premium valuation, but with EPS forecast to grow by 22% annually over the next 3-5 years, investors are willing to pay up for the stock.
Image Source: Zacks Investment Research
Deckers Outdoor
Deckers Outdoor(DECK - Free Report) , is an American footwear and apparel company. Established in 1973, the company is known for its diverse portfolio of brands, with the most notable being UGG, Teva, Hoka One, and Sanuk. UGG, in particular, is famous for its sheepskin boots and has gained international recognition. Deckers focuses on outdoor and casual lifestyle footwear and accessories, catering to a broad consumer base.
Deckers Outdoor has steadily grown its EPS from under $10 per share in 2020 to an expected $23 per share in FY23. This trend of growing earnings hasn’t gone over analysts' heads as they have began to upgrade earnings estimates for DECK, giving it a Zacks Rank #1 (Strong Buy) rating.
Image Source: Zacks Investment Research
The apparel business is a notoriously difficult sector to find long-term winners. Because of the constantly shifting consumer preferences companies and stocks in the fashion industry come and go, with very few putting up strong long-term returns.
But Deckers Outdoor stands out from the rest. Over the last ten years DECK stock has compounded at an incredible 22% annually, far better than the broad market, and absolutely trouncing the industry, which is down -50% over that period.
Image Source: Zacks Investment Research
Bottom Line
The Zacks Rank is an extremely effective way to filter for stocks which have near-term bullish tailwinds, which are powered by analysts upgrading earnings estimates. With the Zacks Rank you will never have a shortage of stocks to pick from.
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Resuming the Bull Market: 3 Top Ranked Stocks Investors Can Buy Now
At yesterday’s FOMC meeting, Fed Chair Jerome Powell announced that for the second meeting in a row, interest rate hikes would remain paused. The market has taken this and the press conference that followed as a bullish signal, and it seems stocks have been given the green light to resume the bull run.
A number of stocks sold down to depressed levels over the last few weeks, which has presented discerning investors with a buying opportunity.
In this article I will cover three stocks with top Zacks Ranks that have compelling business models, and strong sales growth.
One stock has sold off considerably this year providing an exciting value investment, while another trendsetting fashion brand has outperformed the market by 40%. The last one is an exciting cloud-based technology stock that has languished all year, but is growing sales and earnings very rapidly, nonetheless.
Image Source: Zacks Investment Research
Trupanion
Trupanion (TRUP - Free Report) is a pet insurance company that provides coverage for veterinary expenses incurred by pet owners. Founded in 2000, Trupanion offers customizable insurance plans for cats and dogs, helping pet owners manage unexpected medical costs and providing peace of mind. Their policies typically cover a wide range of veterinary services, including surgeries, medications, diagnostic tests, and more. Trupanion is known for its straightforward approach to pet insurance, offering a single comprehensive plan with no payout limits and a focus on simplifying the claims process for pet owners.
Insurance businesses enjoy very strong unit economics as their products have no marginal cost of production. But even more significant for TRUP is the fact that pet ownership is one of the fastest growing economic trends in the western world.
Today, in the US there are more pet owners than parents! Furthermore, Trupanion is the leading pet insurance company in the world, with a 30% market share.
Image Source: PetKeen
In addition to a Zacks Rank #1 (Strong Buy) rating, Trupanion has formed a compelling technical chart pattern. After selling down -50% YTD to levels not seen since 2017, TRUP stock looks to have formed a double bottom pattern.
I think so long as the stock can hold up above the $20 level, it is possible that it has found a near term low. It should be noted that TRUP reports earnings today, Thursday November 2, after the market closes.
Image Source: TradingView
Trupanion is also now trading at the lowest relative valuation in the company’s history. It is trading at a one year forward sales multiple of 0.78x, which is below the industry average of 1.9x, and below its median of 2.6x.
Image Source: Zacks Investment Research
Datadog
Datadog (DDOG - Free Report) is a prominent cloud-based monitoring and analytics platform designed for modern technology stacks. Founded in 2010, Datadog offers comprehensive observability and monitoring solutions for applications, infrastructure, and cloud environments. Its platform allows organizations to collect and analyze data from various sources, providing real-time insights into the performance and health of their IT systems.
Reflecting strong earnings trend revisions, Datadog has a Zacks Rank #1 (Strong Buy) rating. Additionally, sales and earnings forecasts this and next year expect huge growth.
This year and next year’s sales are expected to climb 23% and 21% YoY respectively, while earnings for the same period are projected to climb 35% and 14.5% YoY.
Image Source: Zacks Investment Research
Today, Datadog is trading near its lowest valuation. Its forward sales multiple is currently 12.7x, which is above the industry average and below its four-year median of 29.2x. Admittedly, this is a very premium valuation, but with EPS forecast to grow by 22% annually over the next 3-5 years, investors are willing to pay up for the stock.
Image Source: Zacks Investment Research
Deckers Outdoor
Deckers Outdoor (DECK - Free Report) , is an American footwear and apparel company. Established in 1973, the company is known for its diverse portfolio of brands, with the most notable being UGG, Teva, Hoka One, and Sanuk. UGG, in particular, is famous for its sheepskin boots and has gained international recognition. Deckers focuses on outdoor and casual lifestyle footwear and accessories, catering to a broad consumer base.
Deckers Outdoor has steadily grown its EPS from under $10 per share in 2020 to an expected $23 per share in FY23. This trend of growing earnings hasn’t gone over analysts' heads as they have began to upgrade earnings estimates for DECK, giving it a Zacks Rank #1 (Strong Buy) rating.
Image Source: Zacks Investment Research
The apparel business is a notoriously difficult sector to find long-term winners. Because of the constantly shifting consumer preferences companies and stocks in the fashion industry come and go, with very few putting up strong long-term returns.
But Deckers Outdoor stands out from the rest. Over the last ten years DECK stock has compounded at an incredible 22% annually, far better than the broad market, and absolutely trouncing the industry, which is down -50% over that period.
Image Source: Zacks Investment Research
Bottom Line
The Zacks Rank is an extremely effective way to filter for stocks which have near-term bullish tailwinds, which are powered by analysts upgrading earnings estimates. With the Zacks Rank you will never have a shortage of stocks to pick from.