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Bull of the Day: BHP Group (BBL)

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The market is rocking and rolling, pushing up to new all-time highs. It certainly is a time to rejoice as an investor. It may feel like the perfect time to unleash that old “dartboard approach” to investing. The problem with that is, eventually, the cream in the market will rise to the top while the rest of the market will settle lower. One way to find that cream at the top is by leaning on the time-tested strength of the Zacks Rank. I used the Zacks Rank to come up with today’s Bull of the Day. I’m talking about Zacks Rank #1 (Strong Buy) BHP Group (BBL - Free Report) .

BHP Group discovers, acquires, develops, and markets natural resources worldwide. The company engages in the exploration, development, and production of oil and gas properties; and mining of copper, silver, lead, zinc, molybdenum, uranium, gold, and iron ores, as well as metallurgical and energy coal. It also engages in the mining, smelting, and refining of nickel; provision of freight, finance, and administrative services, as well as trading, marketing, and support services; and potash development activities.

The reason for the favorable Zacks Rank lies in the series of earnings estimate revisions to the upside recently. Over the last thirty days, two analysts have increased their earnings estimates for the current year, while three analysts have increased their estimates over the last sixty days for next year. The bullish sentiment pushed up the Zacks Consensus Estimate for the current year from $3.86 to $4.56. Next year’s number has popped from $3.52 to $4.23.

Stock prices have a tendency to move along with earnings. Stocks with favorable Zacks Ranks have the strongest earnings trends. One way to visualize this is by looking at our Price, Consensus and EPS Surprise charts. Estimates for each year are plotted, along with the stock price. Here, the Price, Consensus and EPS Surprise chart for BHP Group shows earnings estimates bottoming out along with the stock price in early 2016. From there, consistent earnings moves to the upside have helped underpin a long-term rally.

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