Just like five o’clock, there’s always a bull market somewhere. Even at a time when a pandemic has shut down most of the economy, companies are showing momentum in both price and earnings estimate revisions.
Our Price & Earnings Estimate Momentum screen finds these ‘against-the-grain’ companies that are right around their 52-week highs despite all the challenges out there. Usually, this screen has a good amount of names, but these days just a few have managed to pass the criteria.
Take a look at three names that are prospering in these tough times below:
The Tiger King channel, also known as Netflix (NFLX), added nearly 15.8 million new subscribers in the first quarter. That’s what happens when the government is telling you to stay home and wait out this coronavirus. What else are you going to do? Read?
The company itself knows that this more than 64% jump in subs is inflated due to the times, and expects a rise of ‘only’ about 7.5 million in the second quarter. Nevertheless, NFLX now has nearly 183 million customers around the world, which is a nice statement at a time when the streaming wars are really heating up.
This is truly a coronavirus play and remains the one to beat in this suddenly competitive space.
NFLX is a main reason why tech has been outperforming of late. The stock is up approximately 31.9% this year, which comes to more than $100. Earnings of $1.57 in the first quarter actually missed the Zacks Consensus Estimate but improved by more than 106% from last year. However, revenue of $5.77 billion beat our expectations and improved 27.6% from last year.
Earnings estimates for this year have advanced to $6.02 and are expected to jump to $8.49 next year. That’s a growth of 41%.
General Mills GIS
We all need some comfort food from time to time while we’re shut away from the rest of the world. Sometimes that means a huge burger or cheesiest pizza. And then for others, comfort food means big old bowl of Cocoa Puffs… or Lucky Charms… or Cheerios.
Those brands all belong to General Mills (GIS), but the company is much more than just a cereal maker. It’s a packaged food giant that sells all types of well-known products, which means it’s in demand during this stay-at-home economy.
While most companies are DEEP in the hole for 2020, shares of GIS are up more than 15%.
In its third-quarter report from last month, the company posted a 10th straight positive surprise as earnings per share of 77 cents beat our expectations by about 2.7%. GIS also raised its outlook for the full year, helping the Zacks Consensus Estimate rise to $3.48 from $3.39 over the past two months.
The Clorox Company CLX
In the “duh” category, The Clorox Company (CLX) has no fear of the coronavirus. This company’s disinfectant products are the average person’s front-line defense against germs.
Even now, weeks after the virus first hit the headlines, try going into the grocery store for CLX’s disinfectant wipes. Maybe you can get some through Amazon if you’re lucky enough to find one of their delivery windows. This stuff is in demand right now… and probably will be for a while because this coronavirus has also infected a generation or two with germaphobia.
CLX stock is up more than 27% this year, including nearly 14% since the March 23 low.
But CLX is way more than just a germ fighter. It’s a consumer products giant with brands like Kingsford charcoal, Brita water filters, Fresh Step kitty litter, Glad trash bags and even Hidden Valley ranch dressing.
The stock has beaten earnings expectations in 12 of the past 13 quarters. Most recently (its Q2), CLX reported earnings per share of $1.46, which beat the Zacks Consensus Estimate by more than 11%. Revenue of $1.45 billion also exceeded our expectations. CLX will report again on May 1.
Earnings estimates for this fiscal year (ending in June) have advanced 5% in the past two months to $6.50, while next year (ending June 2021) is up nearly 5.6% in that time to $6.82.
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