For Immediate Release
Chicago, IL – September 16, 2020 – Zacks Equity Research Shares of Intuit Inc. (INTU - Free Report) as the Bull of the Day, Gildan Activewear Inc. (GIL - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Barrick Gold Corporation (GOLD - Free Report) , QIAGEN N.V. (QGEN - Free Report) and AngloGold Ashanti Limited (AU - Free Report) .
Here is a synopsis of all five stocks:
It is no secret that the stock market has been led by tech stocks. The NASDAQ Composite continues to push higher, fueled by popular stocks like Amazon and Tesla. Yesterday’s action followed the familiar pattern of large caps moving sideways while tech stocks broke higher. It can be easy to fall into the trap of going out there and buying any four-letter ticker you see. But eventually, it is the stocks with the strongest earnings trends that will continue to press higher.
One way to find these stocks is to lean on the time-tested strength of the Zacks Rank. Today’s Bull of the Day is one such stock. I’m talking about Zacks Rank #2 (Buy) Intuit. Intuit Inc. provides financial management and compliance products and services for consumers, small businesses, self-employed, and accounting professionals in the United States, Canada, and internationally. The company operates in three segments: Small Business & Self-Employed, Consumer, and Strategic Partner.
The reason for the favorable Zacks Rank is the slew of earnings estimates coming from analysts. Over the last sixty days, nine analysts have increased their estimates for the current year while three have done so for next year. The bullish sentiment has pushed up the Zacks Consensus Estimate from $8.10 to $8.55 for the current year while next year’s number is up from $9.30 to $9.70.
Intuit is in the earliest stage of its move off the 50-day. The business and financial software company was hot coming off its last earnings report. The stock rallied enough to nearly top $360. From there, the selling has it back within a few bucks of its 50-day moving average in the $310s. The timing could be right here for this Zacks Rank #1 (Strong Buy).
Stocks which have the strongest earnings trends tend to outperform the broad market over time. It makes sense, as investors should be drawn to the most profitable companies. When the broad market is rallying up near all-time highs, it is easy to feel like every stock is a profitable company. It is not until the going gets rough, and the market reels in a bit, that the cream rises to the top and weak hands fold up.
One way to make sure your stocks have strong earnings trends is to look up their Zacks Rank. Stocks which are Zacks Rank #1 (Strong Buy) have the best earnings trends while those which are Zacks Rank #5 (Strong Sell) have the weakest trends.
Today’s Bear of the Day is a stock with a weaker earnings trend. It’s Zacks Rank #5 (Strong Sell) Gildan. Gildan Activewear Inc. manufactures and sells a range of apparel products in North America, Europe, the Asia-Pacific, and Latin America. The company manufactures and markets activewear products, including T-shirts, fleece tops and bottoms, and sport shirts under Gildan, Gildan Performance, Gildan Platinum, Gildan Hammer, Comfort Colors, American Apparel, Anvil by Gildan, Alstyle, Prim + Preux, and Gold Toe brands.
The reason for the negative Zacks Rank comes from earnings estimates. Analysts on Wall Street have been cutting their earnings estimates for the company. The biggest hit is to the current year Zacks Consensus Estimates. Over the last 60 days, five analysts have cut their estimates. That negativity has dropped the Zacks Consensus Estimate from 23 cents to a contraction of 75 cents. That’s down from EPS of $1.66 in the previous year.
One feather in the cap of the bulls here is that earnings growth is supposed to return next year. Next year’s Zacks Consensus Estimate is slated to come in at $1.31. That would represent growth of 273% for next year. That’s on revenue growth of 36.2% next year.
3 Low-Beta Stocks to Combat a Choppy Market
Although a rebound in technology stocks is aiding major indexes, the market will continue to be volatile till the world gets an effective coronavirus vaccine. A portfolio of low-beta securities can help beat the choppy market conditions since such stocks not only deliver healthy returns but also provide a shield against market volatility.
Meaning of Beta
Beta measures the volatility or risk of a particular asset in comparison to the market. In other words, beta measures the extent of a security’s price movement relative to the market. In this article, we are considering the S&P 500 as the market.
If a stock has a beta of 1, then the price of the stock will move with the market. So, the stock is more volatile than the market if its beta is more than 1. In the same way, the stock is not as volatile as the market if its beta is less than 1.
For example, if the market offers a return of 20%, a stock with beta of 3 will return 60%, which is overwhelming. Similarly, when the market slips 20%, the stock will sink 60%, which is devastating.
We have taken beta between 0 and 0.6 as our prime criterion for screening stocks that are less volatile than the market. However, this should not be the only factor to be considered while selecting a winning strategy. We need to take into account other parameters as well that can add value to the portfolio.
Percentage Change in Price in the Last 4 Weeks greater than zero: This ensures that the stocks saw positive price movement over the last month.
Average 20 Day Volume greater than 50,000: A substantial trading volume ensures that the stocks are easily tradable.
Price greater than or equal to $5: They must all be trading at a minimum of $5 or higher.
Zacks Rank equal to 1: Zacks Rank #1 (Strong Buy) stocks indicate that they will significantly outperform the broader U.S. equity market over the next one to three months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are the three stocks that qualified the screening:
Barrick Gold is among the leading gold mining players in the world. The stock is likely to see earnings growth of 80.4% and 26.1% in 2020 and 2021, respectively.
QIAGEN is under the limelight on its progress in antibody and antigen tests for SARS-CoV-2. Importantly, in less than 15 minutes, the company’s rapid portable test, likely to be launched in the December quarter of 2020, will be able to detect SARS-CoV-2 antigens in persons with active infections. In 2020 and 2021, the stock is likely to see earnings growth of 45.5% and 12.9%, respectively.
AngloGold Ashanti is a leading gold mining player. In 2020 and 2021, the company, with headquarters in Johannesburg, South Africa, is expected to see earnings growth of 124.2% and 54.7%, respectively.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.