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Corsair Gaming, Air Products and Chemicals, Community Health Systems, Lincoln Educational Services and Build-A-Bear Workshop highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – January 5, 2021 – Zacks Equity Research Shares of Corsair Gaming, Inc. (CRSR - Free Report) as the Bull of the Day, Air Products and Chemicals, Inc. (APD - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Community Health Systems, Inc. (CYH - Free Report) , Lincoln Educational Services Corporation (LINC - Free Report) and Build-A-Bear Workshop, Inc. (BBW - Free Report) .

Here is a synopsis of all four stocks:

Bull of the Day:

Corsair Gaming is a Zacks Rank #1 (Strong Buy) and it is the Bull of the Day today. This stock is a play on the gaming sector and this stock has all the bases covered for that sector. There are hardware solutions, streaming solutions and even software. If the pandemic did anything, it made a lot of gamers a lot more committed to their chosen path and having the best equipment is viewed more as an investment than anything else. 

As the Bull of the Day, we take a look at the obvious reason to put a stock on your radar screen… then look at why it has become a Zacks Rank #1 (Strong Buy).  Let’s take at why this stock has reached the highest Zacks Rank.

Description

Corsair Gaming, Inc., together with its subsidiaries, designs, markets, and distributes gaming and streaming peripherals, components and systems in the Americas, Europe, the Middle East, and the Asia Pacific. The company offers gamer and creator peripherals, including gaming keyboards, mice, headsets, and controllers, as well as capture cards, studio accessories, and others. It also provides gaming components and systems comprising power supply units, cooling solutions, computer cases, and DRAM modules, as well as prebuilt and custom-built gaming PCs, and others; and PC gaming software comprising iCUE for gamers and Elgato's streaming suite for content creators.

The company sells its products through a network of distributors and retailers, including online retailers, as well as directly to consumers through its websites. Corsair Gaming, Inc. was founded in 1994 and is headquartered in Fremont, California.

Earnings History

I see only one quarterly report so far for CRSR and it was a solid beat. That is a very good sign as the first quarter of a public company is often a miss that carries a lot of previous baggage with it. Seeing that first beat is a good sign.

Earnings Estimates

I see the Zacks Consensus Estimate moving higher and higher for CRSR. The current quarter started out at 21 cents, but moved to 36 cents and then to 41 cents.

Next quarter has seen a nice move here as well, increasing 50% over the last 60 days.

The full year numbers are inching higher and they are what is really driving the Zacks Rank.

Valuation

I see a 25x forward PE, which is a little high, but when we see the 60% topline growth in the most recent quarter I am fine with that PE. I see a 8.6x price to book multiple, but that could move a lot higher as this is an asset slim business. This is a relatively new stock, so there isn’t a lot of data just yet… but from what I have seen of this stock I like it.

Bear of the Day:

Air Products Chemicals is a Zacks Rank #5 (Strong Sell) and it is the Bear of the Day today. That may make you think that it is a bad stock or something to remove from your radar screen, but to me it’s more of a chance to get to know a stock that you probably haven’t been looking at. Let’s face it, a $250+ stock that isn’t TSLA, NVDA or FB is probably under the radar for a lot of investors.

Description

Air Products & Chemicals, Inc. is a world-leading Industrial Gases company. The company's core industrial gases business provides atmospheric and process gases and related equipment to manufacturing markets, including refining and petrochemical, metals, electronics, and food and beverage. Air Products is also the world's leading supplier of liquefied natural gas process technology and equipment. The company is the world's largest supplier of hydrogen and has built leading positions in growth markets such as helium and natural gas liquefaction.

Earnings History

I always look here first. I want to see if management can guide Wall Street to the right level for quarterly expectations. I see three misses and one beat. The misses are small, all less than 2% and the beat was almost 3%.

I cannot say that they get an immediate pass because of the pandemic, but you have to cut them a little slack.

Estimates

I see estimates for this quarter moving higher, not lower.  Next quarter, however, is seeing estimates dropping.

The full year numbers have slipped, with the fiscal 2021 number going from $9.87 to $9.28 over the last 60 days.

The fiscal 2022 numbers are also lower by about the same amount… but there is still earnings growth.

Valuation

I see a 29x forward earnings multiple and that is a lot for a name that is seeing lower estimates and has a lot of earnings misses.  The growth is minimal at 1.6% in the most recent quarter but there is an expectation for 9% in this fiscal year. The price to book at almost 5x is a lot… but a margin in the 21% range is really attractive. 

I would like to see how the next quarter goes before making a decision on this one, but I am glad that I got a chance to take a look at APD.

Additional content:

3 Growth Stocks Under $10 to Start the New Year Right

Surprisingly, the year 2020 turned out to be a blissful one for investors, in spite of the economy encountering several bottlenecks. The U.S. equity market has had a bumpy ride with coronavirus snapping the Wall Street’s longest ever bull run in March, last year. But since then, the market has rebounded sharply. Markedly, the Dow Jones, the S&P 500 and the Nasdaq have appreciated 6%, 15.3% and 41.8%, respectively, in the past year.

It is quite apparent that the government’s timely intervention to provide financial support and fast tracking the development of COVID-19 vaccine helped offset much of the economic damage inflicted by the pandemic. Also, increasing risk appetite among investors helped propel major indices.

Well looking at the bullish run, market pundits are of the opinion that the indices may hit new highs in 2021 on the backdrop of still-low interest rate environment, swift vaccination and the new stimulus deal that aims to spark a lasting economic recovery. Notably, the Federal Reserve raised its 2021 real GDP forecast to 4.2% from 4%. The Jerome Powell-led Fed also now envisions unemployment rate to be 5% in 2021, down from the prior estimate of 5.5%.

Definitely challenges will be there, as strains of coronavirus pandemic will not fade out soon. But a constructive economic policy will play a vital role in steering the market in the new year. For now, the $900-billion stimulus package has given the economy a new lease of life. Economists cited that if business organizations and industries started to operate at an optimum level it will have a positive impact on revenues and profits.

Where to Invest?

Amid such a bullish backdrop, let’s focus on stocks that are trading under $10 a share. Well, low-priced stocks may not seem attractive to some because fewer people follow them and less has been said about them. But it is also true that these low-priced stocks could be greatly rewarding especially in terms of growth. Market professionals believe that a diligent selection of stocks based on fundamentals could help investors even double their investments.

That said we have highlighted three stocks on the basis of a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Growth Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.

3 Gems Trading Under $10

Community Health Systems, which owns, leases, and operates general acute care hospitals in the United States, is a solid bet. The company’s portfolio optimization strategy, margin improvement program and the targeted capital investments bode well. Management has also increased investments in high-return CapEx opportunities on both the inpatient and outpatient side of the business.

Notably, the stock carries a Zacks Rank #2 with a Growth Score of A. The company has a trailing four-quarter earnings surprise of 58.3%, on average. It has a long-term earnings growth rate of 10.3%. Moreover, the Zacks Consensus Estimate for the bottom line for 2021 has improved over the past 60 days. Remarkably, the stock has rallied 184.7% in the past year.

We suggest investing in Lincoln Educational Services Corp, which provides various career-oriented post-secondary education services to high school graduates and working adults in the United States. The company is benefiting from students' growing inclination toward acquiring new skills for in-demand essential careers. Markedly, the company has focused on improving cash flows and reducing debt.

The company has a trailing four-quarter earnings surprise of 113.6%, on average. The stock has a Zacks Rank #2 and a Growth Score of A. Moreover, the Zacks Consensus Estimate for the company’s 2021 earnings has been revised upward by 42.1% over the past 60 days. We also note that the company has a long-term earnings growth rate of 15%. Impressively, the stock has soared 143.5% in the past year.

You may invest in Build-A-Bear Workshop, which has a Zacks Rank #2 and a Growth Score of B. This specialty retailer of plush animals and related products remains focused on accelerating digital transformation, evolving retail store experience, and improving financial stability.

Markedly, the company has a trailing four-quarter earnings surprise of 98.4%, on average. Moreover, the Zacks Consensus Estimate for the company’s fiscal 2021 earnings has jumped 42.9% over the past 60 days. The stock has appreciated 32.2% in the past year.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?

These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>

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