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ACM Research as the Bull of the Day and Clorox have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – February 9, 2022 – Zacks Equity Research shares ACM Research (ACMR - Free Report) as the Bull of the Day and Clorox (CLX - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Chipotle Mexican Grill (CMG - Free Report) , Lyft (LYFT - Free Report) and Disney (DIS - Free Report) .
The time to reopen your portfolio to the recently suppressed Chinese stocks has come, with Biden's administration making clear efforts to resume its alliance with Beijing (after years of political turmoil). At the same time, China's overdue economic recovery commences as its central bank goes against the global inflation grain, lowering its benchmark rates to further promote this economic expansion.
China's growth-focused economy is putting everything they have into building out its semiconductor capabilities with an unbelievable 33.3% spike in chip production in 2021 despite some self-inflicted economic headwinds.
The ripping rally in US public equities has been decelerating over the past couple of months, following an over 100% bull run in the S&P 500 from the pandemic lows in March 2020 (40% above pre-pandemic high), and investors are beginning to look abroad for higher return opportunities.
The opportunity in China's chip segment is undeniable, with analysts projecting the nation will generate a sizable 15% CAGR over the next 5 years in its nascent semiconductor market. I've got an undiscovered Chinese chip player for you with near-term return potential that you don't want to miss out on.
ACM Research is a niche under-the-radar small-cap semiconductor player with an ideal concentrated exposure to Asia, enabling it to take advantage of this project shift in international equity returns while riding the endless wave of chip-focused demands. ACMR provides substantial upside potential at the stock's currently overlooked small-cap valuation, with its rapidly accelerating chipmaking capacity and strategic Chinese exposure being the primary buy catalyst.
ACM Research is a global leader in semiconductor equipment. As chip manufacturers in Asia begin ramping up production, ACM's best-in-class chipmaking equipment is poised to take flight following a year and a half of sideways trading action.
Chip demands far surpassing current production capacities entering the digital renaissance of the 4th Industrial Revolution, positioning this business to explode as the Roaring 20s recommence.
China Risk's May Be US
Chinese stocks have been hammered for nearly a year now, as President Xi and his increasingly autocratic communist administration crackdown on the swelling wealth in its booming tech sector. Xi's fear of losing control of "his" nation to a wealthy group of elites is reminiscent of Mao Zedong's totalitarian regime.
This paranoid egotistical positioning has led to a tidal wave of new tech-focused regulations under the guise of elevating "equality" and improved "productivity." These have capitulated the value of this nation's most prominent innovators by a meaningful amount.
Those stocks that had been at the center of these regulatory headwinds have seen their share values significantly deteriorate, presenting some superior long-term prospects as the global economy reemerges from the pandemic with a digitally fueled ambition.
The China Catalyst
ACM Research is a US-based capital equipment firm. Yet, its 3 most prominent customers, representing 76% of 2020 revenue, are based in mainland China, with another nearly 10% of its sales going to a South Korean chip innovator. Over the past 5 years, China and Korea have seen their semiconductor spaces drive compounded annual revenue growth of 20.7% & 19.5% and have become the epicenter of future development for ACMR.
As ACM Research takes advantage of the booming demand, this chip equipment powerhouse is rapidly ramping up its own equipment production capacity and capabilities (more offerings) in the region. The company has several new expansion projects for organic growth that will continue to fuel this stock's growth in 2022.
ACMR remains small-cap equity with a market value of around $1.6 billion. However, with proven profitable growth between 35% - 45% in the past 3 years and a place in Morgan Stanley's shortlist of 2022 chip picks, it's only a matter of time before the market gets wind of this unique investment thesis and lifts ACM Research out of its small-cap shadow and into the large-cap spotlight.
The Technicals
ACMR is trading over 40% off the highs it touched last February but managed to find a bottom around ACMR is trading over 40% off the highs it touched last February but managed to find a bottom around $69 a share in December and has been range-bound between $70 and $90 a share, a rather extensive roughly 25% breadth since mid-November
ACMR shares have seen robust bullish price action since the end of January, finally breaking back above its 50-day moving average as this under-the-radar international chip stock heads towards its analyst-supported large-cap ambitions.
6 out of 6 analysts are calling ACM Research a buy today now, with price targets between $110 and $150, and the increasingly bullish outlook on ACMR has thrusted it into a Zacks Rank #1 (Strong Buy).
Clorox, a leading multinational consumer staples conglomerate with a controlling interest in cleaning supplies, was a clear-cut COVID winner. Masked consumers raced to their local drug stores and supermarkets to stock up on everything from Clorox wipes to Glad trash bags (a subsidiary) as the world prepared to lockdown, boosting CLX shares to all-time highs.
Clorox's family of brands posted record revenues in the first few quarters of the pandemic, with its topline growth monetarily breaching 20% (year-over-year) in 2020 as these highly demanded consumer products became scarce commodities.
Clorox's previously low-beta shares took off in the first 7-months of 2020, going from a stable $150 to its $240 peak in early August (60% appreciation), which is when the tide turned as analysts began suspecting peak growth and they weren't wrong.
CLX has since fallen nearly 40% off its 2020 highs as investors begin to realize that the pandemic was more of a moment of glory for Clorox than a sanitation-focused societal shift.
In the first week of February, its latest inflation plagued earnings report showed the market that Clorox's pandemic-thriving business was now struggling to keep its margins above water. Clorox missed EPS estimates because of rapidly reversing sales growth, margin crushing commodity costs, and feeble forward guidance, causing CLX to capitulate nearly 15% in just one session.
CLX is now trading below its pre-pandemic levels as commodity pricing pressures look to be a longer-term headwind than initially priced in.
Analysts have been reeling in their earnings expectations and price targets in tandem, as CLX's net margins get diminished to almost nothing, with inflation driving up costs at the fastest pace in 4-decades. CLX is now sitting at a Zacks Rank #5 (Strong Sell) and could go lower depending on the pivotal January CPI reading, which will have direct implications on Clorox's current quarter costs.
I'm not recommending that you take any position in CLX at this juncture with the stock sitting deep in oversold RSI territory, which could catalyze a technical bounce. Still, I wouldn't want to be holding CLX in this inflationary environment as its margins get pressured down to nothing.
I recommend staying away from CLX until it can generate proven margin-improving results.
Additional content:
Markets Solidly in the Green; Chipotle Beats, Lyft Meets
Markets enjoyed a healthy trading day in the green across the board Tuesday, bouncing off its Monday doldrums and looking to notch their second-straight up-week. The Dow, which had been up +453 points at its session high, finished +372, +1.06%. The S&P 500 and Nasdaq are now up two of their last three trading days, +0.84% and +1.28%, respectively. The small-cap Russell 2000 won the day, +1.63%.
Real Household Debt in Q4 2021 cooled to +1.4% from +1.8% in Q3. This is along the lines of a somewhat more cautious consumer in the final quarter of last year. The International Trade Deficit rose slightly in December month over month to -$80.7 billion, which was lower than analysts were predicting. The pricing-in of a higher-interest-rate/post-Covid economic landscape looks to be getting easier to manage for investors.
After Tuesday’s close, Chipotle Mexican Grill shares jumped +7% on reaction to its Q4 earnings report: earnings of $5.58 per share outpaced the $5.15 expected, on quarterly sales of $1.96 billion, a smidge better than the $1.95 billion in the Zacks consensus. Same-store sales up +15.2% topped expectations by 40 basis points. Profit margins were in-line.
Digital Sales in the quarter rose +3.8% quarter over quarter, and +25% year over year. This highly important segment now accounts for just under 50% of all Chipotle sales. The company was an early mover on the digital sales business among quick-service restaurants. This is the company’s fourth-straight earnings beat. Shares still have a ways to go to get back to their late-September highs.
Lyft shares have swung into the negative by about -3.8% after jumping following its Q4 results: earnings of 9 cents per share met expectations exactly, while $970 million in revenues rose +70% year over year and cruised past the $943 billion in the Zacks consensus. The ride-sharing major came in light on Active Riders — 18.73 million versus 20.2 million anticipated — though Revenue Per Average User was much higher: $51.79 versus $46.54 expected.
We’ll get a revision to December Wholesale Inventories Wednesday morning, plus another big day of Q4 earnings reports on the docket. These will be capped off byDisney’sreport Wednesday afternoon.
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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.
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ACM Research as the Bull of the Day and Clorox have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – February 9, 2022 – Zacks Equity Research shares ACM Research (ACMR - Free Report) as the Bull of the Day and Clorox (CLX - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Chipotle Mexican Grill (CMG - Free Report) , Lyft (LYFT - Free Report) and Disney (DIS - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
The time to reopen your portfolio to the recently suppressed Chinese stocks has come, with Biden's administration making clear efforts to resume its alliance with Beijing (after years of political turmoil). At the same time, China's overdue economic recovery commences as its central bank goes against the global inflation grain, lowering its benchmark rates to further promote this economic expansion.
China's growth-focused economy is putting everything they have into building out its semiconductor capabilities with an unbelievable 33.3% spike in chip production in 2021 despite some self-inflicted economic headwinds.
The ripping rally in US public equities has been decelerating over the past couple of months, following an over 100% bull run in the S&P 500 from the pandemic lows in March 2020 (40% above pre-pandemic high), and investors are beginning to look abroad for higher return opportunities.
The opportunity in China's chip segment is undeniable, with analysts projecting the nation will generate a sizable 15% CAGR over the next 5 years in its nascent semiconductor market. I've got an undiscovered Chinese chip player for you with near-term return potential that you don't want to miss out on.
ACM Research is a niche under-the-radar small-cap semiconductor player with an ideal concentrated exposure to Asia, enabling it to take advantage of this project shift in international equity returns while riding the endless wave of chip-focused demands. ACMR provides substantial upside potential at the stock's currently overlooked small-cap valuation, with its rapidly accelerating chipmaking capacity and strategic Chinese exposure being the primary buy catalyst.
ACM Research is a global leader in semiconductor equipment. As chip manufacturers in Asia begin ramping up production, ACM's best-in-class chipmaking equipment is poised to take flight following a year and a half of sideways trading action.
Chip demands far surpassing current production capacities entering the digital renaissance of the 4th Industrial Revolution, positioning this business to explode as the Roaring 20s recommence.
China Risk's May Be US
Chinese stocks have been hammered for nearly a year now, as President Xi and his increasingly autocratic communist administration crackdown on the swelling wealth in its booming tech sector. Xi's fear of losing control of "his" nation to a wealthy group of elites is reminiscent of Mao Zedong's totalitarian regime.
This paranoid egotistical positioning has led to a tidal wave of new tech-focused regulations under the guise of elevating "equality" and improved "productivity." These have capitulated the value of this nation's most prominent innovators by a meaningful amount.
Those stocks that had been at the center of these regulatory headwinds have seen their share values significantly deteriorate, presenting some superior long-term prospects as the global economy reemerges from the pandemic with a digitally fueled ambition.
The China Catalyst
ACM Research is a US-based capital equipment firm. Yet, its 3 most prominent customers, representing 76% of 2020 revenue, are based in mainland China, with another nearly 10% of its sales going to a South Korean chip innovator. Over the past 5 years, China and Korea have seen their semiconductor spaces drive compounded annual revenue growth of 20.7% & 19.5% and have become the epicenter of future development for ACMR.
As ACM Research takes advantage of the booming demand, this chip equipment powerhouse is rapidly ramping up its own equipment production capacity and capabilities (more offerings) in the region. The company has several new expansion projects for organic growth that will continue to fuel this stock's growth in 2022.
ACMR remains small-cap equity with a market value of around $1.6 billion. However, with proven profitable growth between 35% - 45% in the past 3 years and a place in Morgan Stanley's shortlist of 2022 chip picks, it's only a matter of time before the market gets wind of this unique investment thesis and lifts ACM Research out of its small-cap shadow and into the large-cap spotlight.
The Technicals
ACMR is trading over 40% off the highs it touched last February but managed to find a bottom around ACMR is trading over 40% off the highs it touched last February but managed to find a bottom around $69 a share in December and has been range-bound between $70 and $90 a share, a rather extensive roughly 25% breadth since mid-November
ACMR shares have seen robust bullish price action since the end of January, finally breaking back above its 50-day moving average as this under-the-radar international chip stock heads towards its analyst-supported large-cap ambitions.
6 out of 6 analysts are calling ACM Research a buy today now, with price targets between $110 and $150, and the increasingly bullish outlook on ACMR has thrusted it into a Zacks Rank #1 (Strong Buy).
Bear of the Day:
Clorox, a leading multinational consumer staples conglomerate with a controlling interest in cleaning supplies, was a clear-cut COVID winner. Masked consumers raced to their local drug stores and supermarkets to stock up on everything from Clorox wipes to Glad trash bags (a subsidiary) as the world prepared to lockdown, boosting CLX shares to all-time highs.
Clorox's family of brands posted record revenues in the first few quarters of the pandemic, with its topline growth monetarily breaching 20% (year-over-year) in 2020 as these highly demanded consumer products became scarce commodities.
Clorox's previously low-beta shares took off in the first 7-months of 2020, going from a stable $150 to its $240 peak in early August (60% appreciation), which is when the tide turned as analysts began suspecting peak growth and they weren't wrong.
CLX has since fallen nearly 40% off its 2020 highs as investors begin to realize that the pandemic was more of a moment of glory for Clorox than a sanitation-focused societal shift.
In the first week of February, its latest inflation plagued earnings report showed the market that Clorox's pandemic-thriving business was now struggling to keep its margins above water. Clorox missed EPS estimates because of rapidly reversing sales growth, margin crushing commodity costs, and feeble forward guidance, causing CLX to capitulate nearly 15% in just one session.
CLX is now trading below its pre-pandemic levels as commodity pricing pressures look to be a longer-term headwind than initially priced in.
Analysts have been reeling in their earnings expectations and price targets in tandem, as CLX's net margins get diminished to almost nothing, with inflation driving up costs at the fastest pace in 4-decades. CLX is now sitting at a Zacks Rank #5 (Strong Sell) and could go lower depending on the pivotal January CPI reading, which will have direct implications on Clorox's current quarter costs.
I'm not recommending that you take any position in CLX at this juncture with the stock sitting deep in oversold RSI territory, which could catalyze a technical bounce. Still, I wouldn't want to be holding CLX in this inflationary environment as its margins get pressured down to nothing.
I recommend staying away from CLX until it can generate proven margin-improving results.
Additional content:
Markets Solidly in the Green; Chipotle Beats, Lyft Meets
Markets enjoyed a healthy trading day in the green across the board Tuesday, bouncing off its Monday doldrums and looking to notch their second-straight up-week. The Dow, which had been up +453 points at its session high, finished +372, +1.06%. The S&P 500 and Nasdaq are now up two of their last three trading days, +0.84% and +1.28%, respectively. The small-cap Russell 2000 won the day, +1.63%.
Real Household Debt in Q4 2021 cooled to +1.4% from +1.8% in Q3. This is along the lines of a somewhat more cautious consumer in the final quarter of last year. The International Trade Deficit rose slightly in December month over month to -$80.7 billion, which was lower than analysts were predicting. The pricing-in of a higher-interest-rate/post-Covid economic landscape looks to be getting easier to manage for investors.
After Tuesday’s close, Chipotle Mexican Grill shares jumped +7% on reaction to its Q4 earnings report: earnings of $5.58 per share outpaced the $5.15 expected, on quarterly sales of $1.96 billion, a smidge better than the $1.95 billion in the Zacks consensus. Same-store sales up +15.2% topped expectations by 40 basis points. Profit margins were in-line.
Digital Sales in the quarter rose +3.8% quarter over quarter, and +25% year over year. This highly important segment now accounts for just under 50% of all Chipotle sales. The company was an early mover on the digital sales business among quick-service restaurants. This is the company’s fourth-straight earnings beat. Shares still have a ways to go to get back to their late-September highs.
Lyft shares have swung into the negative by about -3.8% after jumping following its Q4 results: earnings of 9 cents per share met expectations exactly, while $970 million in revenues rose +70% year over year and cruised past the $943 billion in the Zacks consensus. The ride-sharing major came in light on Active Riders — 18.73 million versus 20.2 million anticipated — though Revenue Per Average User was much higher: $51.79 versus $46.54 expected.
We’ll get a revision to December Wholesale Inventories Wednesday morning, plus another big day of Q4 earnings reports on the docket. These will be capped off byDisney’sreport Wednesday afternoon.
Questions or comments about this article and/or its author? Click here>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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.