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Global Ship Lease and Freshpet have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – March 8, 2022 – Zacks Equity Research shares Global Ship Lease (GSL - Free Report) as the Bull of the Day and Freshpet (FRPT - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Lyft (LYFT - Free Report) , Uber Technologies (UBER - Free Report) , and Arista Networks (ANET - Free Report)
Here's a sad truth about the recent global pandemic: while many companies suffered and experienced difficult times, some companies flourished. Global Ship Lease a Zacks Rank #1 (Strong Buy) stock, is one such company and continues to outperform the market. The stock has surged more than 950% since the pandemic-induced market plunge back in March of 2020 and continues to make new highs.
Company Description
Global Ship Lease owns and operates containerships under long-term, fixed-rate charters to world class container shipping companies. GSL owns a diversified fleet of over 65 containerships of varying sizes. The company commenced operations in 2007 and is based in London. It was first listed on the New York Stock Exchange in 2008.
GSL is a component of the Zacks Transportation – Shipping industry, which is ranked in the top 33% out of approximately 250 industry groups. The stocks within this industry group are experiencing positive earnings estimate revisions, which is the most powerful force impacting stock prices. Also note the favorable relative valuation traits for this industry group:
Quantitative research studies suggest approximately half of a stock's future price appreciation is due to its industry grouping. Investing in stocks within leading industry groups can provide a constant 'tailwind' to our investing success. GSL also boasts a top overall Zacks VGM Style Score rating of 'A', reinforcing its place as a top stock during this difficult market environment.
Earnings Trends and Future Estimates
GSL has exceeded earnings estimates in nine out of the past ten quarters. Two weeks ago, the containership operator reported Q4 EPS of $1.84, a +46.03% beat over the $1.26 consensus. This compares favorably to last year's $0.38 in the same quarter. The stock has been on a tear, climbing over 80% from a year ago and up 21.2% in 2022.
Over the last four quarters, GSL has posted a +44.62% average earnings surprise. Despite the impressive performance, GSL is still relatively undervalued (3.53 forward P/E) versus its industry group (4.0).
Analysts are in agreement in terms of recent earnings estimate revisions and have upped their Q1 (+24.84%), Q2 (+27.4%), and full-year (+7.15%) EPS estimates in the past 60 days. The 2022 EPS Zacks Consensus Estimate now stands at $7.79, reflecting potential growth of 60.29% relative to last year.
Charting the Course
GSL has risen from $2.49/share back in March 2020 to $27.25 at the time of this writing. Only stocks that are in extremely powerful uptrends are able to make this type of price move. The stock has continued its winning ways over the past few months while the market has been in correction mode. This is the kind of stock we want to include in our portfolio – one that is trending well and experiencing positive earnings estimate revisions.
The 50, 100, and 200-day moving averages are all sloping up. Also, the 100-day MA has acted as support several times throughout the past year. The stock is making a series of higher highs and is showing relative strength versus the market. With both strong fundamentals and technicals, GSL has been one of the pandemic's biggest beneficiaries.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. And as we know, Global Ship Lease has seen a steady batch of positive revisions as of late. As long as this trend remains intact (and GSL continues to post earnings beats), the stock should continue its bullish run this year.
Bottom Line
Containership operators have been substantial beneficiaries of the pandemic, and GSL is no exception. The shipping industry in general has served as a great way to diversify and has been one of the pockets of the market that has been working lately. Buoyed by an undervalued and leading industry group, it's not difficult to see why GSL is a compelling investment.
A history of positive earnings surprises along with a strong technical trend certainly warrant a closer look at this top stock. Recent positive earnings estimate revisions should also serve to create a 'floor' in terms of any sudden or unexpected downside moves. If you haven't already done so, make sure to put GSL on your shortlist.
Freshpet a Zacks Rank #5 (Strong Sell) stock, is a pet food company that manufactures and markets food options for dogs and cats. FRPT provides meat-based products such as chicken and beef; vegetable products such as carrots and leafy greens; and high-fiber products such as brown rice and oats. The company makes natural fresh foods, refrigerated meals, and a variety of treats. It sells its products under the Freshpet, Dognation, and Dog Joy brand names. Freshpet was incorporated in 2004 and is headquartered in Secaucus, NJ.
Freshpet is part of the Zacks Food – Miscellaneous industry group, which currently ranks in the bottom 21% out of approximately 250 industry groups. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months.
Candidates in the bottom tiers of industry groups can often represent solid potential short candidates. While individual stocks have the ability to outperform even when included in poor-performing industries, their industry association serves as a headwind for any potential rallies. Freshpet is fighting an uphill battle and the stock is confirming this notion as it continues to make a series of lower lows.
Weak Foundation: A History of Earnings Misses
FRPT has missed earnings estimates in 15 out of the past 17 quarters – not exactly the type of trend bulls like to see. The pet food company most recently reported Q4 EPS back in February of $-0.21, missing the $-0.14 consensus estimate by -50%. FRPT posted a loss of 8 cents in the same quarter a year ago.
The company is not only consistently missing EPS estimates, they are doing so by a wide margin. FRPT has posted an average miss of -401.19% over the last four earnings announcements.
FRPT also fell short of Q4 sales estimates in which the company delivered revenues of $115.87 million, slightly missing the consensus by -0.32%. Freshpet has topped revenue estimates just once in the past four quarters.
Deteriorating Forecasts
Analysts have decreased earnings estimates across the board. The current quarter's estimate has declined -125% to $-0.36, which would represent a -38.46% regression versus the same quarter last year. Q2 estimates have fallen -150% to $-0.10.
For the year, analysts have slashed 2022 EPS estimates by -311.11% to $-0.37. Falling earnings estimates are always a concern, but a decline of this magnitude is a big red flag. If the company continues its recent streak of earnings misses, more pain will likely be ahead for the stock.
Technical Outlook
FRPT is in a sustained downtrend. The stock plunged below both the 50-day and 200-day moving averages and is making a series of lower lows. It's also important to point out that both moving averages are sloping downward – a good sign for the bears.
The death cross, a technical pattern in which a stock's 50-day moving average crosses below the longer-term 200-day moving average, occurred late last year. The stock has fallen over 45% in the past year and is showing no signs of a bottom.
Even with the recent decline, Freshpet is relatively overvalued, irrespective of the metric used.
Bottom Line
With a history of earnings misses and a strong technical downtrend, the odds aren't exactly in FRPT's favor.
Our Zacks Style Scores depict a weakening outlook for this stock, as FRPT is rated a worst-possible 'F' in our overall VGM category. A worsening fundamental and technical backdrop show that this stock is fighting an uphill battle. The fact that FRPT is a component in one of the worst-performing industry groups simply adds to the list of growing concerns.
Falling future earnings estimates are a big red flag and need to be respected. These will likely serve as a ceiling to any potential rallies, nurturing the stock's downtrend.
Potential investors should only think about including this stock in their portfolio as part of a hedge or short strategy. Bulls will want to steer clear of an overvalued FRPT until the situation shows drastic signs of improvement.
Additional content:
LYFT Joins UBER in Adding Fuel Surcharge
Amid rising fuel prices, Lyft plans to levy fuel surcharges on ride trips, The Verge reported.
Per the report, Lyft spokesperson, CJ Macklin, said in a statement, "We've been closely monitoring rising gas prices and their impact on our driver community." Macklin added, "Driver earnings overall remain elevated compared to last year, but given the rapid rise in gas prices we'll be asking riders to pay a temporary fuel surcharge, all of which will go to drivers." LYFT did not provide substantial details.
Gas prices have been soaring lately in the United States amid the Russia-Ukraine war. Ride-hail drivers are being affected by this crisis, with their earnings being squeezed to pay for the high fuel costs.
Lyft's move to add fuel surcharge follows a similar measure recently adopted by Uber Technologies. Effective Mar 16, UBER will be adding a surcharge of either 45 cents or 55 cents for each ride trip. For Uber Eats orders, the company is adding a surcharge of 35 cents or 45 cents. UBER also said that the entire amount would go to the workers who are bearing the burden of the gas price hike.
Uber said that the surcharge will depend on average trip distance and the increase in gas prices in each state. Similar to Lyft, Uber's fuel surcharge is also a temporary measure that will continue for at least 60 days, after which the company will reassess the situation for further modifications.
Shares of Arista Networks have gained more than 60% in a year.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared+40.3%, +48.2%, +67.6%, +94.4%, and+95.3%. Today you can access their live picks without cost or obligation.
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/performancefor information about the performance numbers displayed in this press release.
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Global Ship Lease and Freshpet have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – March 8, 2022 – Zacks Equity Research shares Global Ship Lease (GSL - Free Report) as the Bull of the Day and Freshpet (FRPT - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Lyft (LYFT - Free Report) , Uber Technologies (UBER - Free Report) , and Arista Networks (ANET - Free Report)
Here is a synopsis of all five stocks:
Bull of the Day:
Here's a sad truth about the recent global pandemic: while many companies suffered and experienced difficult times, some companies flourished. Global Ship Lease a Zacks Rank #1 (Strong Buy) stock, is one such company and continues to outperform the market. The stock has surged more than 950% since the pandemic-induced market plunge back in March of 2020 and continues to make new highs.
Company Description
Global Ship Lease owns and operates containerships under long-term, fixed-rate charters to world class container shipping companies. GSL owns a diversified fleet of over 65 containerships of varying sizes. The company commenced operations in 2007 and is based in London. It was first listed on the New York Stock Exchange in 2008.
GSL is a component of the Zacks Transportation – Shipping industry, which is ranked in the top 33% out of approximately 250 industry groups. The stocks within this industry group are experiencing positive earnings estimate revisions, which is the most powerful force impacting stock prices. Also note the favorable relative valuation traits for this industry group:
Quantitative research studies suggest approximately half of a stock's future price appreciation is due to its industry grouping. Investing in stocks within leading industry groups can provide a constant 'tailwind' to our investing success. GSL also boasts a top overall Zacks VGM Style Score rating of 'A', reinforcing its place as a top stock during this difficult market environment.
Earnings Trends and Future Estimates
GSL has exceeded earnings estimates in nine out of the past ten quarters. Two weeks ago, the containership operator reported Q4 EPS of $1.84, a +46.03% beat over the $1.26 consensus. This compares favorably to last year's $0.38 in the same quarter. The stock has been on a tear, climbing over 80% from a year ago and up 21.2% in 2022.
Over the last four quarters, GSL has posted a +44.62% average earnings surprise. Despite the impressive performance, GSL is still relatively undervalued (3.53 forward P/E) versus its industry group (4.0).
Analysts are in agreement in terms of recent earnings estimate revisions and have upped their Q1 (+24.84%), Q2 (+27.4%), and full-year (+7.15%) EPS estimates in the past 60 days. The 2022 EPS Zacks Consensus Estimate now stands at $7.79, reflecting potential growth of 60.29% relative to last year.
Charting the Course
GSL has risen from $2.49/share back in March 2020 to $27.25 at the time of this writing. Only stocks that are in extremely powerful uptrends are able to make this type of price move. The stock has continued its winning ways over the past few months while the market has been in correction mode. This is the kind of stock we want to include in our portfolio – one that is trending well and experiencing positive earnings estimate revisions.
The 50, 100, and 200-day moving averages are all sloping up. Also, the 100-day MA has acted as support several times throughout the past year. The stock is making a series of higher highs and is showing relative strength versus the market. With both strong fundamentals and technicals, GSL has been one of the pandemic's biggest beneficiaries.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. And as we know, Global Ship Lease has seen a steady batch of positive revisions as of late. As long as this trend remains intact (and GSL continues to post earnings beats), the stock should continue its bullish run this year.
Bottom Line
Containership operators have been substantial beneficiaries of the pandemic, and GSL is no exception. The shipping industry in general has served as a great way to diversify and has been one of the pockets of the market that has been working lately. Buoyed by an undervalued and leading industry group, it's not difficult to see why GSL is a compelling investment.
A history of positive earnings surprises along with a strong technical trend certainly warrant a closer look at this top stock. Recent positive earnings estimate revisions should also serve to create a 'floor' in terms of any sudden or unexpected downside moves. If you haven't already done so, make sure to put GSL on your shortlist.
Bear of the Day:
Freshpet a Zacks Rank #5 (Strong Sell) stock, is a pet food company that manufactures and markets food options for dogs and cats. FRPT provides meat-based products such as chicken and beef; vegetable products such as carrots and leafy greens; and high-fiber products such as brown rice and oats. The company makes natural fresh foods, refrigerated meals, and a variety of treats. It sells its products under the Freshpet, Dognation, and Dog Joy brand names. Freshpet was incorporated in 2004 and is headquartered in Secaucus, NJ.
Freshpet is part of the Zacks Food – Miscellaneous industry group, which currently ranks in the bottom 21% out of approximately 250 industry groups. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months.
Candidates in the bottom tiers of industry groups can often represent solid potential short candidates. While individual stocks have the ability to outperform even when included in poor-performing industries, their industry association serves as a headwind for any potential rallies. Freshpet is fighting an uphill battle and the stock is confirming this notion as it continues to make a series of lower lows.
Weak Foundation: A History of Earnings Misses
FRPT has missed earnings estimates in 15 out of the past 17 quarters – not exactly the type of trend bulls like to see. The pet food company most recently reported Q4 EPS back in February of $-0.21, missing the $-0.14 consensus estimate by -50%. FRPT posted a loss of 8 cents in the same quarter a year ago.
The company is not only consistently missing EPS estimates, they are doing so by a wide margin. FRPT has posted an average miss of -401.19% over the last four earnings announcements.
FRPT also fell short of Q4 sales estimates in which the company delivered revenues of $115.87 million, slightly missing the consensus by -0.32%. Freshpet has topped revenue estimates just once in the past four quarters.
Deteriorating Forecasts
Analysts have decreased earnings estimates across the board. The current quarter's estimate has declined -125% to $-0.36, which would represent a -38.46% regression versus the same quarter last year. Q2 estimates have fallen -150% to $-0.10.
For the year, analysts have slashed 2022 EPS estimates by -311.11% to $-0.37. Falling earnings estimates are always a concern, but a decline of this magnitude is a big red flag. If the company continues its recent streak of earnings misses, more pain will likely be ahead for the stock.
Technical Outlook
FRPT is in a sustained downtrend. The stock plunged below both the 50-day and 200-day moving averages and is making a series of lower lows. It's also important to point out that both moving averages are sloping downward – a good sign for the bears.
The death cross, a technical pattern in which a stock's 50-day moving average crosses below the longer-term 200-day moving average, occurred late last year. The stock has fallen over 45% in the past year and is showing no signs of a bottom.
Even with the recent decline, Freshpet is relatively overvalued, irrespective of the metric used.
Bottom Line
With a history of earnings misses and a strong technical downtrend, the odds aren't exactly in FRPT's favor.
Our Zacks Style Scores depict a weakening outlook for this stock, as FRPT is rated a worst-possible 'F' in our overall VGM category. A worsening fundamental and technical backdrop show that this stock is fighting an uphill battle. The fact that FRPT is a component in one of the worst-performing industry groups simply adds to the list of growing concerns.
Falling future earnings estimates are a big red flag and need to be respected. These will likely serve as a ceiling to any potential rallies, nurturing the stock's downtrend.
Potential investors should only think about including this stock in their portfolio as part of a hedge or short strategy. Bulls will want to steer clear of an overvalued FRPT until the situation shows drastic signs of improvement.
Additional content:
LYFT Joins UBER in Adding Fuel Surcharge
Amid rising fuel prices, Lyft plans to levy fuel surcharges on ride trips, The Verge reported.
Per the report, Lyft spokesperson, CJ Macklin, said in a statement, "We've been closely monitoring rising gas prices and their impact on our driver community." Macklin added, "Driver earnings overall remain elevated compared to last year, but given the rapid rise in gas prices we'll be asking riders to pay a temporary fuel surcharge, all of which will go to drivers." LYFT did not provide substantial details.
Gas prices have been soaring lately in the United States amid the Russia-Ukraine war. Ride-hail drivers are being affected by this crisis, with their earnings being squeezed to pay for the high fuel costs.
Lyft, Inc. price | Lyft, Inc. Quote
Lyft's move to add fuel surcharge follows a similar measure recently adopted by Uber Technologies. Effective Mar 16, UBER will be adding a surcharge of either 45 cents or 55 cents for each ride trip. For Uber Eats orders, the company is adding a surcharge of 35 cents or 45 cents. UBER also said that the entire amount would go to the workers who are bearing the burden of the gas price hike.
Uber said that the surcharge will depend on average trip distance and the increase in gas prices in each state. Similar to Lyft, Uber's fuel surcharge is also a temporary measure that will continue for at least 60 days, after which the company will reassess the situation for further modifications.
Both Uber and Lyft carry a Zacks Rank #3 (Hold).
A Key Pick
A better-ranked stock in the broader Computer and Technology sector is Arista Networks, which carries a Zacks Rank #2 (Buy). The company's earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 7.7%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Shares of Arista Networks have gained more than 60% in a year.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared+40.3%, +48.2%, +67.6%, +94.4%, and+95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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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/performancefor information about the performance numbers displayed in this press release.