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Chicago, IL – March 28, 2022 – Today, Zacks Investment Ideas feature highlights Horizon Kinetics Inflation Beneficiaries ETF (INFL - Free Report) and Brigham Minerals, Inc. .
How to Use Inflation to Your Advantage: 2 Securities to Buy
The price action in the stock market has been fast and furious this year as investors have positioned their portfolios for higher inflation. Sector rotation has been on full display, with institutions shifting allocations toward sectors and industries that historically perform better in inflationary periods.
After lagging throughout the latter half of last year, the Basic Materials sector exemplifies this sector rotation as it has vastly outperformed the major indices with a 15.25% year-to-date return. This sector is currently ranked in the top 38% out of all 16 Zacks Ranked Sectors.
Digging a bit deeper, one particular industry group within this sector that is outperforming is the Zacks Mining – Miscellaneous industry. The group is undervalued (9.83 forward P/E) and is ranked in the top 30% out of approximately 250 Zacks Ranked Industries. Because it is ranked in the top half of all industry groups, we expect this group to outperform the market over the next 3 to 6 months.
Historical research studies have shown that roughly half of a stock's price movement can be attributed to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. By focusing on the leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our investing success.
Exchange-traded fund (ETF) performance can also serve as a confirmation indicator that supports our investment thesis. The Horizon Kinetics Inflation Beneficiaries ETF is comprised of domestic and foreign equity securities of companies that are expected to benefit from rising prices of real assets. The stock we will discuss below makes up over 3% of the total INFL holdings.
INFL is displaying relative strength as the ETF is up nearly 8% this year while the S&P 500 is down over 5%. The great thing about the Horizon Kinetics Inflation Beneficiaries ETF is that it is made up of companies whose revenues are expected to increase with inflation without corresponding increases in expenses.
The company we will analyze below is also a component of the Zacks Mining – Miscellaneous industry group. Let's take a closer look at this stock.
Brigham Minerals, Inc.
Brigham Minerals is a mineral acquisition company. MNRL is a domestic owner and operator of a portfolio of mineral and royalty interests. The company has interests in approximately 92,375 net royalty acres and a combination of nearly 8,600 oil and natural gas wells. Brigham Minerals was founded in 2012 and is headquartered in Austin, TX.
MNRL has surpassed earnings estimates in two of the past three quarters. The mineral acquisition firm sports the highest Zacks VGM rating of 'A,' signaling strong trends in value, growth and momentum. MNRL has delivered a trailing four-quarter average earnings surprise of +0.39%, helping push the stock 86.3% higher in the past year.
Analysts are bullish on current-quarter prospects and have upped their EPS estimates by 16.22% in the past 60 days. The Zacks Consensus Estimate now stands at $0.43, representing a 115% growth rate relative to the same quarter last year. MNRL is slated to release the Q1 results on May 5th.
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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.
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Zacks Investment Ideas feature highlights: Horizon Kinetics Inflation Beneficiaries ETF and Brigham Minerals
For Immediate Release
Chicago, IL – March 28, 2022 – Today, Zacks Investment Ideas feature highlights Horizon Kinetics Inflation Beneficiaries ETF (INFL - Free Report) and Brigham Minerals, Inc. .
How to Use Inflation to Your Advantage: 2 Securities to Buy
The price action in the stock market has been fast and furious this year as investors have positioned their portfolios for higher inflation. Sector rotation has been on full display, with institutions shifting allocations toward sectors and industries that historically perform better in inflationary periods.
After lagging throughout the latter half of last year, the Basic Materials sector exemplifies this sector rotation as it has vastly outperformed the major indices with a 15.25% year-to-date return. This sector is currently ranked in the top 38% out of all 16 Zacks Ranked Sectors.
Digging a bit deeper, one particular industry group within this sector that is outperforming is the Zacks Mining – Miscellaneous industry. The group is undervalued (9.83 forward P/E) and is ranked in the top 30% out of approximately 250 Zacks Ranked Industries. Because it is ranked in the top half of all industry groups, we expect this group to outperform the market over the next 3 to 6 months.
Historical research studies have shown that roughly half of a stock's price movement can be attributed to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. By focusing on the leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our investing success.
Exchange-traded fund (ETF) performance can also serve as a confirmation indicator that supports our investment thesis. The Horizon Kinetics Inflation Beneficiaries ETF is comprised of domestic and foreign equity securities of companies that are expected to benefit from rising prices of real assets. The stock we will discuss below makes up over 3% of the total INFL holdings.
INFL is displaying relative strength as the ETF is up nearly 8% this year while the S&P 500 is down over 5%. The great thing about the Horizon Kinetics Inflation Beneficiaries ETF is that it is made up of companies whose revenues are expected to increase with inflation without corresponding increases in expenses.
The company we will analyze below is also a component of the Zacks Mining – Miscellaneous industry group. Let's take a closer look at this stock.
Brigham Minerals, Inc.
Brigham Minerals is a mineral acquisition company. MNRL is a domestic owner and operator of a portfolio of mineral and royalty interests. The company has interests in approximately 92,375 net royalty acres and a combination of nearly 8,600 oil and natural gas wells. Brigham Minerals was founded in 2012 and is headquartered in Austin, TX.
MNRL has surpassed earnings estimates in two of the past three quarters. The mineral acquisition firm sports the highest Zacks VGM rating of 'A,' signaling strong trends in value, growth and momentum. MNRL has delivered a trailing four-quarter average earnings surprise of +0.39%, helping push the stock 86.3% higher in the past year.
Analysts are bullish on current-quarter prospects and have upped their EPS estimates by 16.22% in the past 60 days. The Zacks Consensus Estimate now stands at $0.43, representing a 115% growth rate relative to the same quarter last year. MNRL is slated to release the Q1 results on May 5th.
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.
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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.