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AMN Healthcare and Hudson Technologies have been highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – September 15, 2022 – Zacks Equity Research shares AMN Healthcare Services (AMN - Free Report) as the Bull of the Day and Hudson Technologies (HDSN - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Canadian Natural Resources (CNQ - Free Report) , Chevron (CVX - Free Report) and Imperial Oil (IMO - Free Report) .

Here is a synopsis of all five stocks.

Bull of the Day:

AMN Healthcare Services is the $4.5 billion healthcare staffing company that specializes in traveling medical professionals.

Their business has been booming since Covid-19 made highly-mobile critical care services so vital as outbreaks could surface in new hotspots every few weeks.

Because of the burdens on hospital systems from Covid patients with comorbidities, skilled critical care staff became nearly priceless as we will discuss.

AMN recruits and places nurses, physicians, and other healthcare professionals in travel or permanent assignments in acute-care facilities, physician practice groups, and other healthcare facilities.

Strong Sales and Profit Growth

AMN is a Zacks #1 Rank once again after reporting another "beat-and-raise" quarter in early August.

In the weeks hence, analysts were busy raising both top and bottom line estimates.

The revenue consensus forecast for this year sees 28.5% growth to cross $5.1 billion. And the EPS outlook measures over 40% growth to breach $11.25.

One issue that might concern investors though is that next year's projections show a reversal. Current top and bottom line consensus estimates from 4-5 covering research analysts call for declines of -16.6% and -26.3%, respectively.

A Soft Warning from HCA and Tenet

The explanation for that may exist partially in sentiment from two large hospital enterprises.

In late July, Baird analyst Mark Marcon reported to investors that shares of AMN were down over 10%, likely due to comments from HCA Healthcare and Tenet Healthcare, whose results beat expectations for Q2 as labor costs began to ease.

The analyst noted that HCA indicated it had successfully eased expenses on multiple fronts.

To get more clarity on the situation, I went to our resident expert Tracey Ryniec. She has followed AMN for many years, even before Covid, and owns shares in the Value Investor portfolio.

Here were some of her comments (with any errors or omissions belonging to me)...

Nursing wages are falling for the travel nurses now that COVID is easing. Since they do the staffing for it, most of the travel nurses actually work for AMN and then they get sent out through AMN. As those wages fall, so will AMN's earnings.

There is still a massive nurse shortage, however. So they won't totally crash down because it's still supply and demand dynamics which should be in effect for the next several years.

The labor costs are coming down but not as much as the analysts feared. The travel nurses are no longer getting as much as $3,500 a week, but they can still make $3,000 a week. Because, frankly, even without COVID there aren't enough.

Many younger nurses are quitting due to burnout, which wasn't expected. And the Baby Boomer nurses are actually retiring -- which was always going to be a problem.

The state of Kentucky needs 5,000 nurses. That's just one state. They are paying for tuition for people who are going to nursing school because they are so desperate.

This is great analysis from Tracey. And I would only add the dimension of aging demographics -- where people are also living longer -- and America's "comorbidities" problem with poor nutrition and obesity leading to multiple complications like diabetes, heart disease, and cancer.

Beyond Covid: A Diverse Array of Vital Services

Based in San Diego, AMN has seen its business evolve beyond traditional healthcare staffing and recruitment services, thereby becoming a strategic total talent solutions partner with its clients. The company has expanded its portfolio to serve a diverse and growing set of healthcare talent-related needs.

In addition to professional staffing and recruitment services, AMN Healthcare’s suite of healthcare workforce solutions includes MSP, vendor management systems (VMS), medical language interpretation services, predictive labor analytics, workforce optimization technology and consulting, clinical labor scheduling, recruitment process outsourcing (RPO), revenue cycle solutions, credentialing software services, and virtual care management services.

AMN enables its clients to build, manage and optimize their healthcare talent to deliver great patient outcomes and experience. The company reports through three segments — Nurse and Allied Solutions (75.1% of total FY21 revenues, up 75.9% from FY20), Physician and Leadership Solutions (14.9%, up 27.3%), and Technology and Workforce Solutions (10%, up 75.6%).

Nurse and Allied Solutions segment includes the company’s travel nurse staffing, rapid response nurse staffing and labor disruption, allied staffing, local staffing, and revenue cycle solutions businesses.

The Physician and Leadership Solutions segment includes the company’s locum tenens staffing, healthcare interim leadership staffing, executive search, and physician permanent placement businesses.

The technology and workforce solutions segment includes the company’s language services, VMS, workforce optimization, telehealth, credentialing, and outsourced solutions businesses.

Cash Flow Growth

Finally, it's worth noting the strong cash-flow growth of AMN. Here was our recent analysis for investors on this topic...

Cash is the lifeblood of any business, but higher-than-average cash flow growth is more beneficial and important for growth-oriented companies than for mature companies. That's because high cash accumulation enables these companies to undertake new projects without raising expensive outside funds.

Right now, year-over-year cash flow growth for AMN Healthcare is 89.9%, which is higher than many of its peers. In fact, the rate compares to the industry average of 29.4%.

While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 26.7% over the past 3-5 years versus the industry average of 14.8%.

Bottom line on AMN: Accumulate shares near $100 and look for them to grow for several more years given these important healthcare trends.

Bear of the Day:

Hudson Technologies closed the most recent trading day at $7.64, making no change from the previous trading session. This change lagged the S&P 500's 0.34% gain on the day. Elsewhere, the Dow gained 0.1%, while the tech-heavy Nasdaq added 0.02%.

Heading into today, shares of the refrigerant services company had lost 25.75% over the past month, lagging the Industrial Products sector's loss of 6.56% and the S&P 500's loss of 7.95% in that time.

Hudson Technologies will be looking to display strength as it nears its next earnings release. On that day, Hudson Technologies is projected to report earnings of $0.29 per share, which would represent a year-over-year decline of 14.71%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $78 million, up 28.61% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.79 per share and revenue of $300.3 million, which would represent changes of +159.42% and +55.8%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Hudson Technologies. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Hudson Technologies is holding a Zacks Rank of #1 (Strong Buy) right now.

In terms of valuation, Hudson Technologies is currently trading at a Forward P/E ratio of 4.27. Its industry sports an average Forward P/E of 12.86, so we one might conclude that Hudson Technologies is trading at a discount comparatively.

Investors should also note that HDSN has a PEG ratio of 0.14 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Industrial Services industry currently had an average PEG ratio of 1.53 as of yesterday's close.

The Industrial Services industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 151, putting it in the bottom 41% of all 250+ industries.

The Zacks Industry Rank is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow HDSN in the coming trading sessions, be sure to utilize

Additional content:

Use Dividend Investing to Ride the Energy Roller Coaster

While the Energy sector can generate great returns when commodity prices go up and profits skyrocket, it is also exposed to heavy selling pressure when realizations crater. In other words, the oil and gas business is inherently cyclical, with delicate supply/demand balances, among others, determining their fortunes.
Amid the specter of magnified gains and losses, investing in high-quality dividend stocks like Canadian Natural Resources, Chevron and Imperial Oil might fetch you stable, promising returns.

Focus on Dividend Growth Investing to Offset Energy Volatility

From the depths of minus $38 a barrel during the height of the pandemic in April 2020 to a 14-year high surge of above $130 per barrel this March and finally around $90 now, crude has been on a roller-coaster ride over the past few years. It’s not any different for natural gas. The fuel slumped to a 25-year low in June 2020 but recently hit $10 per MMBtu for the first time since 2008. Diverse factors ranging from demand/supply fundamentals to economic events to geopolitical shocks influence commodity price realizations.  

As evident from the energy market story, stocks can take a sudden turn for the good (or bad), making stock picking a risky game. Every good stock also has its bad day, which adds to the risk. With uncertainty ruling the markets, it is not surprising that dividend investing has emerged as one of the most popular investing themes.

Dividend stocks are always investors’ preferred choices as they provide steady income and cushion against market risks. These stocks are generally less volatile in nature and hence, are dependable when it comes to long-term investment planning. They not only offer higher income but also protect against equity market risks.

Dividend stocks are safe bets to create wealth, as the payouts generally act as a hedge against economic uncertainty and simultaneously provide downside protection by offering sizable yields on a regular basis. Finally, dividend growth can also help investors to offset some of the value destruction of the high inflationary environment prevailing at the moment.

A Careful Stance Leads to Best Dividend Stocks

Although the benefits of dividend investing cannot be stressed enough, one should keep in mind that not every company can keep up with its dividend-paying momentum. Hence, a cautious strategy needs to be followed to select the best dividend stocks with the potential for steady returns.

To guide investors to the right picks, we are recommending stocks with a payout ratio less than 60 and dividend yield of at least 2%. Moreover, these companies have grown their dividends over the past five years.

Calculated by dividing dividend per share by earnings per share, the payout ratio indicates how comfortably a firm can pay the dividend from its earnings. It is one of the key metrics that dividend growth investors consider when looking for potential investments. A payout ratio below 60 looks quite sustainable and leaves enough scope for future dividend hikes.

With our objective to build a dividend income portfolio, we look for companies that at least have yields better than the S&P 500. A representative of the broader market, the index currently yields 1.48%. While our yield criterion isn't very high, it’s at a level where the company can weather all kinds of commodity price environments and provide a reliable income stream to investors.

Finally, we only consider stocks that have consistent dividend, i.e., paying and increasing offerings over the past five years. It also acts as an indicator of what to expect from the company in the next few years on the payout front.

Our Choices

We have used the above criteria to narrow down three dividend-paying energy stocks.

Canadian Natural Resources: One of the largest independent energy companies in Canada, CNQ pays out a quarterly dividend of 75 Canadian cents, or around 57 cents per share, which gives it a 4.33% yield at the current stock price. The Zacks Rank #2 (Buy) company’s payout ratio is 30, with a five-year dividend growth rate of 19.5%. (Check Canadian Natural Resources' dividend history here)

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CNQ is valued at some $63.2 billion. The Zacks Consensus Estimate for Canadian Natural Resources’ 2022 earnings has been revised 5.2% upward over the past 60 days. The Canadian energy behemoth has a trailing four-quarter earnings surprise of roughly 15.5%, on average. CNQ shares have gained 61.1% in a year.

Canadian Natural Resources Limited dividend-yield-ttm | Canadian Natural Resources Limited Quote

Chevron: Chevron is one of the largest publicly traded oil and gas companies in the world, which participates in every aspect related to energy — from oil production to refining and marketing. CVX’s dividend of $1.42 per share ($5.68 annualized) represents a 3.56% yield. The Zacks Rank #3 (Hold) Chevron’s payout ratio is 39, with a five-year dividend growth rate of 6%. (Check Chevron’s dividend history here)

Chevron is valued at some $319.3 billion. The 2022 Zacks Consensus Estimate for CVX indicates 125% year-over-year earnings per share growth. Chevron, headquartered in San Ramon, CA, has a trailing four-quarter earnings surprise of roughly 7.5%, on average. CVX shares have gained 65.8% in a year.

Chevron Corporation dividend-yield-ttm | Chevron Corporation Quote

Imperial Oil: Imperial Oil is mainly engaged in oil and gas production, petroleum products refining and marketing, and chemical business. IMO pays out a quarterly dividend of 34 Canadian cents/26 cents ($1.04 annualized) per share which gives it a 2.17% yield at the current stock price. The Zacks Rank #3 company’s payout ratio is 17, with a five-year dividend growth rate of 15.37%. (Check Imperial Oil’s dividend history here)

Imperial Oil is valued at some $30.8 billion. The 2022 Zacks Consensus Estimate for IMO indicates 179.1% year-over-year earnings per share growth. The Canadian oil giant has a trailing four-quarter earnings surprise of roughly 2.4%, on average. IMO shares have gained 71.4% in a year.

Imperial Oil Limited dividend-yield-ttm | Imperial Oil Limited Quote

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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 for information about the performance numbers displayed in this press release.

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