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Beat the Market Like Zacks: Novo Nordisk, Microsoft, Clorox in Focus

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Two of the three most widely followed indexes closed the past week in the red, while one ended in the green. The Nasdaq Composite advanced 0.4%, while the Dow Jones Industrial Average and the S&P 500 lost 1.1% and 0.3%, respectively.

A slew of mixed earnings results and the regional banking crisis paved the way for choppy trading throughout the week. All eyes were on the Consumer Price Index (CPI), which blew hot and cold, with the year-over-year number coming in the lowest in two years, while the headline number remained hotter than expected. Trouble continued to brew on the political front as the two major parties failed to reach an agreement on the debt-ceiling question.

With consumer sentiments falling to six-month low and long-term inflation expectations rising, investors are currently apprehensive about the state of the economy in the months to come, and trading might continue to be choppy.

Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.  

As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.

Here are some of our key achievements:

Novo Nordisk and Dunelm Surge Following Zacks Rank Upgrade

Shares of Novo Nordisk A/S (NVO - Free Report) have soared 21% (versus the S&P 500’s 5.1% increase) since it was upgraded to a Zacks Rank #1 (Strong Buy) on February 27.

Another stock, Dunelm Group plc (DNLMY - Free Report) , which was upgraded to a Zacks Rank #1 on March 3, has returned 8% since then (versus the S&P 500’s 4.7% rise).

Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.  

This stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally audited track record, with Zacks Rank #1 stocks generating an average annual return of +24.8% since 1988.You can see the complete list of today’s Zacks Rank #1 stocks here >>>

A hypothetical portfolio of Zacks Rank #1 stocks has returned 9.7% this year (through March 6) versus 5.4% for the S&P 500 Index.

Check Novo Nordisk’s historical EPS and Sales here>>>

Check Dunelm’s historical EPS and Sales here>>>

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Zacks Recommendation Upgrade Drives Transportadora de Gas and MYR Group Higher 

Shares of Transportadora de Gas (TGS - Free Report) and MYR Group Inc. (MYRG - Free Report) have advanced 14% (versus the S&P 500’s 4% rise) and 12.1% (versus the S&P 500’s 5.1% increase), respectively, since their Zacks Recommendation was upgraded to Outperform on February 24 and February 27, respectively.

While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.

The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.

To access our research reports with Zacks Recommendations for the 1100+ stocks we cover, click here>>>

Zacks Focus List Stocks Sea, Microsoft Soar

Shares of Sea Limited (SE - Free Report) , which belongs to the Zacks Focus List, have risen 30.4% over the past 12 weeks. The stock was added to the Focus List on March 26, 2020. Another Focus-List holding, Microsoft Corporation (MSFT - Free Report) , which was added to the portfolio on February 1, 2016, has returned 19.7% over the past 12 weeks. The S&P 500 has gained 2.1% over this period. 

The Zacks Focus List is a model portfolio of 50 hand-picked stocks that possess the right fundamental ingredients to outperform the market over the next 12 months. These 50 stocks are picked from a long list of stocks with the highest Zacks Rank.

The 50-stock Zacks Focus List model portfolio returned 11.1% in 2023 Q1 versus 7.5% for the S&P 500 Index. In 2022, the portfolio produced a 15.2% loss versus the S&P 500 Index’s 18% decline. 

Since 1996, the Focus List portfolio has produced an annualized return of 12.9% through March 31, 2023. This compares to an 8.9% annualized return for the S&P 500 Index in the same time period.

Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>

Zacks ECAP Stocks Church & Dwight and Monster Beverage Make Significant Gains

Church & Dwight Co., Inc. (CHD - Free Report) , a component of our Earnings Certain Admiral Portfolio (ECAP), jumped 15.6% over the past 12 weeks. Monster Beverage Corporation (MNST - Free Report) followed Church & Dwight with 14.3% returns.

ECAP, which consists of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks, returned 3.7% in 2023 Q1 versus 7.5% for the S&P 500 Index. The portfolio returned negative 4.7% in 2022 versus the S&P 500 Index’s 18% decline.

With little to no turnover and annual rebalance periodicity, the ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.

The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.

Zacks ECDP Stocks PepsiCo and Clorox Outperform Peers 

PepsiCo, Inc. (PEP - Free Report) , which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 11.3% over the past 12 weeks. Another ECDP stock, The Clorox Company (CLX - Free Report) , has climbed 10.1% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid the heightened market volatility contributed to this performance.

Check PepsiCo’s dividend history here>>>

Check Clorox’s dividend history here>>>

With an extremely low Beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps significantly mitigate risk.

ECDP returned 0.04% in 2023 Q1 versus 7.5% for the S&P 500 Index and 1.4% for the ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) . The portfolio returned negative 2.3% in 2022 versus an 18% decline for the S&P 500 Index and an 8.3% loss for NOBL.

Click here to access this portfolio on Zacks Advisor Tools.  

Celsius Makes It Into The Zacks Top 10 Stocks

Celsius Holdings, Inc. (CELH - Free Report) from the Zacks Top 10 Stocks for 2023 has gained 24.8% year to date, which compares to an 8% gain for the S&P 500 Index.

The portfolio returned 5.2% in 2023 Q1 versus 7.5% for the S&P 500 (the equal-weighted index, a more appropriate benchmark, returned 2.7 % in Q1). The portfolio returned a negative 15.8% in 2022 versus an 18.1% decline for the S&P 500 Index. Since 2012, the Top 10 portfolio has generated an annualized return of 22.4% versus 12.5% for the S&P 500 Index.

Since the start of 2012, the Zacks Top 10 Stocks delivered a cumulative return of 827.6% through the end of 2022 versus a 265% cumulative return for the S&P 500 Index.

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