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Weave Communications and Central Garden & Pet have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – May 24, 2023 – Zacks Equity Research shares Weave Communications (WEAV - Free Report) as the Bull of the Day and Central Garden & Pet (CENT - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NuStar Energy (NS - Free Report) , Murphy USA (MUSA - Free Report) and Sunoco LP (SUN - Free Report) .
Weave Communications is a Zacks Rank #2 (Buy) and it sports a D for Value and a A for Growth. I love to see that growth divergence, a strong growth score and weak value score as growth investors and value investors are looking for different things. Let’s explore more about this company in this Bull of The Day article.
Description
Weave Communications, Inc. provides a customer communications and engagement software platform in the United States and Canada. Its platform enables small and medium-sized businesses to maximize the value of their customer interactions and minimize the time and effort spent on manual or mundane tasks. The company was formerly known as Recall Solutions, LLC and changed its name to Weave Communications, Inc. in October 2015. Weave Communications, Inc. was founded in 2008 and is headquartered in Lehi, Utah.
Communications Services Sector
There is one sector that has been leading all others this year. It’s the communication services group. If you look at the last 1 day, 1 week, 1 month, 3 month, half year, 1 year and year to date time frames you will see the communication services sits atop all of those measures except for the 1 year time horizon.
Sticking with a winner is an important concept if you want to be a good investor. WEAV has seen a lot of strength lately, including back to back +8% gains over the last few sessions. But the run in this name started back on May 4, 2023 when the stock gained $1.09 to close at $5.35 after a little more than 1.9M shares traded hands.
To me, this looks like the start of a move that takes this stock well into the double digits. The fundamentals show the company could flip from the red to the black at the start of next year and will shine like a beacon in the night and attract a lot of new investors.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For Weave Communications, I see four consecutive beats Zacks Consensus Estimate. That is not that great to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).
Over the last four quarters, the loss per share (all of which were beats) has shrunk from 16 cents to 10 cents to 6 cents to 5 cents. That tells me this company is going to flip to profitability within the next year or so. From past experiences I know that this can be a major boost to the stock price.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher.
Over the last 60 days, earning estimates have increased for WEAV.
The full fiscal year 2023 has increased from a loss of $0.29 to a loss of $0.25 over the last 30 days.
Next fiscal year, has seen estimates move higher to a loss of $0.16 from $0.18 over the same time period.
Those are significant moves higher in a time when so many are calling for recession.
Valuation
No earnings means no PE to lean on. Instead, we look at the price to book and that is a 6.4x multiple and that is right in line with the industry average. The price to sales of 3.5x is dead on the money with the industry average as well. The thing that makes this name stand out is the growth. I see 19% topline growth last quarter and the industry average was 1.2%. That is a huge difference, but it maintains this year with the estimate of 14.1% growth and the industry average coming in at 1.9%. Next year the estimates are calling for WEAV topline growth of 13% while the industry average is calling for 4%.
Summary
Communication services is a hot sector and will probably stay hot. WEAV is probably going to be profitable at the start of next year and is posting growth well ahead of in the industry average. I see this stock doubling or even tripling by the time it is profitable.
Central Garden & Pet is a Zacks Rank #5 (Strong Sell) has seen earnings estimates slide lower recently. Despite a recent beat at the start of the month, the stock has drifted back lower. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.
Description
Central Garden & Pet Company is engaged in the garden and pet industries in the United States. Its segments include Pet and Garden. Its Pet segment includes dog and cat supplies such as dog treats and chews, toys, pet beds and grooming products, waste management and training pads, pet containment; supplies for aquatics, small animals, reptiles and pet birds, including toys, cages and habitats, bedding, food and supplements; products for equine and livestock, animal and household health and insect control products; live fish and small animals as well as outdoor cushions.
These products are sold under brands such as Aqueon, Cadet, Comfort Zone, Farnam, Four Paws K&H Pet Products (K&H), Kaytee, Nylabone and Zilla. Its Garden segment includes lawn and garden consumables such as grass seed, vegetable, flower and herb packet seed; wild bird feed, bird houses and other birding accessories; weed, grass, and other herbicides, insecticide and pesticide products; fertilizers and live plants.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of CENT, I see three beats and one miss of the Zacks Consensus Estimate. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For CENT I see annual estimates moving lower of late.
The current fiscal year consensus number moved lower from $2.64 to $2.35 over the last 60 days.
The next year has moved from $2.82 to $2.55 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a majority of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Additional content:
Good Time to Buy These 3 Top Energy Stocks with EPS Growth
We know that Oil – Energy stocks can take a sudden turn for the good (or bad), making stock picking a risky game. Let’s look at three stocks, with substantial EPS growth over the last four years, which investors may want to consider buying at the current levels.
While many energy companies are struggling with volatility in energy prices in the current market environment, NuStar Energy is at the top of the list of stocks to have reached ‘Buy’ territory.
NuStar is a master limited partnership that engages in the transportation and storage of crude oil as well as refined products in the United States, the Netherlands Antilles, Canada, Mexico and the U.K.
Zacks Rank #1 (Strong Buy) NuStar’s stock price has slightly trended higher in the recent past, with its valuation also supporting that there could be more upside. Trading around $17 a share and 19.33X forward earnings, NS stock trades well below its historical high of 47.99X and at a 6% discount to the median of 20.55X.
NuStar is still down 65.7% in a decade but has climbed 4.7% over the last three months, yet underperforming the benchmark S&P 500 Index. NuStar earnings are expected to drop 5.4% for the current year but turn around 17.2% next year to $1.02 per share. As a matter of fact, 2023 could witness an acceptable 17% increase from the 2019 adjusted EPS of 87 cents a share.
Another candidate for attractive EPS growth is Murphy USA. It belongs to the Zacks Oil and Gas - Refining & Marketing industry, which is currently in the top 47% of over 250 Zacks Industries.
It is a leading independent retailer of motor fuel and convenience merchandise in the United States. MUSA stock currently sports a Zacks Rank of 1, with earnings estimate revisions trending higher for 2023.
Trading at a little over $273 per share and 14.24X forward earnings, MUSA stock has a VGM Score of A. In fact, the company trades 49% below its decade high of 28X and at a 14% discount to the median of 16.58X.
MUSA stock is now up 590.1% over the last decade to comprehensively beat the S&P 500’s increase of 163.5%. But in the recent past, the stock has gained 3.3% over the last three months and declined 2% in the past month, underperforming the benchmark during both periods. In other words, Murphy USA shares appear to be oversold at the moment, considering its top rank and valuation.
MUSA earnings are forecast to dip 31.7% this year and drop another 2.3% in 2024 to $18.76 per share. However, that would still be an outstanding 257% increase from the 2019 adjusted EPS of $5.26 a share.
Rounding out the list is Sunoco LP, which is part of the well-placed Zacks Oil and Gas - Refining & Marketing MLP industry, currently in the top 15% of all Zacks Industries.
Sunoco participates in the transportation and supply phase of the U.S. petroleum market across a number of states. It also focuses on motor fuel distribution to convenience stores, independent dealers and commercial customers.
Sunoco is also Zacks #1 Ranked, with earnings estimate revisions trending higher. Even better, this year’s earnings estimates are up 6.5% over the last 30 days. Moreover, trading at $44.41 per share and 9.62X forward earnings. SUN trades far more conservatively to its ten-year high of 245.52X and at a 26% discount to the median of 12.97X.
While Sunoco stock had gained only 48% over the last decade, it has climbed 23% in the last two years alone to crush the S&P 500’s decline of 0.7%. Over the past month, the stock is down 2.4% though the benchmark has gained 1.9% during the period.
Sunoco earnings are now expected to edge down 1.3% for its current year at $4.62 per share and shed another 2.4% in 2024. But what’s impressive is that this year’s earnings of $4.62 per share are likely to see a neat 64% increase over the last five years, with 2019 EPS at $2.82 a share.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. 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/performance for information about the performance numbers displayed in this press release.
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Weave Communications and Central Garden & Pet have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – May 24, 2023 – Zacks Equity Research shares Weave Communications (WEAV - Free Report) as the Bull of the Day and Central Garden & Pet (CENT - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NuStar Energy (NS - Free Report) , Murphy USA (MUSA - Free Report) and Sunoco LP (SUN - Free Report) .
Here is a synopsis of all five stocks.
Bull of the Day:
Weave Communications is a Zacks Rank #2 (Buy) and it sports a D for Value and a A for Growth. I love to see that growth divergence, a strong growth score and weak value score as growth investors and value investors are looking for different things. Let’s explore more about this company in this Bull of The Day article.
Description
Weave Communications, Inc. provides a customer communications and engagement software platform in the United States and Canada. Its platform enables small and medium-sized businesses to maximize the value of their customer interactions and minimize the time and effort spent on manual or mundane tasks. The company was formerly known as Recall Solutions, LLC and changed its name to Weave Communications, Inc. in October 2015. Weave Communications, Inc. was founded in 2008 and is headquartered in Lehi, Utah.
Communications Services Sector
There is one sector that has been leading all others this year. It’s the communication services group. If you look at the last 1 day, 1 week, 1 month, 3 month, half year, 1 year and year to date time frames you will see the communication services sits atop all of those measures except for the 1 year time horizon.
Sticking with a winner is an important concept if you want to be a good investor. WEAV has seen a lot of strength lately, including back to back +8% gains over the last few sessions. But the run in this name started back on May 4, 2023 when the stock gained $1.09 to close at $5.35 after a little more than 1.9M shares traded hands.
To me, this looks like the start of a move that takes this stock well into the double digits. The fundamentals show the company could flip from the red to the black at the start of next year and will shine like a beacon in the night and attract a lot of new investors.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For Weave Communications, I see four consecutive beats Zacks Consensus Estimate. That is not that great to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).
Over the last four quarters, the loss per share (all of which were beats) has shrunk from 16 cents to 10 cents to 6 cents to 5 cents. That tells me this company is going to flip to profitability within the next year or so. From past experiences I know that this can be a major boost to the stock price.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher.
Over the last 60 days, earning estimates have increased for WEAV.
The full fiscal year 2023 has increased from a loss of $0.29 to a loss of $0.25 over the last 30 days.
Next fiscal year, has seen estimates move higher to a loss of $0.16 from $0.18 over the same time period.
Those are significant moves higher in a time when so many are calling for recession.
Valuation
No earnings means no PE to lean on. Instead, we look at the price to book and that is a 6.4x multiple and that is right in line with the industry average. The price to sales of 3.5x is dead on the money with the industry average as well. The thing that makes this name stand out is the growth. I see 19% topline growth last quarter and the industry average was 1.2%. That is a huge difference, but it maintains this year with the estimate of 14.1% growth and the industry average coming in at 1.9%. Next year the estimates are calling for WEAV topline growth of 13% while the industry average is calling for 4%.
Summary
Communication services is a hot sector and will probably stay hot. WEAV is probably going to be profitable at the start of next year and is posting growth well ahead of in the industry average. I see this stock doubling or even tripling by the time it is profitable.
Bear of the Day:
Central Garden & Pet is a Zacks Rank #5 (Strong Sell) has seen earnings estimates slide lower recently. Despite a recent beat at the start of the month, the stock has drifted back lower. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.
Description
Central Garden & Pet Company is engaged in the garden and pet industries in the United States. Its segments include Pet and Garden. Its Pet segment includes dog and cat supplies such as dog treats and chews, toys, pet beds and grooming products, waste management and training pads, pet containment; supplies for aquatics, small animals, reptiles and pet birds, including toys, cages and habitats, bedding, food and supplements; products for equine and livestock, animal and household health and insect control products; live fish and small animals as well as outdoor cushions.
These products are sold under brands such as Aqueon, Cadet, Comfort Zone, Farnam, Four Paws K&H Pet Products (K&H), Kaytee, Nylabone and Zilla. Its Garden segment includes lawn and garden consumables such as grass seed, vegetable, flower and herb packet seed; wild bird feed, bird houses and other birding accessories; weed, grass, and other herbicides, insecticide and pesticide products; fertilizers and live plants.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of CENT, I see three beats and one miss of the Zacks Consensus Estimate. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For CENT I see annual estimates moving lower of late.
The current fiscal year consensus number moved lower from $2.64 to $2.35 over the last 60 days.
The next year has moved from $2.82 to $2.55 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a majority of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Additional content:
Good Time to Buy These 3 Top Energy Stocks with EPS Growth
We know that Oil – Energy stocks can take a sudden turn for the good (or bad), making stock picking a risky game. Let’s look at three stocks, with substantial EPS growth over the last four years, which investors may want to consider buying at the current levels.
While many energy companies are struggling with volatility in energy prices in the current market environment, NuStar Energy is at the top of the list of stocks to have reached ‘Buy’ territory.
NuStar is a master limited partnership that engages in the transportation and storage of crude oil as well as refined products in the United States, the Netherlands Antilles, Canada, Mexico and the U.K.
Zacks Rank #1 (Strong Buy) NuStar’s stock price has slightly trended higher in the recent past, with its valuation also supporting that there could be more upside. Trading around $17 a share and 19.33X forward earnings, NS stock trades well below its historical high of 47.99X and at a 6% discount to the median of 20.55X.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NuStar is still down 65.7% in a decade but has climbed 4.7% over the last three months, yet underperforming the benchmark S&P 500 Index. NuStar earnings are expected to drop 5.4% for the current year but turn around 17.2% next year to $1.02 per share. As a matter of fact, 2023 could witness an acceptable 17% increase from the 2019 adjusted EPS of 87 cents a share.
Another candidate for attractive EPS growth is Murphy USA. It belongs to the Zacks Oil and Gas - Refining & Marketing industry, which is currently in the top 47% of over 250 Zacks Industries.
It is a leading independent retailer of motor fuel and convenience merchandise in the United States. MUSA stock currently sports a Zacks Rank of 1, with earnings estimate revisions trending higher for 2023.
Trading at a little over $273 per share and 14.24X forward earnings, MUSA stock has a VGM Score of A. In fact, the company trades 49% below its decade high of 28X and at a 14% discount to the median of 16.58X.
MUSA stock is now up 590.1% over the last decade to comprehensively beat the S&P 500’s increase of 163.5%. But in the recent past, the stock has gained 3.3% over the last three months and declined 2% in the past month, underperforming the benchmark during both periods. In other words, Murphy USA shares appear to be oversold at the moment, considering its top rank and valuation.
MUSA earnings are forecast to dip 31.7% this year and drop another 2.3% in 2024 to $18.76 per share. However, that would still be an outstanding 257% increase from the 2019 adjusted EPS of $5.26 a share.
Rounding out the list is Sunoco LP, which is part of the well-placed Zacks Oil and Gas - Refining & Marketing MLP industry, currently in the top 15% of all Zacks Industries.
Sunoco participates in the transportation and supply phase of the U.S. petroleum market across a number of states. It also focuses on motor fuel distribution to convenience stores, independent dealers and commercial customers.
Sunoco is also Zacks #1 Ranked, with earnings estimate revisions trending higher. Even better, this year’s earnings estimates are up 6.5% over the last 30 days. Moreover, trading at $44.41 per share and 9.62X forward earnings. SUN trades far more conservatively to its ten-year high of 245.52X and at a 26% discount to the median of 12.97X.
While Sunoco stock had gained only 48% over the last decade, it has climbed 23% in the last two years alone to crush the S&P 500’s decline of 0.7%. Over the past month, the stock is down 2.4% though the benchmark has gained 1.9% during the period.
Sunoco earnings are now expected to edge down 1.3% for its current year at $4.62 per share and shed another 2.4% in 2024. But what’s impressive is that this year’s earnings of $4.62 per share are likely to see a neat 64% increase over the last five years, with 2019 EPS at $2.82 a share.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. 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/performance for information about the performance numbers displayed in this press release.