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Beat the Market the Zacks Way: Vertiv, Costco, Sonnet BioTherapeutics in Focus
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The three most widely followed indexes closed last week in the green. The Dow Jones Industrial Average advanced 2%, while Nasdaq Composite and the S&P 500 gained 2.2% and 2.4%, respectively.
Trade throughout the week was buoyant by the release of encouraging economic numbers suggestive of a resilient economy, especially in the housing sector. Consumer confidence also witnessed remarkable growth, thereby giving the impression that consumers are yet to buy into the outlook of an economic slowdown just as yet. Tech, which has been a guiding light, took a hit late in the week with talks of further export restrictions of semiconductors to China.
On the flip side, Fed officials continued to suggest that further interest rate hikes are on the way because inflation is still not sufficiently in check, and investors are currently pricing in a probable 25 bps rate hike from the next Fed meeting.
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:
Sonnet BioTherapeutics and Snap-on Surge Following Zacks Rank Upgrade
Shares of Sonnet BioTherapeutics Holdings, Inc. (SONN - Free Report) have soared 60.8% (versus the S&P 500’s 6.9% increase) since it was upgraded to a Zacks Rank #2 (Buy) on Apr 21.
Another stock, Snap-on Incorporated (SNA - Free Report) , which was also upgraded to a Zacks Rank #2 on Apr 20, has returned 20.2% (versus the S&P 500’s 6.3% increase) since then.
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 (Strong Buy) stocks returned +2.7% this year (through May 15) versus +7.69% for the S&P 500 Index.
Zacks Recommendation Upgrade Drives Vertiv and Unum Higher
Shares of Vertiv Holdings (VRT - Free Report) and Unum Group (UNM - Free Report) have advanced 97.1% (versus the S&P 500’s 6.3% rise) and 19.2% (versus the S&P 500’s 6.5% rise) since their Zacks Recommendation was upgraded to Outperform on Apr 18 and Apr 17, 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 Lam Research, Arcosa Shoot Up
Shares of Lam Research Corporation (LRCX - Free Report) , which belongs to the Zacks Focus List, have risen 30.2% over the past 12 weeks. The stock was added to the Focus List on Dec 5, 2016. Another Focus-List holding, Arcosa, Inc. (ACA - Free Report) , which was added to the portfolio on Jan 6, 2020, has returned 29.1% over the past 12 weeks. The S&P 500 has gained 7.4% 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 +9.14% in 2023 (through May 31) versus +9.64% for the S&P 500 Index. In 2022, the portfolio produced -15.2% versus the S&P 500 Index’s -17.96%.
Since 2004, the Focus List portfolio has produced an annualized return of +10.75% through May 31, 2023. This compares to a +9.2% 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 Costco and Church & Dwight Make Significant Gains
Costco Wholesale Corporation (COST - Free Report) , a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 10.8% over the past 12 weeks. Church & Dwight Co., Inc. (CHD - Free Report) has followed Costco with 10.6% returns.
ECAP, which consists of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks, returned +3.05% in 2023 (through May 31) versus +9.64% for the S&P 500 Index. The portfolio returned -4.7% in 2022 versus the S&P 500 Index’s -17.96%.
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 Fastenal and Illinois Tool Works Outperform Peers
Fastenal Company (FAST - Free Report) , which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 14.6% over the past 12 weeks. Another ECDP stock, Illinois Tool Works Inc. (ITW - Free Report) , has climbed 9.9% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance.
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 -3.2% in 2023 (through May 31) versus +9.64% for the S&P 500 Index and +1.39% for the ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) . The portfolio returned -2.3% in 2022 versus -17.96% for the S&P 500 Index and -8.34% for NOBL.
Zacks Top 10 Stocks — Celsius Delivers Solid Returns
Celsius Holdings, Inc. (CELH - Free Report) , from the Zacks Top 10 Stocks for 2023, has gained 43.4% year to date, which compares to a 15.5% gain for the S&P 500 Index.
The portfolio returned +7.12% through the end of May 2023 versus +9.64% for the S&P 500 (the equal-weighted index, a more appropriate benchmark, returned -0.63% in the same period). The portfolio returned -15.8% in 2022 versus -18.1% 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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Beat the Market the Zacks Way: Vertiv, Costco, Sonnet BioTherapeutics in Focus
The three most widely followed indexes closed last week in the green. The Dow Jones Industrial Average advanced 2%, while Nasdaq Composite and the S&P 500 gained 2.2% and 2.4%, respectively.
Trade throughout the week was buoyant by the release of encouraging economic numbers suggestive of a resilient economy, especially in the housing sector. Consumer confidence also witnessed remarkable growth, thereby giving the impression that consumers are yet to buy into the outlook of an economic slowdown just as yet. Tech, which has been a guiding light, took a hit late in the week with talks of further export restrictions of semiconductors to China.
On the flip side, Fed officials continued to suggest that further interest rate hikes are on the way because inflation is still not sufficiently in check, and investors are currently pricing in a probable 25 bps rate hike from the next Fed meeting.
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:
Sonnet BioTherapeutics and Snap-on Surge Following Zacks Rank Upgrade
Shares of Sonnet BioTherapeutics Holdings, Inc. (SONN - Free Report) have soared 60.8% (versus the S&P 500’s 6.9% increase) since it was upgraded to a Zacks Rank #2 (Buy) on Apr 21.
Another stock, Snap-on Incorporated (SNA - Free Report) , which was also upgraded to a Zacks Rank #2 on Apr 20, has returned 20.2% (versus the S&P 500’s 6.3% increase) since then.
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 (Strong Buy) stocks returned +2.7% this year (through May 15) versus +7.69% for the S&P 500 Index.
Check Sonnet’s historical EPS and Sales here>>>
Check Snap-on’s historical EPS and Sales here>>>
Image Source: Zacks Investment Research
Zacks Recommendation Upgrade Drives Vertiv and Unum Higher
Shares of Vertiv Holdings (VRT - Free Report) and Unum Group (UNM - Free Report) have advanced 97.1% (versus the S&P 500’s 6.3% rise) and 19.2% (versus the S&P 500’s 6.5% rise) since their Zacks Recommendation was upgraded to Outperform on Apr 18 and Apr 17, 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 Lam Research, Arcosa Shoot Up
Shares of Lam Research Corporation (LRCX - Free Report) , which belongs to the Zacks Focus List, have risen 30.2% over the past 12 weeks. The stock was added to the Focus List on Dec 5, 2016. Another Focus-List holding, Arcosa, Inc. (ACA - Free Report) , which was added to the portfolio on Jan 6, 2020, has returned 29.1% over the past 12 weeks. The S&P 500 has gained 7.4% 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 +9.14% in 2023 (through May 31) versus +9.64% for the S&P 500 Index. In 2022, the portfolio produced -15.2% versus the S&P 500 Index’s -17.96%.
Since 2004, the Focus List portfolio has produced an annualized return of +10.75% through May 31, 2023. This compares to a +9.2% 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 Costco and Church & Dwight Make Significant Gains
Costco Wholesale Corporation (COST - Free Report) , a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 10.8% over the past 12 weeks. Church & Dwight Co., Inc. (CHD - Free Report) has followed Costco with 10.6% returns.
ECAP, which consists of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks, returned +3.05% in 2023 (through May 31) versus +9.64% for the S&P 500 Index. The portfolio returned -4.7% in 2022 versus the S&P 500 Index’s -17.96%.
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 Fastenal and Illinois Tool Works Outperform Peers
Fastenal Company (FAST - Free Report) , which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 14.6% over the past 12 weeks. Another ECDP stock, Illinois Tool Works Inc. (ITW - Free Report) , has climbed 9.9% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance.
Check Fastenal’s dividend history here>>>
Check Illinois Tool Works’ 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 -3.2% in 2023 (through May 31) versus +9.64% for the S&P 500 Index and +1.39% for the ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) . The portfolio returned -2.3% in 2022 versus -17.96% for the S&P 500 Index and -8.34% for NOBL.
Click here to access this portfolio on Zacks Advisor Tools.
Zacks Top 10 Stocks — Celsius Delivers Solid Returns
Celsius Holdings, Inc. (CELH - Free Report) , from the Zacks Top 10 Stocks for 2023, has gained 43.4% year to date, which compares to a 15.5% gain for the S&P 500 Index.
The portfolio returned +7.12% through the end of May 2023 versus +9.64% for the S&P 500 (the equal-weighted index, a more appropriate benchmark, returned -0.63% in the same period). The portfolio returned -15.8% in 2022 versus -18.1% 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.