We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
MicroStrategy and Arch Resources have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – July 3, 2023 – Zacks Equity Research shares MicroStrategy Inc. (MSTR - Free Report) as the Bull of the Day and Arch Resources Inc. (ARCH - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on FedEx Corporation (FDX - Free Report) and United Parcel Service, Inc. (UPS - Free Report) .
Zacks Rank #1 (Strong Buy) stock MicroStrategy Inc. is a software company that specializes in business intelligence (BI) and analytics. MicroStrategy provides a comprehensive platform that enables organizations to analyze and visualize their data to make informed business decisions. The company's tools allow for data discovery and exploration, interactive dashboards, data visualization, and reporting capabilities. Before its initial public offering (IPO) in 1998, MicroStrategy signed its most prominent client, the fast-food giant McDonald's.
Adopting the "Bitcoin Standard"
For years, Michael Saylor had been concerned that the monetary system has been expanding by approximately 7% per year while inflation tends to rise at a clip of about 2% annually. In late 2020, Michael Saylor, MSTR's founder and CEO at the time (now Executive Chairman), decided to take action and adopt what he refers to as the "Bitcoin Standard."
Michael Saylor, who is an eccentric MIT graduate, entrepreneur, and business executive, became fascinated with the uniqueness of Bitcoin and saw it as an alternative to the current monetary system. During an interview, Saylor reasoned, "What we (MSTR - Free Report) were doing was that we were inverting the balance sheet such that we're floating on a Bitcoin sail, on a crypto sail, if you will, and as the liquidity and the monetary system gets pumped up, we want it to float, rather than sink, on that pool of liquidity".
A lot has changed since Saylor's initial Bitcoin-inspired epiphany. MSTR now owns more than 140,000 Bitcoin worth roughly $4 billion. In other words, MSTR has morphed into a Bitcoin proxy – which is not necessarily a bad thing. Despite Bitcoin being well off its all-time highs and the "crypto winter", MSTR has outperformed the S&P 500 handsomely in the past five years.
The Narrative Is Changing
Like any new idea, Bitcoin has been criticized. In recent years, investors have shown skepticism that Bitcoin had little to no real-world use, institutional adoption, or regulatory clarity. In recent weeks, many of these concerns are diminishing, including:
Real-world use: More international citizens in countries like Argentina and Turkey are using Bitcoin to stave off hyper-inflation than ever before. The proof? While Bitcoin remains well off its highs domestically, BTC recently hit new highs versus Argentina and Turkey's currencies – a sign that global, real-world adoption is real.
Institutional Adoption: In just the last month, some of the largest asset managers in the world (BlackRock, Fidelity, and others) announced their plans to enter the industry.
Regulatory Clarity: Though the SEC's lawsuit against Coinbase (COIN) is a short-term hurdle for the company, the outcome may be bullish for Bitcoin over the long term because it will provide the industry with some much-needed regulatory guardrails.
Healthy Earnings Estimates
Wall Street expects EPS to grow at a triple-digit clip over the next three quarters.
Bullish Technical Pattern
On Friday, a negative headline from the SEC about inadequate Bitcoin ETF filings hit crypto-related stocks. However, MSTR shook off the news and rebounded quickly – a sign of resilience. MSTR is about to break out of a nearly one-year long base structure. As the old saying goes, "The longer the base, the higher in space."
Conclusion
The bullish Bitcoin catalysts and big EPS estimates set up a dynamic duo for MSTR into year-end. If MSTR can clear the $350 level on a closing basis over the next few days, the stock has explosive potential.
Missouri-based Zacks Rank #5 stock (Strong Sell) Arch Resources Inc. is one of the leading coal producers in the world and operates nine mines across the major coal basins of the United States. While Arch's mining facilities are located in the United States, it exports coal worldwide. In 2016 the company filed for bankruptcy but emerged stronger and grew its earnings as coal prices roared back. However, in 2023 and 2024, earnings are expected to trend lower.
Emissions Concerns to Suck the Energy Out of ARCH
Though Arch Resources is a well-run coal company, its earnings will likely be negatively impacted by climate change concerns and the world's meteoric shift to clean fuel sources from traditional sources. Unfortunately for Arch, major macro-shifts in the energy economy are out of the company's control. Presently, natural gas and renewable energy are the choices over coal for energy needs. Furthermore, cheap shale gas, technological advancements in clean energy, and government incentives make matters worse for ARCH.
Coal Industry
Currently, the Coal Industry is ranked 245 out of 251 – putting it in the bottom 2% of all industries tracked by Zacks. Studies by Zacks indicate that lowly ranked industry groups like the coal industry tend to underperform dramatically. Beyond the industry concerns, the coal industry is intensely competitive, with several bids for each new coal contract. Over the past year, ARCH is lower by 21% while its peer group is flat – a sign of dramatic underperformance.
Patchy Earnings Surprise History
Arch has produced earnings well below Zacks Consensus Estimates in seven of the past thirteen quarters.
Bear Flag
While the broader U.S. equities market has soared in recent months, ARCH has down-trended. Shares are now carving out a bear flag pattern after a short relief rally. If shares find resistance at the declining 50-day moving average, it could spell more downside.
Conclusion
Arch Resources faces a weak industry, high-competitive environment, and fundamental challenges. To make matters worse for ARCH, the stock shows relative weakness versus the broader equity market and is carving out a bear flag pattern. Avoid ARCH for now.
Additional content:
Air Freight & Cargo Stocks with Solid Dividend Yield
The Zacks Transportation - Air Freight and Cargo industry continues to grapple with issues like supply-chain disruptions and higher fuel costs. These are likely to keep the bottom line of companies in this industrial cohort under pressure.
Despite these challenges, the industry has gained 12.1% year to date compared with the S&P 500 Index's 15.1% appreciation and 9.4% growth of the broader Zacks Transportation sector.
We believe the buoyant e-commerce demand scenario is a huge positive for the industry participants. Even though economies have reopened, consumers' thirst for online shopping is rampant. High shipping rates should also drive revenues.
Given this backdrop, let's focus on a couple of air freight and cargo stocks, FedEx Corporation and United Parcel Service, Inc., which have consistently hiked dividends, thus highlighting their pro-shareholder stance.
Stocks with a strong history of dividend growth belong to mature companies, which are less susceptible to large swings in the market and act as a hedge against economic or political uncertainty and stock market volatility. At the same time, they offer downside protection with their consistent increase in payouts.
Additionally, these companies have superior fundamentals. These include a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics.
How to Pick Stocks With Solid Dividend Payouts?
In order to choose some of the best dividend stocks from the aforementioned industry, we have run the Zacks Stock Screener to identify stocks with a dividend yield of more than 2% and a sustainable dividend payout ratio of less than 60%. Each of these stocks mentioned below carries a Zacks Rank #3 (Hold).You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
FedEx: Based in Memphis, TN, FedEx provides transportation, e-commerce, and business services in the United States and internationally. Currently, the company has a market capitalization of $62.02 billion.
FDX paid a quarterly dividend of $1.26 ($5.04 annualized) per share, which gives it a 2.03% yield at the current stock price. This company's payout ratio is 31% of its earnings at present. The five-year dividend growth rate is 12.72%. (Check FedEx's dividend history here)
FedEx has been consistently making efforts to reward its shareholders through dividends and share buybacks, which are encouraging. During fiscal 2023, FedEx paid dividends worth $1.2 billion and repurchased shares worth $1.5 billion. In fiscal 2022, FedEx paid dividends worth $793 million (higher than the $686 million dividend payout in fiscal 2021). Such shareholder-friendly moves indicate the company's commitment to creating value for shareholders and underline its confidence in its business. These initiatives not only instill investors' confidence but positively impact earnings per share.
United Parcel: Headquartered in Atlanta, GA, United Parcel provides transportation and delivery, distribution, contract logistics, ocean freight, airfreight, customs brokerage and insurance services. Currently, it has a market capitalization of $152.02 billion.
UPS paid out a quarterly dividend of $1.62 ($6.48 annualized) per share, which gives it a 3.69% yield at the current stock price. This company's payout ratio is 54% of its earnings at present. The five-year dividend growth rate is 12.60%. (Check United Parcel's dividend history here).
UPS' strong free cash flow-generating ability supports its shareholder-friendly activities. In first-quarter 2023, UPS generated a free cash flow of $2,357 million. In 2022, UPS generated free cash flow of $9,038 million. Robust free cash flow generation is a major positive, leading to an uptick in shareholder-friendly activities.
Notably, UPS paid dividends worth $1,348 million and repurchased shares worth $751 million in first-quarter 2023. In 2022, UPS paid dividends worth $5,114 million and repurchased shares worth $3,500 million. In 2023, UPS expects to make dividend payments of $5.4 billion and repurchase shares worth $3 billion.
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/performancefor information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
MicroStrategy and Arch Resources have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – July 3, 2023 – Zacks Equity Research shares MicroStrategy Inc. (MSTR - Free Report) as the Bull of the Day and Arch Resources Inc. (ARCH - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on FedEx Corporation (FDX - Free Report) and United Parcel Service, Inc. (UPS - Free Report) .
Here is a synopsis of all four stocks:
Bull of the Day:
Company Overview
Zacks Rank #1 (Strong Buy) stock MicroStrategy Inc. is a software company that specializes in business intelligence (BI) and analytics. MicroStrategy provides a comprehensive platform that enables organizations to analyze and visualize their data to make informed business decisions. The company's tools allow for data discovery and exploration, interactive dashboards, data visualization, and reporting capabilities. Before its initial public offering (IPO) in 1998, MicroStrategy signed its most prominent client, the fast-food giant McDonald's.
Adopting the "Bitcoin Standard"
For years, Michael Saylor had been concerned that the monetary system has been expanding by approximately 7% per year while inflation tends to rise at a clip of about 2% annually. In late 2020, Michael Saylor, MSTR's founder and CEO at the time (now Executive Chairman), decided to take action and adopt what he refers to as the "Bitcoin Standard."
Michael Saylor, who is an eccentric MIT graduate, entrepreneur, and business executive, became fascinated with the uniqueness of Bitcoin and saw it as an alternative to the current monetary system. During an interview, Saylor reasoned, "What we (MSTR - Free Report) were doing was that we were inverting the balance sheet such that we're floating on a Bitcoin sail, on a crypto sail, if you will, and as the liquidity and the monetary system gets pumped up, we want it to float, rather than sink, on that pool of liquidity".
A lot has changed since Saylor's initial Bitcoin-inspired epiphany. MSTR now owns more than 140,000 Bitcoin worth roughly $4 billion. In other words, MSTR has morphed into a Bitcoin proxy – which is not necessarily a bad thing. Despite Bitcoin being well off its all-time highs and the "crypto winter", MSTR has outperformed the S&P 500 handsomely in the past five years.
The Narrative Is Changing
Like any new idea, Bitcoin has been criticized. In recent years, investors have shown skepticism that Bitcoin had little to no real-world use, institutional adoption, or regulatory clarity. In recent weeks, many of these concerns are diminishing, including:
Real-world use: More international citizens in countries like Argentina and Turkey are using Bitcoin to stave off hyper-inflation than ever before. The proof? While Bitcoin remains well off its highs domestically, BTC recently hit new highs versus Argentina and Turkey's currencies – a sign that global, real-world adoption is real.
Institutional Adoption: In just the last month, some of the largest asset managers in the world (BlackRock, Fidelity, and others) announced their plans to enter the industry.
Regulatory Clarity: Though the SEC's lawsuit against Coinbase (COIN) is a short-term hurdle for the company, the outcome may be bullish for Bitcoin over the long term because it will provide the industry with some much-needed regulatory guardrails.
Healthy Earnings Estimates
Wall Street expects EPS to grow at a triple-digit clip over the next three quarters.
Bullish Technical Pattern
On Friday, a negative headline from the SEC about inadequate Bitcoin ETF filings hit crypto-related stocks. However, MSTR shook off the news and rebounded quickly – a sign of resilience. MSTR is about to break out of a nearly one-year long base structure. As the old saying goes, "The longer the base, the higher in space."
Conclusion
The bullish Bitcoin catalysts and big EPS estimates set up a dynamic duo for MSTR into year-end. If MSTR can clear the $350 level on a closing basis over the next few days, the stock has explosive potential.
Bear of the Day:
Company Overview
Missouri-based Zacks Rank #5 stock (Strong Sell) Arch Resources Inc. is one of the leading coal producers in the world and operates nine mines across the major coal basins of the United States. While Arch's mining facilities are located in the United States, it exports coal worldwide. In 2016 the company filed for bankruptcy but emerged stronger and grew its earnings as coal prices roared back. However, in 2023 and 2024, earnings are expected to trend lower.
Emissions Concerns to Suck the Energy Out of ARCH
Though Arch Resources is a well-run coal company, its earnings will likely be negatively impacted by climate change concerns and the world's meteoric shift to clean fuel sources from traditional sources. Unfortunately for Arch, major macro-shifts in the energy economy are out of the company's control. Presently, natural gas and renewable energy are the choices over coal for energy needs. Furthermore, cheap shale gas, technological advancements in clean energy, and government incentives make matters worse for ARCH.
Coal Industry
Currently, the Coal Industry is ranked 245 out of 251 – putting it in the bottom 2% of all industries tracked by Zacks. Studies by Zacks indicate that lowly ranked industry groups like the coal industry tend to underperform dramatically. Beyond the industry concerns, the coal industry is intensely competitive, with several bids for each new coal contract. Over the past year, ARCH is lower by 21% while its peer group is flat – a sign of dramatic underperformance.
Patchy Earnings Surprise History
Arch has produced earnings well below Zacks Consensus Estimates in seven of the past thirteen quarters.
Bear Flag
While the broader U.S. equities market has soared in recent months, ARCH has down-trended. Shares are now carving out a bear flag pattern after a short relief rally. If shares find resistance at the declining 50-day moving average, it could spell more downside.
Conclusion
Arch Resources faces a weak industry, high-competitive environment, and fundamental challenges. To make matters worse for ARCH, the stock shows relative weakness versus the broader equity market and is carving out a bear flag pattern. Avoid ARCH for now.
Additional content:
Air Freight & Cargo Stocks with Solid Dividend Yield
The Zacks Transportation - Air Freight and Cargo industry continues to grapple with issues like supply-chain disruptions and higher fuel costs. These are likely to keep the bottom line of companies in this industrial cohort under pressure.
Despite these challenges, the industry has gained 12.1% year to date compared with the S&P 500 Index's 15.1% appreciation and 9.4% growth of the broader Zacks Transportation sector.
We believe the buoyant e-commerce demand scenario is a huge positive for the industry participants. Even though economies have reopened, consumers' thirst for online shopping is rampant. High shipping rates should also drive revenues.
Given this backdrop, let's focus on a couple of air freight and cargo stocks, FedEx Corporation and United Parcel Service, Inc., which have consistently hiked dividends, thus highlighting their pro-shareholder stance.
Stocks with a strong history of dividend growth belong to mature companies, which are less susceptible to large swings in the market and act as a hedge against economic or political uncertainty and stock market volatility. At the same time, they offer downside protection with their consistent increase in payouts.
Additionally, these companies have superior fundamentals. These include a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics.
How to Pick Stocks With Solid Dividend Payouts?
In order to choose some of the best dividend stocks from the aforementioned industry, we have run the Zacks Stock Screener to identify stocks with a dividend yield of more than 2% and a sustainable dividend payout ratio of less than 60%. Each of these stocks mentioned below carries a Zacks Rank #3 (Hold).You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
FedEx: Based in Memphis, TN, FedEx provides transportation, e-commerce, and business services in the United States and internationally. Currently, the company has a market capitalization of $62.02 billion.
FDX paid a quarterly dividend of $1.26 ($5.04 annualized) per share, which gives it a 2.03% yield at the current stock price. This company's payout ratio is 31% of its earnings at present. The five-year dividend growth rate is 12.72%. (Check FedEx's dividend history here)
FedEx has been consistently making efforts to reward its shareholders through dividends and share buybacks, which are encouraging. During fiscal 2023, FedEx paid dividends worth $1.2 billion and repurchased shares worth $1.5 billion. In fiscal 2022, FedEx paid dividends worth $793 million (higher than the $686 million dividend payout in fiscal 2021). Such shareholder-friendly moves indicate the company's commitment to creating value for shareholders and underline its confidence in its business. These initiatives not only instill investors' confidence but positively impact earnings per share.
United Parcel: Headquartered in Atlanta, GA, United Parcel provides transportation and delivery, distribution, contract logistics, ocean freight, airfreight, customs brokerage and insurance services. Currently, it has a market capitalization of $152.02 billion.
UPS paid out a quarterly dividend of $1.62 ($6.48 annualized) per share, which gives it a 3.69% yield at the current stock price. This company's payout ratio is 54% of its earnings at present. The five-year dividend growth rate is 12.60%. (Check United Parcel's dividend history here).
UPS' strong free cash flow-generating ability supports its shareholder-friendly activities. In first-quarter 2023, UPS generated a free cash flow of $2,357 million. In 2022, UPS generated free cash flow of $9,038 million. Robust free cash flow generation is a major positive, leading to an uptick in shareholder-friendly activities.
Notably, UPS paid dividends worth $1,348 million and repurchased shares worth $751 million in first-quarter 2023. In 2022, UPS paid dividends worth $5,114 million and repurchased shares worth $3,500 million. In 2023, UPS expects to make dividend payments of $5.4 billion and repurchase shares worth $3 billion.
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 >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
https://www.zacks.com
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/performancefor information about the performance numbers displayed in this press release.