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Beat the Market the Zacks Way: Shopify, Fusion Pharma, 3M in Focus
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All of the three widely followed indexes closed a ninth straight winning week to close off the year. The Dow Jones Industrial Average, the S&P 500 and the tech-heavy Nasdaq Composite gained 0.8%, 0.3% and 0.1%, respectively.
During the week, investor mood remained upbeat even as movement remained slow in the markets due to year-end profit booking. Markets closed off a blockbuster year on the back of a resurgent and AI-driven tech sector. Inflation came down to manageable levels from four-decade highs touched in 2022. December was especially a significant month, with the Fed finally signaling interest rate cuts, no less than three, in 2024. For the year, Nasdaq, S&P 500 and Dow gained 43.4%, 24.2% and 13.7%, respectively.
The Fed currently expects interest rates to be 4.6% by the end of 2024, down from the 5.1% it had projected earlier. On cue, market participants are expecting rate cuts as early as March 2024.
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:
Fusion Pharma and Arrow Financial Surge Following Zacks Rank Upgrade
Shares of Fusion Pharmaceuticals Inc. (FUSN - Free Report) have gained 128.3% (versus the S&P 500’s 15% increase) since it was upgraded to a Zacks Rank #2 (Buy) on October 27.
Another stock, Arrow Financial Corporation (AROW - Free Report) , which was upgraded to a Zacks Rank #1 (Strong Buy) on October 26, has returned 40.2% (versus the S&P 500’s 13.5% 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.
A hypothetical portfolio of Zacks Rank #1 (Strong Buy) stocks returned +12.02% this year (through September 4th) vs. +18.2% for the S&P 500 index and +7.6% for the equal-weight S&P 500 index. The portfolio of Zacks Rank #1 stocks is an equal-weight portfolio, while the S&P 500 index is a market-cap-weighted index that has been notably distorted by the strong recent performance of mega-cap stocks.
We are not trying to cherry-pick here. But since this Zacks Model portfolio, consisting of Zacks Rank #1 stocks, is an equal-weight portfolio, the equal-weight S&P 500 index is the appropriate benchmark for comparison. Looked at this way, this portfolio has outperformed the index this year.
The Zacks Model Portfolio - consisting of Zacks Rank #1 stocks – has outperformed the S&P index by more than 13 percentage points since 1988 (Through September 4th, 2023, the Zacks # 1 Rank stocks has generated an annualized return of +24.17% since 1988 vs. +10.82% for the S&P 500 index).You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Zacks Recommendation Upgrades Gap and FinWise Bancorp Higher
Shares of The Gap, Inc. (GPS - Free Report) and FinWise Bancorp (FINW - Free Report) have advanced 76.6% (versus the S&P 500’s 12.3% rise) and 64.5% (versus the S&P 500’s 12.2% rise) since their Zacks Recommendation was upgraded to Outperform on October 24 and October 23, 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 Block, Lululemon Shoot Up
Shares of Block, Inc. (SQ - Free Report) , which belongs to the Zacks Focus List, have gained 81.4% over the past 12 weeks. The stock was added to the Focus List on March 28, 2017. Another Focus-List holding, Lululemon Athletica Inc. (LULU - Free Report) , which was added to the portfolio on December 12, 2017, has returned 41.9% over the past 12 weeks. The S&P 500 has advanced 10.7% over this period.
The 50-stock Zacks Focus List model portfolio returned +22.3% in 2023 (through July 31st) vs. +20.6% for the S&P 500 index and +10.5% for the equal-weight S&P 500 index. In 2022, the portfolio produced -15.2% vs. the S&P 500 index’s -17.96%.
Since 2004, the Focus List portfolio has produced an annualized return of +11.27% through July 31st, 2023. This compares to a +9.65% annualized return for the S&P 500 index in the same time period.
On a rolling one-, three- and five-year bases, the Zacks Focus List returned +21.76%, +16.33%, and +12.54% vs. +12.99%, +13.71% and +12.19% for the S&P 500 index, respectively.
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 Rollins and Fiserv Make Significant Gains
Rollins, Inc. (ROL - Free Report) , a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 21.8% over the past 12 weeks. Fiserv, Inc. (FI - Free Report) has followed Rollins with 17.4% returns.
ECAP, which consists of 30 concentrated, ultra-defensive, long-term Buy-and-Hold stocks, has returned +6.67% in 2023 (through June 30) versus +16.90% 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 3M and Home Depot Outperform Peers
3M Company (MMM - Free Report) , which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 24.5% over the past 12 weeks. Another ECDP stock, The Home Depot, Inc. (HD - Free Report) , has climbed 18.8% 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 has returned +0.18% in 2023 (through June 30) versus +16.90% for the S&P 500 Index. The portfolio returned -2.3% in 2022 versus -17.96% for the S&P 500 Index and -8.34% for the ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) .
Zacks Top 10 Stocks — Shopify Delivers Solid Returns
Shopify Inc. (SHOP - Free Report) , from the Zacks Top 10 Stocks for 2023, has surged 124.4% over the past year, which compares to a 26.1% increase for the S&P 500 Index.
The portfolio returned +16.16% through the end of July 2023 vs. +20.64% for the S&P 500 index and +10.73% for the equal-weighted version of the index. The portfolio returned -15.8% in 2022 vs. -18.1% for the S&P 500 index. Since 2012, the Top 10 portfolio has generated an annualized return of +22.78% vs. +13.65% for the S&P 500 index.
Since the start of 2012 through July 31, 2023, the Zacks Top 10 Stocks have produced a cumulative return of +977.47% vs. +340.35% cumulative return for the S&P 500 index.
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Beat the Market the Zacks Way: Shopify, Fusion Pharma, 3M in Focus
All of the three widely followed indexes closed a ninth straight winning week to close off the year. The Dow Jones Industrial Average, the S&P 500 and the tech-heavy Nasdaq Composite gained 0.8%, 0.3% and 0.1%, respectively.
During the week, investor mood remained upbeat even as movement remained slow in the markets due to year-end profit booking. Markets closed off a blockbuster year on the back of a resurgent and AI-driven tech sector. Inflation came down to manageable levels from four-decade highs touched in 2022. December was especially a significant month, with the Fed finally signaling interest rate cuts, no less than three, in 2024. For the year, Nasdaq, S&P 500 and Dow gained 43.4%, 24.2% and 13.7%, respectively.
The Fed currently expects interest rates to be 4.6% by the end of 2024, down from the 5.1% it had projected earlier. On cue, market participants are expecting rate cuts as early as March 2024.
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:
Fusion Pharma and Arrow Financial Surge Following Zacks Rank Upgrade
Shares of Fusion Pharmaceuticals Inc. (FUSN - Free Report) have gained 128.3% (versus the S&P 500’s 15% increase) since it was upgraded to a Zacks Rank #2 (Buy) on October 27.
Another stock, Arrow Financial Corporation (AROW - Free Report) , which was upgraded to a Zacks Rank #1 (Strong Buy) on October 26, has returned 40.2% (versus the S&P 500’s 13.5% 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.
A hypothetical portfolio of Zacks Rank #1 (Strong Buy) stocks returned +12.02% this year (through September 4th) vs. +18.2% for the S&P 500 index and +7.6% for the equal-weight S&P 500 index. The portfolio of Zacks Rank #1 stocks is an equal-weight portfolio, while the S&P 500 index is a market-cap-weighted index that has been notably distorted by the strong recent performance of mega-cap stocks.
We are not trying to cherry-pick here. But since this Zacks Model portfolio, consisting of Zacks Rank #1 stocks, is an equal-weight portfolio, the equal-weight S&P 500 index is the appropriate benchmark for comparison. Looked at this way, this portfolio has outperformed the index this year.
The Zacks Model Portfolio - consisting of Zacks Rank #1 stocks – has outperformed the S&P index by more than 13 percentage points since 1988 (Through September 4th, 2023, the Zacks # 1 Rank stocks has generated an annualized return of +24.17% since 1988 vs. +10.82% for the S&P 500 index).You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Check Fusion Pharmaceutical’s historical EPS and Sales here>>>
Check Arrow Financial’s historical EPS and Sales here>>>
Image Source: Zacks Investment Research
Zacks Recommendation Upgrades Gap and FinWise Bancorp Higher
Shares of The Gap, Inc. (GPS - Free Report) and FinWise Bancorp (FINW - Free Report) have advanced 76.6% (versus the S&P 500’s 12.3% rise) and 64.5% (versus the S&P 500’s 12.2% rise) since their Zacks Recommendation was upgraded to Outperform on October 24 and October 23, 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 Block, Lululemon Shoot Up
Shares of Block, Inc. (SQ - Free Report) , which belongs to the Zacks Focus List, have gained 81.4% over the past 12 weeks. The stock was added to the Focus List on March 28, 2017. Another Focus-List holding, Lululemon Athletica Inc. (LULU - Free Report) , which was added to the portfolio on December 12, 2017, has returned 41.9% over the past 12 weeks. The S&P 500 has advanced 10.7% over this period.
The 50-stock Zacks Focus List model portfolio returned +22.3% in 2023 (through July 31st) vs. +20.6% for the S&P 500 index and +10.5% for the equal-weight S&P 500 index. In 2022, the portfolio produced -15.2% vs. the S&P 500 index’s -17.96%.
Since 2004, the Focus List portfolio has produced an annualized return of +11.27% through July 31st, 2023. This compares to a +9.65% annualized return for the S&P 500 index in the same time period.
On a rolling one-, three- and five-year bases, the Zacks Focus List returned +21.76%, +16.33%, and +12.54% vs. +12.99%, +13.71% and +12.19% for the S&P 500 index, respectively.
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 Rollins and Fiserv Make Significant Gains
Rollins, Inc. (ROL - Free Report) , a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 21.8% over the past 12 weeks. Fiserv, Inc. (FI - Free Report) has followed Rollins with 17.4% returns.
ECAP, which consists of 30 concentrated, ultra-defensive, long-term Buy-and-Hold stocks, has returned +6.67% in 2023 (through June 30) versus +16.90% 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 3M and Home Depot Outperform Peers
3M Company (MMM - Free Report) , which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 24.5% over the past 12 weeks. Another ECDP stock, The Home Depot, Inc. (HD - Free Report) , has climbed 18.8% 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 3M’s dividend history here>>>
Check Home Depot’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 has returned +0.18% in 2023 (through June 30) versus +16.90% for the S&P 500 Index. The portfolio returned -2.3% in 2022 versus -17.96% for the S&P 500 Index and -8.34% for the ProShares S&P 500 Dividend Aristocrats ETF (NOBL - Free Report) .
Click here to access this portfolio on Zacks Advisor Tools.
Zacks Top 10 Stocks — Shopify Delivers Solid Returns
Shopify Inc. (SHOP - Free Report) , from the Zacks Top 10 Stocks for 2023, has surged 124.4% over the past year, which compares to a 26.1% increase for the S&P 500 Index.
The portfolio returned +16.16% through the end of July 2023 vs. +20.64% for the S&P 500 index and +10.73% for the equal-weighted version of the index. The portfolio returned -15.8% in 2022 vs. -18.1% for the S&P 500 index. Since 2012, the Top 10 portfolio has generated an annualized return of +22.78% vs. +13.65% for the S&P 500 index.
Since the start of 2012 through July 31, 2023, the Zacks Top 10 Stocks have produced a cumulative return of +977.47% vs. +340.35% cumulative return for the S&P 500 index.