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The Zacks Analyst Blog Highlights: Bristol-Myers Squibb, Cleveland-Cliffs, Callaway Golf, SkyWest and Vishay Intertechnology
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For Immediate Release
Chicago, IL – September 5, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Bristol-Myers Squibb Company (BMY - Free Report) , Cleveland-Cliffs Inc. (CLF - Free Report) , Callaway Golf Company , SkyWest, Inc. (SKYW - Free Report) and Vishay Intertechnology, Inc. (VSH - Free Report) .
Summer is unofficially over and traders are back in business after the extended Labor Day break. But, September is historically the worst month for the stock market. And this September could be particularly a tough one as it has midterm elections.
But, investors shouldn’t give up hope just yet. Among the two pillars of the U.S. economy, consumer confidence remains at strong levels and corporate earnings continue to grow. At the same time, the broader market did rise every year after Labor Day during the current bull market. Courtesy of these positives, investors should focus on fundamentally sound companies that can make the most of the current scenario.
September —Typically a Rocky Month for Stocks
Stocks generally tend to wobble in September, and this year the odds are even greater. A series of concerns including an additional $200 billion worth of tariffs on imports from China, scheduled Iran oil sanctions and Congress facing another budget deadline are denting investors’ sentiments.
September is also the month, when the Fed is widely expected to raise rates for the third time this year. That certainly doesn’t bode well for the economy. Lest we forget that an accommodative monetary policy helped the market recently complete the longest ever bull run ever (read more: Wall Street's Longest Bull Run Shapes Winners & Losers).
If history is a guide, Stock Trader’s Almanac found out that in September, since 1950, the S&P 500 and the Dow averaged a loss of 0.5% and 0.8%, respectively. The Nasdaq Composite, as incepted in 1971, averaged a loss of 0.5%, as did the Russell 2000 of small-cap stocks since it was started in 1979. CFRA added that the broader S&P 500 has averaged a 1% decline, particularly, in September going back to 1946.
Midterm Election — The Bull Market’s Next Challenge
Strategists are, in fact, saying that a look at the historical performance shows that stocks see more volatility in the September that features midterm elections.
In the last 11 midterm election years since 1974, the S&P 500 mostly traded flat through September only to rally once political uncertainty waned, per Goldman Sachs. In those years, stock market volatility averaged 15% compared with the median of 12% in all years. After all, shift in balance of power in Washington does have significant implications for fiscal policies and strategic foreign relationships.
Here is Why You Shouldn’t Sell in September
September is upon us and even though there are issues that compel us to stay away from stocks, we shouldn’t be doing so from an investment standpoint. Meanwhile, August, which is mostly a volatile month, saw both the Dow and the S&P 500 register the best gains since 2014. This is because the two pillars of the U.S. economy — consumers and corporates — are still solid.
Consumers are pretty confident about their well-being and do not refrain from spending. According to the Conference Board, the consumer confidence index climbed to 133.4 in August from a revised 127.9 in July, the highest level since October 2000 and above the post-recession high of 130 scaled this February. In fact, the only other period when consumer sentiment was higher was in the Internet-fueled boom of 1997 to 2000 (read more: US Consumers Most Confident Since 1990s Internet Boom: 5 Picks).
Consumers’ optimism was largely driven by strength in the labor market. The jobless rate dropped to 3.9% in July. The current unemployment rate is now at a nearly two-decade low, while the U.S. economy added jobs for 94 successive months in July, the longest stretch on record.
Wages and salaries grew in the second quarter at the fastest pace in almost a decade, while the overall economic output expanded at a 4.2% annual rate in the April-June quarter, the fastest in almost four years. On the whole, the economy expanded 3.2% in the first half of this year and is on track to hit the Trump administration’s annual growth target of 3%. If that happens, it would be the best yearly performance since 2005, two years before the Great Recession (read more: 5 Top Stocks to Ride on Best Economic Growth in 4 Years).
And when it comes to Q2 earnings, 467 S&P 500 companies that have reported so far have seen an earnings increase of 25.5% from the same period last year on 9.9% higher revenues, with 79.2% of the companies beating EPS estimates and 72.8% surpassing revenue estimates.
For the quarter as a whole, total Q2 earnings for the index are expected to be up 24.9% from the same period last year on 9.7% higher revenues. This exceeds the first quarter’s 24.6% earnings growth, the highest quarterly rise since 2010 (read more: Strong Retail Sector Earnings Performance).
Traditionally Markets Rise After Labor Day
Investors, by the way, should expect U.S. stocks to scale north especially after a Labor Day holiday weekend. As per data compiled by Bloomberg, the S&P 500 has always moved higher after Labor Day every year since the bull market began in 2009.
Market gains have averaged 7.2% and have more or less ranged between 1.4% in 2012 and 13.9% in 2010. This trend has been recently mentioned by Rocky White, a quantitative analyst at Schaeffer’s Investment Research.
5 Best Stocks to Buy in September
Since a ‘buy-in-September’ opportunity maybe playing out in the equity market, investing in solid stocks will be prudent. These stocks not only possess a Zacks Rank #1 (Strong Buy) but also are poised to gain significantly in the near term. You can see the complete list of today’s Zacks #1 Rank stocks here.
Such stocks also flaunt a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.
Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, markets, and distributes biopharmaceutical products. The company has a VGM Score of B. In the last 60 days, eight earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings increased 5.5% in the same period. The company’s projected growth rate for the current year is 20.3%, while the Large Cap Pharmaceuticals industry is expected to rise 8.7%.
Cleveland-Cliffs Inc. operates as an iron ore mining company. The company has a VGM Score of A. In the last 60 days, four earnings estimates moved north, while one moved south for the current year. The Zacks Consensus Estimate for earnings rose 24.1% in the same period. The company’s projected growth rate for the current year is 240%, while the Mining - Miscellaneous industry is estimated to rise 9%.
Callaway Golf Company designs, manufactures, and sells golf clubs, golf balls, golf bags, and other golf-related accessories. The company has a VGM Score of A. In the last 60 days, 10 earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings surged 23.5% in the same period. The company’s projected growth rate for the current year is 88.7%, while the Leisure and Recreation Products industry is projected to rise 35.5%.
SkyWest, Inc. operates a regional airline in the United States. The company has a VGM Score of B. In the last 60 days, four earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings advanced 6% in the same period. The company’s projected growth rate for the current year is 43.4%, while the Transportation - Airline industry is expected to decline 9.5%.
Vishay Intertechnology, Inc.manufactures and supplies discrete semiconductors and passive components. The company has a VGM Score of B. In the last 60 days, three earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings improved 11.7% in the same period. The company’s projected growth rate for the current year is 39.9%, while the Semiconductor - Discretes industry is likely to rise 29.9%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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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The Zacks Analyst Blog Highlights: Bristol-Myers Squibb, Cleveland-Cliffs, Callaway Golf, SkyWest and Vishay Intertechnology
For Immediate Release
Chicago, IL – September 5, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Bristol-Myers Squibb Company (BMY - Free Report) , Cleveland-Cliffs Inc. (CLF - Free Report) , Callaway Golf Company , SkyWest, Inc. (SKYW - Free Report) and Vishay Intertechnology, Inc. (VSH - Free Report) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday’s Analyst Blog:
5 Top Stocks to Challenge a Notorious September
Summer is unofficially over and traders are back in business after the extended Labor Day break. But, September is historically the worst month for the stock market. And this September could be particularly a tough one as it has midterm elections.
But, investors shouldn’t give up hope just yet. Among the two pillars of the U.S. economy, consumer confidence remains at strong levels and corporate earnings continue to grow. At the same time, the broader market did rise every year after Labor Day during the current bull market. Courtesy of these positives, investors should focus on fundamentally sound companies that can make the most of the current scenario.
September —Typically a Rocky Month for Stocks
Stocks generally tend to wobble in September, and this year the odds are even greater. A series of concerns including an additional $200 billion worth of tariffs on imports from China, scheduled Iran oil sanctions and Congress facing another budget deadline are denting investors’ sentiments.
September is also the month, when the Fed is widely expected to raise rates for the third time this year. That certainly doesn’t bode well for the economy. Lest we forget that an accommodative monetary policy helped the market recently complete the longest ever bull run ever (read more: Wall Street's Longest Bull Run Shapes Winners & Losers).
If history is a guide, Stock Trader’s Almanac found out that in September, since 1950, the S&P 500 and the Dow averaged a loss of 0.5% and 0.8%, respectively. The Nasdaq Composite, as incepted in 1971, averaged a loss of 0.5%, as did the Russell 2000 of small-cap stocks since it was started in 1979. CFRA added that the broader S&P 500 has averaged a 1% decline, particularly, in September going back to 1946.
Midterm Election — The Bull Market’s Next Challenge
Strategists are, in fact, saying that a look at the historical performance shows that stocks see more volatility in the September that features midterm elections.
In the last 11 midterm election years since 1974, the S&P 500 mostly traded flat through September only to rally once political uncertainty waned, per Goldman Sachs. In those years, stock market volatility averaged 15% compared with the median of 12% in all years. After all, shift in balance of power in Washington does have significant implications for fiscal policies and strategic foreign relationships.
Here is Why You Shouldn’t Sell in September
September is upon us and even though there are issues that compel us to stay away from stocks, we shouldn’t be doing so from an investment standpoint. Meanwhile, August, which is mostly a volatile month, saw both the Dow and the S&P 500 register the best gains since 2014. This is because the two pillars of the U.S. economy — consumers and corporates — are still solid.
Consumers are pretty confident about their well-being and do not refrain from spending. According to the Conference Board, the consumer confidence index climbed to 133.4 in August from a revised 127.9 in July, the highest level since October 2000 and above the post-recession high of 130 scaled this February. In fact, the only other period when consumer sentiment was higher was in the Internet-fueled boom of 1997 to 2000 (read more: US Consumers Most Confident Since 1990s Internet Boom: 5 Picks).
Consumers’ optimism was largely driven by strength in the labor market. The jobless rate dropped to 3.9% in July. The current unemployment rate is now at a nearly two-decade low, while the U.S. economy added jobs for 94 successive months in July, the longest stretch on record.
Wages and salaries grew in the second quarter at the fastest pace in almost a decade, while the overall economic output expanded at a 4.2% annual rate in the April-June quarter, the fastest in almost four years. On the whole, the economy expanded 3.2% in the first half of this year and is on track to hit the Trump administration’s annual growth target of 3%. If that happens, it would be the best yearly performance since 2005, two years before the Great Recession (read more: 5 Top Stocks to Ride on Best Economic Growth in 4 Years).
And when it comes to Q2 earnings, 467 S&P 500 companies that have reported so far have seen an earnings increase of 25.5% from the same period last year on 9.9% higher revenues, with 79.2% of the companies beating EPS estimates and 72.8% surpassing revenue estimates.
For the quarter as a whole, total Q2 earnings for the index are expected to be up 24.9% from the same period last year on 9.7% higher revenues. This exceeds the first quarter’s 24.6% earnings growth, the highest quarterly rise since 2010 (read more: Strong Retail Sector Earnings Performance).
Traditionally Markets Rise After Labor Day
Investors, by the way, should expect U.S. stocks to scale north especially after a Labor Day holiday weekend. As per data compiled by Bloomberg, the S&P 500 has always moved higher after Labor Day every year since the bull market began in 2009.
Market gains have averaged 7.2% and have more or less ranged between 1.4% in 2012 and 13.9% in 2010. This trend has been recently mentioned by Rocky White, a quantitative analyst at Schaeffer’s Investment Research.
5 Best Stocks to Buy in September
Since a ‘buy-in-September’ opportunity maybe playing out in the equity market, investing in solid stocks will be prudent. These stocks not only possess a Zacks Rank #1 (Strong Buy) but also are poised to gain significantly in the near term. You can see the complete list of today’s Zacks #1 Rank stocks here.
Such stocks also flaunt a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners.
Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, markets, and distributes biopharmaceutical products. The company has a VGM Score of B. In the last 60 days, eight earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings increased 5.5% in the same period. The company’s projected growth rate for the current year is 20.3%, while the Large Cap Pharmaceuticals industry is expected to rise 8.7%.
Cleveland-Cliffs Inc. operates as an iron ore mining company. The company has a VGM Score of A. In the last 60 days, four earnings estimates moved north, while one moved south for the current year. The Zacks Consensus Estimate for earnings rose 24.1% in the same period. The company’s projected growth rate for the current year is 240%, while the Mining - Miscellaneous industry is estimated to rise 9%.
Callaway Golf Company designs, manufactures, and sells golf clubs, golf balls, golf bags, and other golf-related accessories. The company has a VGM Score of A. In the last 60 days, 10 earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings surged 23.5% in the same period. The company’s projected growth rate for the current year is 88.7%, while the Leisure and Recreation Products industry is projected to rise 35.5%.
SkyWest, Inc. operates a regional airline in the United States. The company has a VGM Score of B. In the last 60 days, four earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings advanced 6% in the same period. The company’s projected growth rate for the current year is 43.4%, while the Transportation - Airline industry is expected to decline 9.5%.
Vishay Intertechnology, Inc.manufactures and supplies discrete semiconductors and passive components. The company has a VGM Score of B. In the last 60 days, three earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings improved 11.7% in the same period. The company’s projected growth rate for the current year is 39.9%, while the Semiconductor - Discretes industry is likely to rise 29.9%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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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.