For Immediate Release
Chicago, IL – February 4, 2020 – 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: PulteGroup Inc. (PHM - Free Report) , Rollins Inc. (ROL - Free Report) , D.R. Horton Inc. (DHI - Free Report) , L3Harris Technologies Inc. (LHX - Free Report) and MSCI Inc. (MSCI - Free Report) .
Here are highlights from Monday’s Analyst Blog:
5 Top S&P 500 Stocks with Double-Digit Returns in January
Wall Street has completed a mixed January after finishing a fabulous 2019. The first half of January continued the previous year’s rally. However, the second half was dampened by severe volatility stemming from the onslaught of the deadly coronavirus in China, which has now spread over 20 countries in the world. Per the government of China, more than 10,000 people are infected in that country of whom 361 have died.
However, despite severe market fluctuations, a closer look at the S&P 500 Index reveals that a bunch of of stocks provided double-digit returns in January. Moreover, a handful of those stocks popped in the second half of last month and still have strong upside left. Investment in those stocks with a favorable Zacks Rank may be lucrative at this juncture.
S&P 500 Ends in Red in January
On Jan 31, the S&P 500 Index sell 1.8% to close at 3,225.52. This marked the index’s worst daily performance since October 2019. The benchmark index is currently 3.4% below its all-time high of 3,329.62 recorded on Jan 17.
For the week ended Jan 31, the broad-market index dropped 2.1% and for the month, shedding 0.2%, reversing its winning streak of four consecutive months. Meanwhile, the Cboe Volatility Index (VIX), popularly known as the best fear gauge of Wall Street, skyrocketed 37% in January to close at 18.84.
As we begin the second month of this year, market participants are divided as to whether the recent downturn is a stock market correction or the beginning of a larger decline. Per research firm CFRA, after September and August, February is historically the third-worst performer since World War II.
Stock Market Meltdown May be Temporary
The recently signed phase-one trade deal between the United States and China has significantly cooled down the nearly two-year-old tariff war. The interim deal will at least help in restoring U.S. business confidence and global economic growth. Moreover, the U.S. Congress has approved the USMCA trade deal, a brainchild of President Donald Trump.
Fed chair JEROME Powell has reiterated his commitment to do whatever needed to support economic expansion and not raise interest rate until the inflation, which is currently at just 1.6%, crosses the central bank’s target level of 2%. Unemployment rate is currently at the lowest-level in 50 years. Moreover, U.S. GDP grew at 2.3% in 2019 despite facing trade-related tussles.
Finally, the earnings trend is improving much to the delight of corporate America and investors. As of Jan 31, 227 S&P 500 members reported fourth-quarter earnings results. Total earnings of these companies are up 2.9% from the same period last year on 3.4% higher revenues.
Notably, fourth-quarter 2019 earnings for the S&P 500 Index is currently projected at down 0.6% year over year on 4.9% higher revenues. This suggests a significant improvement from earnings decline of 3.2% year over year on 3.5% higher revenues, predicted at the beginning of the reporting cycle.
Our Top Picks
We have narrowed down our search to five S&P 500 stocks that provided double-digit returns in January. These stocks also advanced in the second half of January defying severe volatility and still have upside left. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PulteGroup Inc.is primarily engaged in the homebuilding business in the United States. It acquires and develops land primarily for residential purposes; and constructs housing on such land.
The Zacks Rank #1 company has an expected earnings growth rate of 17.2% for the current year. The Zacks Consensus Estimate for the current year has improved 5.4% over the past 30 days. The stock has rallied 15.1% year to date and 8.1% for the period of Jan 16 to Jan 31.
Rollins Inc.provides pest and termite control services to residential and commercial customers. It offers protection against termite damage, rodents and insects to homes, hotels, food service establishments, food manufacturers, retailers and transporters.
The Zacks Rank #2 company has an expected earnings growth rate of 9.6% for the current year. The Zacks Consensus Estimate for the current year has improved 1.3% over the past 30 days. The stock has jumped 14.5% year to date and 7.7% for the period of Jan 16 to Jan 31.
D.R. Horton Inc. operates as a homebuilding company in East, Midwest, Southeast, South Central, Southwest and West regions in the United States. The Zacks Rank #2 company has an expected earnings growth rate of 20.5% for the current year. The Zacks Consensus Estimate for the current year has improved 7.3% over the past 30 days. The stock has climbed 12.3% year to date and 7.8% for the period of Jan 16 to Jan 31.
L3Harris Technologies Inc.provides technology-based solutions offering government and commercial customers' mission-critical challenges in the United States and internationally. It operates in three segments: Communication Systems, Electronic Systems and Space and Intelligence Systems.
The Zacks Rank #2 company has an expected earnings growth rate of 14.2% for the current year. The Zacks Consensus Estimate for the current year has improved 0.4% over the past 30 days. The stock has soared 11.9% year to date and 3.8% for the period of Jan 16 to Jan 31.
MSCI Inc.provides investment decision support tools for its clients to manage their investment processes worldwide. It operates through four segments: Index, Analytics, ESG and Real Estate.
The Zacks Rank #2 company has an expected earnings growth rate of 15.2% for the current year. The Zacks Consensus Estimate for the current year has improved 3.5% over the past 30 days. The stock has surged 10.7% year to date and 6% for the period of Jan 16 to Jan 31.
Free: Zacks’ Single Best Stock Set to Double
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See 5 Stocks Set to Double>>
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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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.