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With the market pushing up to new all-time highs every day, most stocks are getting in on the action. They say a high tide rises all the ships in the harbor and that is certainly the case with stocks. Eventually, the market will get tested. When it does, you want to make sure you are invested in stocks with the strongest earnings. Strong earnings will help the cream rise to the top.
One top stock to take a look at is today’s Bull of the Day, Artisan Partners. Artisan Partners Asset Management Inc. is publicly owned investment manager. It provides its services to pension and profit-sharing plans, trusts, endowments, foundations, charitable organizations, government entities, private funds and non-U.S. funds, as well as mutual funds, non-U.S. funds and collective trusts. It manages separate client-focused equity and fixed income portfolios. The firm invests in the public equity and fixed income markets across the globe. It invests in growth and value stocks of companies across all market capitalization. For fixed income component of its portfolio the firm invests in non-investment grade corporate bonds and secured and unsecured loans.
The stock is currently a Zacks Rank #1 (Strong Buy). The reason for the favorable rank lies in the series of earnings estimate revisions coming in to the upside for the stock. Over the last sixty days, three analysts have increased their earnings estimates for the current year. That bullish behavior have pushed up our Zacks Consensus Estimate from $2.77 to $2.98. That has helped underpin a move higher in the stock.
It makes sense for a company in the investment management business to see increased earnings estimates. As the market goes higher, fees increase, which help these stocks make more money. The Financial – Investment Management industry is in the Top 6% of our Zacks Industry Rank.
The market is in full on beast mode right now. Stocks are rocketing to new highs every day and it feels like you can do no wrong. Eventually, this too shall pass. The market is going to become more discriminatory when things get rough. When the going gets tough, you are going to want to have stocks with strong earnings trends. Prices may reverse quickly, but earnings trends tend to stay in place for extended periods of time. Today’s Bear of the Day is a stock you may believe has a strong earnings trend but the fact is, it does not.
I’m talking about Zacks Rank #5 (Strong Sell) FedEx. FedEx Corporation provides transportation, e-commerce, and business services worldwide. The company's FedEx Express segment offers shipping services for delivery of packages and freight. Its FedEx Ground segment provides business and residential money-back guaranteed ground package delivery services; and consolidates and delivers low-weight and less time-sensitive business-to-consumer packages. The company's FedEx Freight segment offers less-than-truckload and other freight delivery services. As of May 31, 2019, it operated approximately 28,000 vehicles and 373 service centers.
I was surprised to see that over the last sixty days, twelve analysts have cut their earnings estimates for the current year while ten have followed suit for the next year. That’s pushed down our Zacks Consensus Estimate for the current year from $12.07 to $10.84 while next year’s number is off from $13.75 to $12.41.
These negative earnings estimate revisions came well before the coronavirus scare. Several companies have since come out and warned about profits being harmed by the scare. That’s surely going to make a negative impact on FedEx as well.
The Transportation – Air Freight and Cargo industry ranks in the Top 44% of our Zacks Industry Rank. There is only one Zacks Rank #1 (Strong Buy) in the industry currently.
Oil Gets Lift from EIA Supply Data, Back Above $50
Oil prices rose $1.14, or 2.3%, to $50.75 a barrel on Thursday, recovering slightly from the steep sell-off fueled by fears that the coronavirus outbreak in China would have a severe impact on oil demand.
U.S. Crude Benchmark Falls into a Bear Market
The commodity collapsed into a bear market earlier in the week, having plunged more than 20% from its 52-week high of $63.27 on Jan 6. In fact, the health scare, which has killed over 500 people so far and infected in excess of 28,000, was enough to send oil prices sliding below the psychologically important $50-a-barrel for the first time in more than a year.
Overall, the latest round of energy market selling comes amid heightened worries of the mysterious illness playing out like the 2003 SARS epidemic. Although it is quite difficult at this stage to assess the possible implications, according to Goldman Sachs, the deadly virus could lower oil demand by up to 260,000 barrels per day if it impacts passenger traffic due to travel restrictions.
The EIA Relief
It’s the U.S. Energy Department's latest inventory release that sent the market higher yesterday. The report revealed decrease in gasoline and distillate supplies, which more than offset the impact of higher-than-expected rise in crude stocks. Ahead of the EIA publication, oil prices had already been gaining strength on unconfirmed reports about the development of coronavirus vaccines that might stem the outbreak of the deadly strain. Crude price was also supported by indications that the OPEC+ group is preparing deeper output cuts to stem the decline.
Let’s review the EIA's Weekly Petroleum Status Report for the week ending Jan 31.
Crude Oil:The federal government’s EIA report revealed that crude inventories rose by 3.4 million barrels, compared to the 3 million barrels increase that energy analysts had expected. Tepid refinery activity drove the stockpile build with the world's biggest oil consumer even as U.S. production dropped from record levels. This puts the total domestic stocks at 435 million barrels – 2.7% below the year-ago figure and 2% lower than the five-year average.
The latest report also showed that supplies at the Cushing terminal in Oklahoma (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) was up 1.1 million barrels to 36.7 million barrels.
The crude supply cover was up from 25.9 days in the previous week to 26.5 days. In the year-ago period, the supply cover was 26.6 days.
Turning to products, and it is a fairly bullish story.
Gasoline: Gasoline supplies fell after increasing for 12 straight weeks. The fuel’s small drop (91,000 barrels to be precise) is attributable to higher demand. Analysts had forecast 1.9 million barrels climb. At 261.1 million barrels, the current stock of the most widely used petroleum product is 1.2% above the year-earlier level and exceeds the five-year average range by 4%.
Distillate:Distillate fuel supplies (including diesel and heating oil) were down for a third consecutive week. The 1.5 million barrels decrease could be attributed to strengthening demand. Meanwhile, the market had been looking for a supply draw of 100,000 barrels. Current supplies – at 143.2 million barrels – are 3% higher than the year-ago level but remain 4% below the five-year average.
Refinery Rates: Refinery utilization edged up 0.2% from the prior week to 87.4%.
About the Weekly Petroleum Status Report
The Energy Information Administration (EIA) Petroleum Status Report, containing data of the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the United States, both locally and abroad.
The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect the businesses of the companies engaged in the oil and refining industry.
The data from EIA generally acts as a catalyst for crude prices and affect producers, such as ConocoPhillips and refiners such as Valero Energy.
Want to Own an Energy Stock Now?
In case you are looking for a near-term energy play, Marathon Oil Corp. might be a good selection. An upstream oil and gas company with operations in the United States and Africa, Marathon Oil has a Zacks Rank #2 (Buy).
The Houston, TX-based company has seen the Zacks Consensus Estimate for 2020 rise 79.3% over 30 days.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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/performance for information about the performance numbers displayed in this press release.
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Artisan Partners, FedEx, ConocoPhillips, Valero and Marathon Oil highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – February 7, 2019 – Zacks Equity Research Artisan Partners (APAM - Free Report) as the Bull of the Day, FedEx (FDX - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on ConocoPhillips (COP - Free Report) , Valero Energy (VLO - Free Report) and Marathon Oil Corp. (MRO - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
With the market pushing up to new all-time highs every day, most stocks are getting in on the action. They say a high tide rises all the ships in the harbor and that is certainly the case with stocks. Eventually, the market will get tested. When it does, you want to make sure you are invested in stocks with the strongest earnings. Strong earnings will help the cream rise to the top.
One top stock to take a look at is today’s Bull of the Day, Artisan Partners. Artisan Partners Asset Management Inc. is publicly owned investment manager. It provides its services to pension and profit-sharing plans, trusts, endowments, foundations, charitable organizations, government entities, private funds and non-U.S. funds, as well as mutual funds, non-U.S. funds and collective trusts. It manages separate client-focused equity and fixed income portfolios. The firm invests in the public equity and fixed income markets across the globe. It invests in growth and value stocks of companies across all market capitalization. For fixed income component of its portfolio the firm invests in non-investment grade corporate bonds and secured and unsecured loans.
The stock is currently a Zacks Rank #1 (Strong Buy). The reason for the favorable rank lies in the series of earnings estimate revisions coming in to the upside for the stock. Over the last sixty days, three analysts have increased their earnings estimates for the current year. That bullish behavior have pushed up our Zacks Consensus Estimate from $2.77 to $2.98. That has helped underpin a move higher in the stock.
It makes sense for a company in the investment management business to see increased earnings estimates. As the market goes higher, fees increase, which help these stocks make more money. The Financial – Investment Management industry is in the Top 6% of our Zacks Industry Rank.
Bear of the Day:
The market is in full on beast mode right now. Stocks are rocketing to new highs every day and it feels like you can do no wrong. Eventually, this too shall pass. The market is going to become more discriminatory when things get rough. When the going gets tough, you are going to want to have stocks with strong earnings trends. Prices may reverse quickly, but earnings trends tend to stay in place for extended periods of time. Today’s Bear of the Day is a stock you may believe has a strong earnings trend but the fact is, it does not.
I’m talking about Zacks Rank #5 (Strong Sell) FedEx. FedEx Corporation provides transportation, e-commerce, and business services worldwide. The company's FedEx Express segment offers shipping services for delivery of packages and freight. Its FedEx Ground segment provides business and residential money-back guaranteed ground package delivery services; and consolidates and delivers low-weight and less time-sensitive business-to-consumer packages. The company's FedEx Freight segment offers less-than-truckload and other freight delivery services. As of May 31, 2019, it operated approximately 28,000 vehicles and 373 service centers.
I was surprised to see that over the last sixty days, twelve analysts have cut their earnings estimates for the current year while ten have followed suit for the next year. That’s pushed down our Zacks Consensus Estimate for the current year from $12.07 to $10.84 while next year’s number is off from $13.75 to $12.41.
These negative earnings estimate revisions came well before the coronavirus scare. Several companies have since come out and warned about profits being harmed by the scare. That’s surely going to make a negative impact on FedEx as well.
The Transportation – Air Freight and Cargo industry ranks in the Top 44% of our Zacks Industry Rank. There is only one Zacks Rank #1 (Strong Buy) in the industry currently.
Oil Gets Lift from EIA Supply Data, Back Above $50
Oil prices rose $1.14, or 2.3%, to $50.75 a barrel on Thursday, recovering slightly from the steep sell-off fueled by fears that the coronavirus outbreak in China would have a severe impact on oil demand.
U.S. Crude Benchmark Falls into a Bear Market
The commodity collapsed into a bear market earlier in the week, having plunged more than 20% from its 52-week high of $63.27 on Jan 6. In fact, the health scare, which has killed over 500 people so far and infected in excess of 28,000, was enough to send oil prices sliding below the psychologically important $50-a-barrel for the first time in more than a year.
Overall, the latest round of energy market selling comes amid heightened worries of the mysterious illness playing out like the 2003 SARS epidemic. Although it is quite difficult at this stage to assess the possible implications, according to Goldman Sachs, the deadly virus could lower oil demand by up to 260,000 barrels per day if it impacts passenger traffic due to travel restrictions.
The EIA Relief
It’s the U.S. Energy Department's latest inventory release that sent the market higher yesterday. The report revealed decrease in gasoline and distillate supplies, which more than offset the impact of higher-than-expected rise in crude stocks. Ahead of the EIA publication, oil prices had already been gaining strength on unconfirmed reports about the development of coronavirus vaccines that might stem the outbreak of the deadly strain. Crude price was also supported by indications that the OPEC+ group is preparing deeper output cuts to stem the decline.
Let’s review the EIA's Weekly Petroleum Status Report for the week ending Jan 31.
Crude Oil:The federal government’s EIA report revealed that crude inventories rose by 3.4 million barrels, compared to the 3 million barrels increase that energy analysts had expected. Tepid refinery activity drove the stockpile build with the world's biggest oil consumer even as U.S. production dropped from record levels. This puts the total domestic stocks at 435 million barrels – 2.7% below the year-ago figure and 2% lower than the five-year average.
The latest report also showed that supplies at the Cushing terminal in Oklahoma (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) was up 1.1 million barrels to 36.7 million barrels.
The crude supply cover was up from 25.9 days in the previous week to 26.5 days. In the year-ago period, the supply cover was 26.6 days.
Turning to products, and it is a fairly bullish story.
Gasoline: Gasoline supplies fell after increasing for 12 straight weeks. The fuel’s small drop (91,000 barrels to be precise) is attributable to higher demand. Analysts had forecast 1.9 million barrels climb. At 261.1 million barrels, the current stock of the most widely used petroleum product is 1.2% above the year-earlier level and exceeds the five-year average range by 4%.
Distillate:Distillate fuel supplies (including diesel and heating oil) were down for a third consecutive week. The 1.5 million barrels decrease could be attributed to strengthening demand. Meanwhile, the market had been looking for a supply draw of 100,000 barrels. Current supplies – at 143.2 million barrels – are 3% higher than the year-ago level but remain 4% below the five-year average.
Refinery Rates: Refinery utilization edged up 0.2% from the prior week to 87.4%.
About the Weekly Petroleum Status Report
The Energy Information Administration (EIA) Petroleum Status Report, containing data of the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the United States, both locally and abroad.
The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect the businesses of the companies engaged in the oil and refining industry.
The data from EIA generally acts as a catalyst for crude prices and affect producers, such as ConocoPhillips and refiners such as Valero Energy.
Want to Own an Energy Stock Now?
In case you are looking for a near-term energy play, Marathon Oil Corp. might be a good selection. An upstream oil and gas company with operations in the United States and Africa, Marathon Oil has a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Houston, TX-based company has seen the Zacks Consensus Estimate for 2020 rise 79.3% over 30 days.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
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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/performance for information about the performance numbers displayed in this press release.