For Immediate Release
Chicago, IL – March 5, 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: Pacira Pharmaceuticals, Inc. PCRX, Computer Programs and Systems, Inc. CPSI, Mattel, Inc. MAT and Performance Food Group Company PFGC.
Here are highlights from Wednesday’s Analyst Blog:
Coronavirus Triggers Rate Cut: These Stocks Look to Gain
In a knee-jerk reaction to the coronavirus pandemic, the Fed has slashed the benchmark interest rate by half a percentage point to the range of 1-1.25%. The unscheduled emergency rate cut was aimed to mitigate the downtrend triggered by the global outbreak. However, the market slid further as investors resorted to panic selling.
Jumping the Gun? Verdict Split
Critics argue that the Fed has probably acted in a haste and should have waited for the policy meeting scheduled in a just a shade over two weeks’ time. They opine that the markets should have been given some recovery time before taking such a key decision that is likely to have economic ramifications.
However, the proponents of the rate cut felt that the move was the call of the hour to stem the free fall of the market with the virus widely expected to cause broad-based economic damage. President Trump, one of the biggest advocates of the rate cut, welcomed the decision and even encouraged Fed to trim the interest rates further to boost household and business confidence. Satyam Panday, senior U.S. economist at S&P Global Ratings, observed, "Given that monetary policy works with a lag, cutting now will help speed up recovery when the coronavirus concerns have passed. If the rout in the financial market continues, more rate cuts are likely to follow in the upcoming March policy meeting, and beyond if required."
Market on a Tailspin
Investors seemed jittery with the untimely pre-emptive action by the Fed and it reignited the worst possible fears of recession being just around the corner. This feeling of uncertainty prompted panic selling across the board and led to a slide in all the leading benchmark indices with investors parking their money in the safe haven of government debt. This, in turn, led to record high prices for U.S. 10-year Treasury bills, driving yields to a historic low of below 1% signaling widespread pessimism about growth.
Moreover, the market might already have factored in the possibility of a rate cut when it surged at the beginning of the week. Consequently, the unexpected Fed decision seemed to have been counterproductive. In addition, any monetary or fiscal stimulus is being widely viewed as a cure for a ‘demand shock’ that boosts spending by household, business or government and not for a ‘supply shock’ caused by factory shutdowns and travel restrictions sparked by coronavirus.
Beat the Mayhem With 4 Gems
Amid the doom and gloom, we have cherry picked four stocks that possess potential to perform well in the long run. These stocks possess either a Zacks Rank #1 (Strong Buy) or 2 (Buy), has a VGM Score of A or B and witnessed upward earnings estimate revisions for a likely solid ROI in 2020. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pacira Pharmaceuticals, Inc.: Parsippany, NJ-based Pacira is a specialty pharmaceutical firm focused on the development, commercialization and manufacture of proprietary pharmaceutical products primarily for use in hospitals and ambulatory surgery centers. This Zacks Rank #2 stock has a VGM Score of A and delivered a positive earnings surprise of a 20.2%, on average, in the trailing four quarters. Pacira has long-term growth expectations of 33.5%. Earnings estimates for the current fiscal have risen 24.4% in the past year to $2.50 per share, while that for the next fiscal is up 28.8% to $3.22.
Computer Programs and Systems, Inc.: Headquartered in Mobile, AL, Computer Programs and Systems provides a complete health information and patient care system that encompasses the full spectrum of financial and clinical applications. This Zacks Rank #1 stock has a VGM Score of A and delivered a positive earnings surprise of a 5.3%, on average, in the trailing four quarters. The company has long-term growth expectations of 6%. Earnings estimates for the current fiscal have risen 8.2% in the past 30 days to $2.65 per share, while that for the next fiscal is up 14.8% to $2.87.
Mattel, Inc.: Headquartered in El Segundo, CA, Mattel is the world’s largest manufacturer of toys sold directly to retailers and wholesalers in most European, Latin American and Asian countries as well as in Australia, Canada and New Zealand. This Zacks Rank #1 stock has a VGM Score of B and delivered a positive earnings surprise of a 91.7%, on average, in the trailing four quarters. The company has long-term growth expectations of 10%. Earnings estimates for the current fiscal have risen 100% in the past year to 6 cents per share.
Performance Food Group Company: Headquartered in Richmond, VA, Performance Food Group markets and distributes food and food-related products in the United States. This Zacks Rank #1 stock has a VGM Score of A and delivered a positive earnings surprise of a 19.4%, on average, in the trailing four quarters. The company has long-term growth expectations of 11%. Earnings estimates for the current fiscal have risen 13.8% in the past year to $2.31 per share, while that for the next fiscal is up 14.9% to $2.62.
As the economy appears a little shaky, betting on some possible outperformers backed by a solid Zacks Rank and a healthy return could be a great idea for investors. These stocks seem to hold great promise for the future and are likely to reward shareholders generously.
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