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The Zacks Analyst Blog Highlights: Big Lots, United Natural, eBay, Murphy USA and H&R Block
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For Immediate Release
Chicago, IL – June 16, 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 Big Lots Inc. (BIG - Free Report) , United Natural Foods Inc. (UNFI - Free Report) , eBay Inc. (EBAY - Free Report) , Murphy USA Inc. (MUSA - Free Report) and H&R Block Inc. (HRB - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Shrug Off Market Gyrations with These Top 5 Value Picks
After an exponential rise for more than 10 weeks, Wall Street entered into a correction mode last week following news that new coronavirus cases increased in several states as the U.S. economy starts reopening. A second surge of coronavirus cases as warned by several medical experts, institutions and agencies sparked confusion among investors regarding a V-shaped recovery of the U.S. economy that looked like a possibility till the first week of June.
Nevertheless, the fundamentals of the U.S. economy remained strong before the outbreak of the coronavirus. The present downturn is not the result of any economic, financial or geopolitical factor but due to a biological hazard in the form of coronavirus. In a post-World War II world, this is the first time that a health hazard has brought the global economy to a standstill.
The market is likely to remain volatile in the near term until concerns about the resurgence of coronavirus infections pass and the economy regains momentum systematically. However, a series of recently released economic data clearly pointed out that the pandemic-led devastations were not as severe as feared earlier. This will limit the stock market's downside potentials.
At this juncture, it makes good sense to buy those stocks on the dip that could prove to be valuable once the rally resumes.
Better-Than-Expected Economic Data
The U.S. economy has stared reopening in a phased manner since the last week of May. Last month's job additions recorded a historic high of 2.5 million and unemployment rate dropped to 13.3% from 14.7% in April, per the Bureau of Labor Statistics. Initial jobless claims declined for the 10th consecutive week since its peak in the last week of March.
In addition, growing consumer confidence and improved consumer sentiment data, higher expectations for the next six months, better than-expected ISM manufacturing and services index, and a solid increase in housing and vehicle sales clearly showed strong pent-up demand.
Unprecedented Stimulus Package
The U.S. government has injected around $3 trillion in fiscal stimulus into the economy in order to protect it from the coronavirus-induced devastation. The Trump administration's decision to give unemployment insurance and stimulus checks for retirees as well as a massive $800 billion restructuring package to small businesses greatly helped in reviving this space.
Federal Reserve’s balance sheet skyrocketed to $7.21 trillion as of Jun 3 as the central bank poured money into the economy by means of purchasing even the high-yielding junk bonds. Moreover, the benchmark interest rate has been reduced to 0%.
Meanwhile, on Jun 11, Treasury Secretary Steven Mnuchin said that a second round of lockdown is not a viable option as it will create more damage than combating coronavirus. He also said that the Trump administration is considering another round of fiscal stimulus of more than $1 trillion next month.
Our Top Picks
At this stage, investors should be prepared to minimize fluctuations in their portfolio and consequently rebalance it with suitable financial assets to maintain stability. Thus, it would be prudent to pick up value stocks with a favorable Zacks Rank.
Big Lots Inc.is a broad-line closeout retailer in the United States. It offers products under various merchandising categories, which include Food, Consumables, Furniture, Seasonal, Soft Home, Hard Home, Electronics and Toys & Accessories.
The forward price-to-earnings ratio (P/E) for the current financial year is 7.6X, lower than the industry average of 23.6X. It has a PEG ratio of 1.0, lower than the industry average of 3.9. The company has an expected earnings growth of 21% for the current year.
United Natural Foods Inc. distributes natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada. It operates through Wholesale and Other segments.
The forward P/E ratio for the current financial year is 6.0X, lower than the industry average of 18.1X. It has a PEG ratio of 0.7, lower than the industry average of 3.2. The company has an expected earnings growth of 23.1% for the current year (ending July 2020).
eBay Inc.is one of the largest online retailers in the world. It operates the marketplace and classifieds platforms that connect buyers and sellers worldwide enabling users to list, buy, sell and pay for items through various online, mobile and offline channels.
The forward P/E ratio for the current financial year is 13.9X, lower than the industry average of 46.9X. It has a PEG ratio of 1.5, lower than the industry average of 1.8. The company has an expected earnings growth of 21.9% for the current year.
Murphy USA Inc.is engaged in the marketing of retail motor fuel products and convenience merchandise. It operates retail stores under the Murphy USA and Murphy Express brand names.
The forward P/E for the current financial year is 12.5X, lower than the industry average of 21.4X. It has a PEG ratio of 3.8, lower than the industry average of 6.8. The company has an expected earnings growth of 68.3% for the current year.
H&R Block Inc.provides assisted income tax return preparation, do-it-yourself tax, and virtual tax preparation services and products to the general public primarily in the United States, Canada, and Australia.
The forward P/E ratio for the current financial year is 4.9X, lower than the industry average of 16.2X. It has a PEG ratio of 0.5, lower than the industry average of 1.3. The company has an expected earnings growth of 333.3% for the current year (ending April 2021).
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 2021.
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 http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Big Lots, United Natural, eBay, Murphy USA and H&R Block
For Immediate Release
Chicago, IL – June 16, 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 Big Lots Inc. (BIG - Free Report) , United Natural Foods Inc. (UNFI - Free Report) , eBay Inc. (EBAY - Free Report) , Murphy USA Inc. (MUSA - Free Report) and H&R Block Inc. (HRB - Free Report) .
Here are highlights from Monday’s Analyst Blog:
Shrug Off Market Gyrations with These Top 5 Value Picks
After an exponential rise for more than 10 weeks, Wall Street entered into a correction mode last week following news that new coronavirus cases increased in several states as the U.S. economy starts reopening. A second surge of coronavirus cases as warned by several medical experts, institutions and agencies sparked confusion among investors regarding a V-shaped recovery of the U.S. economy that looked like a possibility till the first week of June.
Nevertheless, the fundamentals of the U.S. economy remained strong before the outbreak of the coronavirus. The present downturn is not the result of any economic, financial or geopolitical factor but due to a biological hazard in the form of coronavirus. In a post-World War II world, this is the first time that a health hazard has brought the global economy to a standstill.
The market is likely to remain volatile in the near term until concerns about the resurgence of coronavirus infections pass and the economy regains momentum systematically. However, a series of recently released economic data clearly pointed out that the pandemic-led devastations were not as severe as feared earlier. This will limit the stock market's downside potentials.
At this juncture, it makes good sense to buy those stocks on the dip that could prove to be valuable once the rally resumes.
Better-Than-Expected Economic Data
The U.S. economy has stared reopening in a phased manner since the last week of May. Last month's job additions recorded a historic high of 2.5 million and unemployment rate dropped to 13.3% from 14.7% in April, per the Bureau of Labor Statistics. Initial jobless claims declined for the 10th consecutive week since its peak in the last week of March.
In addition, growing consumer confidence and improved consumer sentiment data, higher expectations for the next six months, better than-expected ISM manufacturing and services index, and a solid increase in housing and vehicle sales clearly showed strong pent-up demand.
Unprecedented Stimulus Package
The U.S. government has injected around $3 trillion in fiscal stimulus into the economy in order to protect it from the coronavirus-induced devastation. The Trump administration's decision to give unemployment insurance and stimulus checks for retirees as well as a massive $800 billion restructuring package to small businesses greatly helped in reviving this space.
Federal Reserve’s balance sheet skyrocketed to $7.21 trillion as of Jun 3 as the central bank poured money into the economy by means of purchasing even the high-yielding junk bonds. Moreover, the benchmark interest rate has been reduced to 0%.
Meanwhile, on Jun 11, Treasury Secretary Steven Mnuchin said that a second round of lockdown is not a viable option as it will create more damage than combating coronavirus. He also said that the Trump administration is considering another round of fiscal stimulus of more than $1 trillion next month.
Our Top Picks
At this stage, investors should be prepared to minimize fluctuations in their portfolio and consequently rebalance it with suitable financial assets to maintain stability. Thus, it would be prudent to pick up value stocks with a favorable Zacks Rank.
We have narrowed down our search to five stocks. Each of them carries a Zacks Rank #1 (Strong Buy) and a Value Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Big Lots Inc.is a broad-line closeout retailer in the United States. It offers products under various merchandising categories, which include Food, Consumables, Furniture, Seasonal, Soft Home, Hard Home, Electronics and Toys & Accessories.
The forward price-to-earnings ratio (P/E) for the current financial year is 7.6X, lower than the industry average of 23.6X. It has a PEG ratio of 1.0, lower than the industry average of 3.9. The company has an expected earnings growth of 21% for the current year.
United Natural Foods Inc. distributes natural, organic, specialty, produce, and conventional grocery and non-food products in the United States and Canada. It operates through Wholesale and Other segments.
The forward P/E ratio for the current financial year is 6.0X, lower than the industry average of 18.1X. It has a PEG ratio of 0.7, lower than the industry average of 3.2. The company has an expected earnings growth of 23.1% for the current year (ending July 2020).
eBay Inc.is one of the largest online retailers in the world. It operates the marketplace and classifieds platforms that connect buyers and sellers worldwide enabling users to list, buy, sell and pay for items through various online, mobile and offline channels.
The forward P/E ratio for the current financial year is 13.9X, lower than the industry average of 46.9X. It has a PEG ratio of 1.5, lower than the industry average of 1.8. The company has an expected earnings growth of 21.9% for the current year.
Murphy USA Inc.is engaged in the marketing of retail motor fuel products and convenience merchandise. It operates retail stores under the Murphy USA and Murphy Express brand names.
The forward P/E for the current financial year is 12.5X, lower than the industry average of 21.4X. It has a PEG ratio of 3.8, lower than the industry average of 6.8. The company has an expected earnings growth of 68.3% for the current year.
H&R Block Inc.provides assisted income tax return preparation, do-it-yourself tax, and virtual tax preparation services and products to the general public primarily in the United States, Canada, and Australia.
The forward P/E ratio for the current financial year is 4.9X, lower than the industry average of 16.2X. It has a PEG ratio of 0.5, lower than the industry average of 1.3. The company has an expected earnings growth of 333.3% for the current year (ending April 2021).
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 2021.
Click here for the 6 trades >>
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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/performancefor information about the performance numbers displayed in this press release.