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The three major U.S. indexes — the Nasdaq Composite, the S&P 500, and the Dow Jones Industrial Average — have declined 2.1%, 1.9%, and 1.4%, respectively, since October 28. A cautious approach ahead of the U.S. presidential election has pushed the markets into negative territory.
The Labor Department reported that the U.S. economy added only 12,000 jobs in October, reaching its lowest point in three and a half years. Although unemployment remained steady at 4.1%, weak jobs data have raised fresh concerns about the economy’s health among market participants.
Gross domestic product grew at 2.8% annually in Q3. Consumer spending, which holds more than two-thirds of economic activity, rose 3.7% annually, the highest since the first quarter of 2023. Inflation remains under check as the personal consumption expenditures (PCE) index for September came in at 2.1% annually, closer to the Federal Reserve's 2% target. The CME FedWatch Tool indicates a 100% probability of another rate cut in the upcoming Federal Open Market Committee (FOMC) meeting on November 7.
On the global front, rising tensions between Iran and Israel have flared up worries about global supply-chain disruption and impact on oil prices.
Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.
As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.
Here are some of our key achievements:
Bank of New York Mellon and Parker-Hannifin Following Zacks Rank Upgrade
Shares of Bank of New York Mellon Corporation BK have gained 10.6% (versus the S&P 500’s 1% increase) since it was upgraded to a Zacks Rank #2 (Buy) on September 3.
Another stock, Parker-Hannifin Corporation PH, which was also upgraded to a Zacks Rank #2 on September 2, has returned 6.3% (versus the S&P 500’s 1% rise) since then.
Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
A hypothetical portfolio of Zacks Rank #1 (Strong Buy) stocks returned +14% in the year-to-date period through October 7, 2024, vs. +22.2% for the S&P 500 index and +12.4% for the equal-weight version of the S&P 500 index.
This hypothetical portfolio returned +20.63% in 2023 vs. +24.83% for the S&P 500 index and +15% for the equal-weight S&P 500 index.
The portfolio of Zacks Rank #1 stocks is an equal-weight portfolio, while the S&P 500 index is a market-cap-weighted index that has been notably distorted by the concentrated performance of mega-cap stocks since late 2022.
The Zacks Model Portfolio - consisting of Zacks Rank #1 stocks – has outperformed the S&P index by almost 13 percentage points since 1988 (Through October 7, 2024, the Zacks # 1 Rank stocks generated an annualized average return of +24.1% since 1988 vs. +11.2% for the S&P 500 index).
You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Check Bank of New York Mellon’ historical EPS and Sales here>>>
Check Parker-Hannifin’s historical EPS and Sales here>>>
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Zacks Recommendation Upgrades Ubiquiti and PetMed Express
Shares of Ubiquiti Inc. UI and PetMed Express, Inc. PETS have advanced 36.8% (versus the S&P 500’s 3.8% increase) and 28.7% (versus the S&P 500’s 4.2% rise), since their Zacks Recommendation was upgraded to Outperform on September 11 and September 10, respectively.
While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.
The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.
To access our research reports with Zacks Recommendations for the 1100+ stocks we cover, click here>>>
Zacks Focus List Stocks Cbre, Ulta Beauty Shoot Up
Shares of Cbre Group Inc. CBRE, which belongs to the Zacks Focus List, have gained 21.9% over the past 12 weeks. The stock was added to the Focus List on March 13, 2017. Another Focus-List holding, Ulta Beauty, Inc. ULTA, which was added to the portfolio on March 25, 2020, has returned 19.8% over the past 12 weeks. The S&P 500 has advanced 9% over this period.
The Focus List portfolio returned +19.7% in 2024 (through September 30th) vs. +22.1% for the S&P 500 index and +15.2% for the equal-weight S&P 500 index.
The 50-stock Zacks Focus List model portfolio returned +31.44% in 2023 vs. +26.28% for the S&P 500 index and +13.61% for the equal-weight S&P 500 index. In 2022, the portfolio produced -15.2% vs. the S&P 500 index’s -17.96%.
Since 2004, the Focus List portfolio has produced an annualized return of +11.9% (through September 30, 2024). This compares to a +10.4% annualized return for the S&P 500 index and +10.3% for the equal-weight version of the index in the same time period.
Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>
Zacks ECAP Stocks Monster Beverage & FactSet Research Systems Make Significant Gains
Monster Beverage Corporation MNST, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 17.8% over the past 12 weeks. FactSet Research Systems Inc. FDS has followed Monster Beverage Corporation with 16.3% returns.
The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy-and-Hold stocks, returned +1.97% for September 2024 vs. the S&P 500 index’s +2.14% return (IVV ETF).
For the year-to-date period (through the end of September 2024), the portfolio returned +20.62% vs. +22.1% for the S&P 500 index.
In 2023, the portfolio returned +12.17% vs. +26.28% for the S&P 500 index. The portfolio returned -4.7% in 2022 vs. the S&P 500 index’s -17.96%.
With little to no turnover and annual rebalance periodicity, ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.
The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.
Zacks ECDP Stocks Clorox and Home Depot Outperform Peers
The Clorox Company CLX, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 14.6% over the past 12 weeks. Another ECDP stock, The Home Depot, Inc. HD, has also climbed 14.4% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance.
Check Clorox's dividend history here>>>
Check Home Depot‘s dividend history here>>>
With an extremely low beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps significantly mitigate risk.
The Zacks Earnings Certain Dividend Portfolio (ECDP) returned +1.91% in September 2024 vs. the S&P 500 index’s +2.14% gain and the Dividend Aristocrats ETF’s (NOBL) +2.37%.
For the year-to-date period (through September 30th), the portfolio returned +15.85% vs. +22.1% for the S&P 500 index and +13.78% for NOBL.
The portfolio returned -0.9% in 2023 vs. +26.28% for the S&P 500 index and +8.11% for NOBL. The portfolio returned -2.3% in 2022 vs. -17.96% for the S&P 500 index and -8.34% for NOBL.
Click here to access this portfolio on Zacks Advisor Tools.
Zacks Top 10 Stocks Stride Delivers Solid Returns
Stride, Inc. LRN, from the Zacks Top 10 Stocks for 2024, has jumped 57.3% year to date, which compares to the S&P 500 index’s +19.9% increase.
The Top 10 portfolio returned +40.9% this year through September 30th, vs. +22.1% for the S&P 500 index and +15.2% for the equal-weight version of the index.
The Top 10 portfolio returned +25.15% in 2023 vs. +26.28% for the S&P 500 index.
Since 2012, the Top 10 portfolio has produced a cumulative return of +1,714.9% through September 30th, 2024, vs. +448.6% for the S&P 500 index. The portfolio has produced an average return of +25.5% in the period 2012 through September 30th, 2024, vs. +14.4% for the S&P 500 index and +12.7% for the equal-weight version of the index.
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