Last week, all three major U.S. indexes ended in red due to investors' cautious approach before the election season. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite have declined by 1.90%, 0.78% and 0.12%, respectively.
Trading remained choppy ahead of the U.S. presidential elections. The benchmark 10-year treasury yield reached 4.222%, the highest level in three months, as results of the election could determine whether federal borrowing will surge. Due to strong macroeconomic data in recent weeks, market participants expect the Federal Reserve to cut interest rates much more slowly. Also, Richmond Fed president Thomas Barkin’s comment that the Fed’s 2% inflation target might take longer than expected has left investors apprehensive about the pace of future rate cuts.
On the international front, rising geopolitical tensions in the Middle East, between Iran and Israel will impact the global supply chain and energy 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:
Versus Systems and Bilibili Following Zacks Rank Upgrade
Shares of Versus Systems Inc. VS have gained 84.1% (versus the S&P 500’s 3.05% increase) since it was upgraded to a Zacks Rank #2 (Buy) on August 28.
Another stock, Bilibili Inc. BILI, which was upgraded to a Zacks Rank #2 on August 27, has returned 44.8% (versus the S&P 500’s 3.2% increase) 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 stocks has returned +6.1% in the year-to-date period through April 1, 2024, vs. +11.3% for the S&P 500 index and +7.7% 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 October 2022.
The Zacks Model Portfolio — consisting of Zacks Rank #1 stocks — has outperformed the S&P index by more than 16 percentage points since 1988 (through April 1, 2024, the Zacks # 1 Rank stocks generated an annualized return of +27.6% since 1988 vs. +11.1% for the S&P 500 index).You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Check Versus Systems’ historical EPS and Sales here>>>
Check Bilibili’s historical EPS and Sales here>>>
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Zacks Recommendation Upgrades Banco BBVA Argentina and Canadian Imperial Bank of Commerce
Shares of Banco BBVA Argentina S.A. BBAR and Canadian Imperial Bank of Commerce CM have advanced 31.4% (versus the S&P 500’s 2.7% increase) and 9.6% (versus the S&P 500’s 4.8% rise), since their Zacks Recommendation was upgraded to Outperform on September 3 and September 4, 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 Palantir Technologies, Shopify Shoot Up
Shares of Palantir Technologies Inc. PLTR, which belongs to the Zacks Focus List, have gained 81.3% over the past 12 weeks. The stock was added to the Focus List on March 26, 2024. Another Focus-List holding, Shopify Inc. SHOP, which was added to the portfolio on September 6, 2022, has returned 45.2% over the past 12 weeks. The S&P 500 has advanced 6.2% over this period.
The Focus List portfolio returned +10.23% in 2024 Q1 vs. +10.56% for the S&P 500 index and +7.9% 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 +11.91% (through March 31, 2024). This compares to a +10.25% annualized return for the S&P 500 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 Fair Isaac & Walmart Make Significant Gains
Fair Isaac Corporation FICO, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 25% over the past 12 weeks. Walmart Inc. WMT has followed Fair Isaac with 20.5% returns.
ECAP, which consists of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks, has returned +9.08% in the year-to-date period (through March 31, 2024) vs. +10.42%.
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 Starbucks' and Fastenal Outperform Peers
Starbucks Corporation SBUX, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 28.2% over the past 12 weeks. Another ECDP stock, Fastenal Company FAST, has also climbed 12.7% 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 Starbucks 's dividend history here>>>
Check Fastenal’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.
ECDP has returned +4.47% in the year-to-date period (through March 31, 2024) vs. +10.42% for the S&P 500 index (IVV) and +6.9% for the Dividend Aristocrats ETF (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 Axon Enterprise Delivers Solid Returns
Axon Enterprise, Inc. AXON, from the Zacks Top 10 Stocks for 2024, has jumped 72.1% year to date, which compares to the S&P 500 index’s +21.8% increase.
The Top 10 portfolio returned +19.56% in 2024 Q1 vs. +10.56% for the S&P 500 index and +7.9% 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 +1,060.9% through the end of 2023 vs. +360.1% for the S&P 500 index.
Since 2012, the Zacks Top 10 portfolio has produced an annualized return of +25.02% through the end of 2024 Q1 vs. +14.1% for the S&P 500 index and +12.7% for the equal-weight version of the index. The portfolio has produced a cumulative return of +1,442.3% vs. +403.03% for the S&P 500 index and +331.29% for the equal-weight index.
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