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The income you need to be in the 1% in these states: report

SmartAsset published a report on how much you need to earn in order to be in the 1% in each U.S. state......»»

Category: topSource: foxnewsJan 14th, 2022

The income you need to be in the 1% in these states: report

SmartAsset published a report on how much you need to earn in order to be in the 1% in each U.S. state......»»

Category: topSource: foxnewsJan 14th, 2022

Here"s Why You Should Retain Cigna (CI) in Your Portfolio

Cigna (CI) is well-poised for growth, attributable to solid segmental contributions, the continuous launch of affordable MA plans, a strong partner network and sufficient cash reserves. Cigna Corporation CI continues to benefit on the back of sustained top-line growth, foraying into new contracts or extending relationships with renowned healthcare systems, growing medical membership and solid financial position. An optimistic 2022 EPS outlook instills further confidence.Zacks Rank & Price PerformanceCigna carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The stock has gained 8.2% in a year compared with the industry’s rally of 29.4%. The Medical sector declined 15.1%. The S&P Index climbed 25% in the same time frame.Image Source: Zacks Investment ResearchStyle ScoreCI is well-poised for progress as evident from its impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all three factors.Robust 2022 ProspectsThe Zacks Consensus Estimate for the Cigna's 2022 earnings indicates year-over-year growth of 8.2%, while the same for revenues suggests an improvement of 5.4% from the year-ago reported figure.Sound Earnings Surprise HistoryCI outpaced earnings estimates in three of the trailing four quarters and missed once, the average surprise being 4.53%.Upbeat EPS View for 2022This year, adjusted income from operations per share is estimated to improve at least 10% from the 2021 guidance, which is pegged at a minimum of $20.35 per share.Business TailwindsThe three growth platforms of Cigna — Evernorth, U.S. Medical and International Markets continue to contribute significantly to the sustained top-line growth. The Evernorth segment comprises a wide range of pharmacy solutions, benefits management solutions and care solutions. Meanwhile, the U.S. Medical unit intends to offer medical solutions in the form of commercial products (medical, pharmacy, behavioral health, dental, vision benefits and others) and government solutions (Medicaid and Medicaid plans) to clients. Management remains confident about revenue and earnings growth in the Evernorth segment during the year 2022 as well.CI aims to maintain a long-term target in the range of 6% to 8% with regard to average annual adjusted revenue growth. For more than a decade, Cigna has maintained a track record of reporting average annual adjusted EPS growth higher than the long-term target of 10% to 13%.The global health service company has solid Medicare and Medicaid businesses in place, courtesy of continuous product expansions, rising membership, and new collaborations or contract extensions with renowned healthcare systems. These contract extensions have bolstered Cigna’s partner network and ensured uninterrupted healthcare services across several regions of the United States. CI’s collaboration with Hartford HealthCare and Oscar Health bears testament to the same.Cigna has been intensifying focus on launching cost-effective Medicare Advantage (“MA”) plans, which come with several bundled benefits and improved care coordination. Thus, these factors make them the preferred choice for customers over a traditional Medicare plan. The MA business of CI aims to reach 108 new counties in 2022. Through this move the company will foray into three new states — Connecticut, Oregon, and Washington.Cigna remains committed to growing its healthcare business as a result of which it continues to divest non-health units. In October 2021, CI inked a deal to divest its life, accident and supplemental benefits businesses to insurer Chubb. The transaction is likely to conclude this year.  At the end of 2020, the company divested its group life and disability insurance business to New York Life.The liquidity position of Cigna appears strong, with a sound cash balance capable of servicing short-term debt obligations. Adequate cash-generating abilities enable CI to undertake several growth-related efforts and tactically deploy capital through share buybacks and dividend hikes. Its dividend yield of 1.7% lies higher than the industry’s figure of 1%.Stocks to ConsiderSome better-ranked stocks in the medical space include Axcella Health Inc. AXLA, Cerner Corporation CERN and Molina Healthcare, Inc. MOH, each carrying a Zacks Rank #2 (Buy) at present.Axcella Health has a trailing four-quarter earnings surprise of 0.64%, on average. The Zacks Consensus Estimate for AXLA’s 2022 earnings suggests 3.3% year-over-year growth. The consensus mark has also moved north by 1.2% in the past 30 days. Axcella Health has a Momentum Score of B.The bottom line of Cerner outpaced earnings estimates in three of the trailing four quarters and matched once, the average surprise being 3.21%. The Zacks Consensus Estimate for CERN’s 2022 earnings suggests 11.6% improvement year over year, while the same for revenues implies growth of 4.8%. Cerner has a VGM Score of B.Molina Healthcare has a trailing four-quarter surprise of 4.00%, on average. The consensus mark for MOH’s 2022 earnings indicates an improvement of 27.3% from the prior-year reported figure, while the same for revenues suggests a 12% rise from the year-ago reported figure. The expected long-term earnings growth rate is pegged at 21.1%, better than the industry’s average of 15%.  Molina Healthcare boasts of a VGM Score of A.While shares of Cerner and Molina Healthcare have gained 14.8% and 30.5%, respectively, in a year, Axcella Health stock has lost 65.9% in the same time frame. Bitcoin, Like the Internet Itself, Could Change Everything Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities. Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. See 3 crypto-related stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cerner Corporation (CERN): Free Stock Analysis Report Molina Healthcare, Inc (MOH): Free Stock Analysis Report Cigna Corporation (CI): Free Stock Analysis Report Axcella Health Inc. (AXLA): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

Buy 5 Stocks That Are Set to Beat Earnings Results Next Week

Five companies will report fourth-quarter 2021 earnings results next week. These are: SCHW, JBHT, SLB, BOKF and CSX. The fourth-quarter 2021 earnings season will gather pace from Jan 14 as banking behemoths are set to release their financial numbers. Market participants have high expectations from this earnings season as overall earnings of corporate America is likely to remain robust after skyrocketing in the first three quarters of 2021.Five companies are slated to release their fourth-quarter 2021 earnings results next week. A favorable Zacks Rank and a possible earnings beat have made these stocks attractive from investors’ point of view. These are — The Charles Schwab Corp. SCHW, J.B. Hunt Transport Services Inc. JBHT, CSX Corp. CSX, Schlumberger Ltd. SLB and BOK Financial Corp. BOKF.Good Start to Fourth-Quarter EarningsAs of Jan 12, 20 S&P 500 companies have reported fourth-quarter 2021 results. Total earnings of these companies are up 29.3% year over year on 12.8% higher revenues with 85% beating EPS estimates and 90% surpassing revenue estimates.Total fourth-quarter earnings of the market's benchmark — the S&P 500 Index — are projected to climb 19.9% from the same period last year on 11.9% higher revenues, following 41.4% year-over-year earnings growth on 17.4% higher revenues in the third quarter, 95% year-over-year earnings growth on 25.3% higher revenues in the second quarter and 49.3% year-over-year earnings growth on 10.3% higher revenues in first-quarter 2021.The first three quarters of this year were favorably impacted since the preceding quarters of last year were affected by the pandemic-induced lockdowns and restriction. However, the U.S. economy started reopening at a very slow pace since the beginning of the fourth quarter of 2020.Q4 2021 At a GlanceThe U.S. economy continued to witness a strong recovery from the pandemic-led havoc in the fourth quarter. Nationwide deployment of COVID-19 vaccines on a priority basis, massive fiscal stimulus and continuation of easy money policies by the Fed resulted in a faster-than-expected reopening of the economy.Strong pent-up demand supported by record-high personal savings, labor shortage and supply-chain disruptions resulted in a spike in inflation. Although the Fed initially considered the inflation to be transitory, it did recognize in its December FOMC meeting that inflation is no longer transitory and needs harsh measures to contain it.The rapid spread of the highly infectious Delta and Omicron variants of the coronavirus also disrupted normal economic activities to some extent. However, we remain positive in our earnings outlook, as we see the overall growth picture steadily improving, as the near-term logistical issues get addressed.Our Top PicksFive companies will report fourth-quarter 2021 earnings results next week. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.Our research shows that for stocks with the combination of a Zacks Rank #3 or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.The chart below shows the price performance of our five picks in  last quarter.Image Source: Zacks Investment ResearchThe Charles Schwab remains focused on enhancing trading revenues, which have been under pressure for a few years. For this, SCHW continues to undertake several initiatives including lowering its basic online equity and ETF trade commissions to zero and reducing fees for the Schwab market cap-weighted index mutual funds.Further, it launched Schwab Stock Slices, through which investors will be able to own shares of any company in the S&P 500 Index starting at $5 each, even though these shares cost more. These efforts, aimed at building client base and the acquisition of TD Ameritrade, are likely to lead to further improvement in the trading income of Charles Schwab.    SCHW has an Earnings ESP of +0.65%. It has an expected earnings growth rate of 20.2% for the current year. The Zacks Consensus Estimate for current-year earnings improved 4% over the last 7 days.Charles Schwab recorded earnings surprises in the last four reported quarters, with an average beat of 3.7%. This Zacks Rank #1 company is set to release earnings results on Jan 18, before the opening bell.J.B. Hunt Transport Services is benefiting from strong performances across all its segments. The Dedicated Contract Services unit of JBHT is being aided by fleet productivity improvement and a rise in average revenue producing trucks.The Integrated Capacity Solutions unit J.B. Hunt of is gaining from a favorable customer freight mix, as well as higher contractual and spot rates. Additionally, increase in load count and revenue per load is supporting growth of the Truck segment.JBHT has an Earnings ESP of +1.54%. It has an expected earnings growth rate of 18.8% for the current year. The Zacks Consensus Estimate for current-year earnings improved 4% over the last 7 days.J.B. Hunt recorded earnings surprises in the last four reported quarters, with an average beat of 0.5%. This Zacks Rank #2 company is set to release earnings results on Jan 18, after the closing bell.CSX offers rail-based freight transportation services like traditional rail service, transport of intermodal containers and trailers apart from rail-to- truck transfers. With a healthy freight environment, CSX is benefiting from growth across all its businesses. In the first nine months of 2021, total revenues climbed 17% with 9% rise in volumes.Primarily due to the improved freight scene, shares of CSX have outperformed its industry so far this year. The July 2021 acquisition of Quality Carriers is aiding the company’s top line. CSX’s efforts to reward its shareholders are encouraging.CSX has an Earnings ESP of +0.17%. It has an expected earnings growth rate of 13.2% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.6% over the last 7 days.CSX recorded earnings surprises in the three out of last four reported quarters, with an average beat of 5.8%. This Zacks Rank #2 company is set to release earnings results on Jan 20, after the closing bell.Schlumberger supplies technology for reservoir characterization, drilling, production, and processing to the oil and gas industry worldwide. SLB operates in four divisions: Digital & Integration, Reservoir Performance, Well Construction, and Production Systems.Schlumberger is the largest oilfield services player, with a presence in every energy market across the globe. Being the leading provider of technology for complex oilfields, SLB is better positioned to take up new offshore projects in international markets. Schlumberger is targeting net-zero greenhouse gas emissions by 2050.SLB has an Earnings ESP of +2.86%. It has an expected earnings growth rate of 50.7% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.5% over the last 7 days.Schlumberger recorded earnings surprises in the last four reported quarters, with an average beat of 12%. This Zacks Rank #2 company is set to release earnings results on Jan 21, before the opening bell.BOK Financial is a regional financial services company. With continued economic recovery, BOK Financial is poised for decent growth in loan and deposit balances. Decent liquidity and investment-grade credit ratings should enable BOKF to navigate any economic uncertainty going forward. Improved capital deployment initiatives and the asset quality of BOK Financial are also encouraging.Over the past several years, BOK Financial has transformed from merely being a bank in Oklahoma to a chief financial service provider, by expanding into carefully selected markets in neighboring states. Since 2016, BOKF completed a number of acquisitions expanding its asset management business and footprint. BOK Financial strengthened its foothold in Colorado and Arizona following its merger with Denver-based CoBiz Financial in 2018.BOKF has an Earnings ESP of +3.64%. The Zacks Consensus Estimate for current-year earnings improved 0.9% over the last 7 days. BOK Financial recorded earnings surprises in the last four reported quarters, with an average beat of 25.4%. This Zacks Rank #2 company is set to release earnings results on Jan 19, before the opening bell.Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Schlumberger Limited (SLB): Free Stock Analysis Report CSX Corporation (CSX): Free Stock Analysis Report J.B. Hunt Transport Services, Inc. (JBHT): Free Stock Analysis Report The Charles Schwab Corporation (SCHW): Free Stock Analysis Report BOK Financial Corporation (BOKF): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

Kroger workers experienced hunger, homelessness, and couldn"t pay their rent in 2021. Its CEO made $22 million the previous year.

The median worker pay at Kroger was $24,617 in 2021, researchers found, meaning the CEO made 909 times the pay of the average worker. 1 in 7 Kroger workers faced homelessness in the past year, and more than a third of them said they were worried about eviction.Courtesy of Veeve 14% of Kroger workers faced homelessness in the past year, according to a survey of 10,000 unionized workers. More than three-quarters of the company's workers are also food insecure.  Real wages for Kroger workers have decreased in the past few years, while executive profits have increased.  Kroger CEO Rodney McMullen got a lot richer later year, while most of his company's workers faced homelessness, eviction, or hunger.A survey by nonprofit Economic Roundtable found more than one-third (36%) of 10,000 employees at Kroger-owned stores in Southern California, Colorado, and Washington said they were worried about eviction. More than three-quarters (78%) are food-insecure. And 1 in 7 Kroger workers faced homelessness in the past year. "There are workers sleeping in RVs or couch surfing or living in parks somewhere," Peter Dreier, a researcher on the project, told Insider. "Americans go to their local supermarket every week and smile at the person cashing them out, not aware that the person they're talking to is going to sleep in a car after they clock out." Over 8,000 unionized Kroger's King Soopers employees went on strike this week in Colorado, demanding better wages and working conditions from the country's largest grocery store chain and fourth-largest private employer. Its profits soared during the pandemic, greatly increasing the wealth of McMullen and its shareholders. Kroger employees, however, have endured reduced wages and fewer full-time opportunities from the company. Kroger's profits swelled, but wages didn'tNearly 1 in 5 (18%) Kroger employees said they hadn't paid the previous month's mortgage on time. Roughly 65,000 of 465,000 national workers in 2020 experienced homelessness. All of the workers surveyed hail from unionized Kroger shops, suggesting that non-union workers fare much worse. The report noted that the decline in "real wages" — wages adjusted for inflation — over the past three decades are largely to blame.The most experienced Kroger food clerks, the highest paid in the company, saw wages decline 11 to 22 percent across since 1990, according to the study. The average worker in some states saw real pay declines of about 3% in the past few decades, Dreier, who is also an urban policy professor at Occidental College, told Insider. Meanwhile, the pandemic has been extremely profitable for Kroger, which operates about 2,800 stores under different brands, like Ralph's, King Soopers, and Gerbes. The company earned $4.1 billion in profits in 2020, and by the end of the third quarter of 2021, had $2.28 billion in cash on hand. That's up from the $399 million they had on hand in the first quarter of 2020.Company executives received raises and bonuses as a result. McMullen made over $22 million, nearly doubling the $12 million he made in 2018. Kroger also gave their stockholders $1.3 billion in stock buybacks in the first three quarters of 2021, the researchers estimate. The median worker pay at Kroger was $24,617 in 2021, they also found, meaning the CEO made 909 times the pay of the average worker. As the authors note, the Kroger worker rate of food insecurity is seven times higher than the national average, with 78% of them saying they had either very low food security (42%)  or low food security (36%). "The biggest irony and tragedy is that here are people who spend all day around food, and when they go home they can't afford to feed their families adequately," Dreier said. "There would be days where I would starve myself so that my kids can eat but even that's not enough," a cheese shop clerk at a Kroger store in Colorado wrote in a survey response. "There's been times where I couldn't pay my rent and ended up on the street."Low pay and unpredictable schedules leave parents and young people with few optionsThe company paid workers hazard pay in the first two months of the pandemic. The researchers say that this, high turnover, low wages, sporadic scheduling, and limited opportunities for full-time employment, is what keeps workers in poverty. A quarter of respondents said that they were given a day or less notice about schedule changes. Dreier said this makes it harder for workers to schedule hours for second jobs — 86% of people said that Kroger was the only source of their income. Younger workers are specifically at risk of homelessness, or are stuck living with their parents. "Younger workers often can't afford to live alone or outside their family's home," Patrick Burns, a senior researcher at the Economic Roundtable told Insider. When they do fly the coop, they face high rents, housing instability, and new costs of living."You see the same for parents who work for Kroger's and can't afford to be on their own, they have to stay with their adult kids." Daniel Flaming, president of the Economic Roundtable, told Insider. "These wages have led to involuntary multigenerational household situations and crowded households." Dreier, Burns, and Flaming made multiple policy suggestions for Kroger to combat homelessness and food insecurity for its staff, including giving them higher food discounts, increasing wages, and increasing full time opportunities. "Kroger's has the flexibility to do better by their employees and it has chosen not to," Dreier said. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderJan 14th, 2022

5 Bank Stocks to Buy as Fed Signals Faster Rate Hikes

The Fed is signaling a more hawkish stance, leading to a faster-than-expected hike in interest rates. Banks including Comerica (CMA), Fifth Third Bancorp (FITB), Wells Fargo (WFC), East West Bancorp (EWBC) and Western Alliance (WAL) are set to gain. Yesterday, the minutes from the Federal Reserve’s December meeting were released. It showed that the Fed officials are highly concerned about the “elevated levels of inflation” and the tighter job market. The officials are ready to get more aggressive in dialing back the ultra-easy monetary policies, which were introduced in March 2020 to support the U.S. economy from COVID-19 related slowdown.This will mean a faster-than-previously expected increase in interest rates and a reduction in the balance sheet size “soon after beginning to raise the federal funds rate.” Per the CME FedWatch Tool data, at present, there is almost 70% chance that the Fed will raise the interest rates by 25 basis points in March.Thriving in a higher interest rate environment, banks are likely to remain in the spotlight. Hence, we have chosen — Comerica Incorporated CMA, Fifth Third Bancorp FITB, Wells Fargo & Company WFC, East West Bancorp, Inc. EWBC and Western Alliance Bancorporation WAL — as these will benefit from the Fed’s hawkish stance.Following the indications that the Fed will be reducing its presence in the long-term bond markets the 10-year Treasury yield rose to its highest level since April 2021. The central bank has approximately $8.8 trillion on its balance sheet. The majority of this was amassed during the pandemic in order to keep financial markets stable and hold down long-term interest rates.Additionally, prospects of a hike in rates drove yields on the 2-year Treasury note, which are extremely sensitive to Fed policy changes, jumped to its highest level since March 2020.These factors, along with the Fed’s plan to fast-track the speed of taper its bond purchases, clearly indicate that the U.S. economy is out of the woods from the pandemic era slowdown and is expected to continue expanding this year and beyond despite several concerns like supply-chain bottlenecks and emergence of new COVID-19 variants.Here’s How Banks Stand to GainSince March 2020, banks have been witnessing contraction of the net interest margin (NIM) due to the Fed's accommodative monetary policy and near-zero interest rates. So, the faster-than-expected interest rate hikes will come as a breather for banks and improve margins and net interest income (NII), which constitutes a major portion of the revenues.Also, the steepening of the yield curve (the difference between short and long-term interest rates), robust economic growth and a gradual rise in loan demand are set to drive margins and NII. Banks are taking initiatives to restructure operations to diversify their footprint and revenue base. Efforts to focus more on non-interest income are likely to bolster banks’ top-line growth.Our Top Five PicksBased on these favorable developments, investing in bank stocks will be highly profitable, going forward. Short-listed banks have witnessed positive earnings estimate revision of at least 1% for 2022 over the past four weeks. Also, these banks have rallied more than 50% last year.All five banks have a market cap of not less than $10 billion and currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Performance in 2021 Image Source: Zacks Investment ResearchHeadquartered in Dallas, TX, Comerica delivers banking and financial services in three primary geographic markets — Texas, California, Michigan, Arizona and Florida. The company, which has a market cap of $12.1 billion, has operations in numerous other U.S. states, and Canada and Mexico.Comerica’s focus on improving operational efficiency led to the introduction of GEAR Up initiatives in mid-2016. Since the implementation of this initiative, the bank has consolidated several banking centers, significantly lowered retirement plan expenses and retrenched a number of employees. These efforts have resulted in an improvement in efficiency ratio and return on equity over time.Comerica remains focused on revenue growth strategy. With gradually recovering loan commitments, robust loan pipeline and solid economic growth, the company’s loans balance is expected to continue improving, thereby stoking NII growth.A manageable debt level, investment-grade long-term credit ratings, solid balance sheet position and impressive credit quality are other catalysts supporting Comerica. Additionally, the company’s capital deployment activities are encouraging and sustainable.In 2021, CMA gained 55.7%. The Zacks Consensus Estimate for 2022 earnings has been revised upward by 6.1% over the past 30 days.With assets of $208 billion, Cincinnati, HO-based Fifth Third Bancorp has 1,110 full-service banking centers across 11 states throughout the Midwestern and Southeastern regions of the United States.FITB’s efforts to expand the non-interest income base over the years with the help of strategic partnerships and acquisitions in different industries such as healthcare (including the acquisition of Coker Capital in 2020 and buyout of Provide in August 2021) will support commercial verticals and result in revenue growth, expense savings as well as operational excellence.The company remains focused on branch optimization to enhance its presence in high-growth markets. Fifth Third Bancorp is re-allocating its branch network to enhance its footprint in the Southeast and lower its presence in the Midwest. In sync with this, nearly 25 branch openings are targeted annually through 2025. It is also on track to close 42 additional branches in the first quarter of 2022 (primarily in the Midwest).A strong balance sheet and investment-grade long-term credit ratings from leading credit rating agencies are likely to continue supporting the company’s growth. Also, Fifth Third Bancorp’s sustainable capital deployments reflect a solid liquidity position and will keep enhancing shareholder value.Shares of FITB, which has a market cap of $31.8 billion, rose 58% in 2021. The company’s earnings estimates for 2022 have moved north by 1.2% over the past four weeks.San Francisco-based Wells Fargo is one of the largest financial services companies in the United States. WFC had more than $1.9 trillion in assets and $1.4 trillion in deposits as of Sep 30, 2021.Wells Fargo continues to build on its deposits base, which witnessed a five-year CAGR of (2016-2020) of nearly 2%, with the trend sustaining in the first nine months of 2021. With the solid economic recovery and resumption of business activities, the deposit balance is likely to keep improving. This is likely to support WFC’s liquidity position.Wells Fargo’s prudent expense management initiatives support its financials. The company is focused on reducing its expense base by streamlining organizational structure, closing branches and reducing headcount by optimizing operations and other back-office teams.Normalizing credit quality, healthy balance sheet and investment-grade credit ratings are other tailwinds, which will continue supporting Wells Fargo’s financials. The company’s impressive capital deployment plans are sustainable, driven by earnings strength.The stock, which has a market cap of $214.7 billion, increased 59% last year. Over the past month, WFC’s 2022 earnings estimates have been revised upward by 4.7%.Headquartered in Pasadena, CA, East West Bancorp serves as a financial bridge between the United States and China by providing various consumer and commercial banking services to the Asian-American community. EWBC operates through more than 120 locations in the United States and China.East West Bancorp is focused on its organic growth strategy. Though the company’s NII, which is the primary source of its revenues, declined in 2020, the same witnessed a CAGR of 5.1% over the last four years (2017-2020). The momentum persisted in the first nine months of 2021 as well. Improvement in loans and deposits is expected to further support NII.East West Bancorp’s capital deployment activities seem impressive. In January 2021, the company hiked its quarterly dividend by 20% to 33 cents per share. EWBC has a share repurchase plan in place. As of Sep 30, 2021, $354.1 million worth of shares were left to be repurchased under the buyback plan.Growth in loans and deposits and a strong balance sheet position and investment-grade credit ratings are likely to keep supporting East West Bancorp’s financials. The stock, with a market cap of $11.7 billion, jumped 55.1% in 2021. EWBC’s earnings estimates for 2022 have moved upward by 1% over the past 30 days.Western Alliance, based in Phoenix, AZ, provides a wide range of deposit, lending, treasury management, international banking and online banking products and services. As of Sep 30, 2021, WAL had $48.3 billion in total assets, $34.6 billion in net loans held for investments and $45.3 million in total deposits.Western Alliance has been witnessing a steady improvement in revenues. Over the last five years, the top line recorded a CAGR of 15.3%, with the uptrend continuing in the first three quarters of 2021. Rising loans and deposit balance, efforts to strengthen fee income sources and an improving economy will drive revenues in the upcoming quarters.The company has been growing through strategic buyouts too. In April, Western Alliance closed the previously announced acquisition of Aris Mortgage Holding Company, LLC for nearly $1.22 billion. The acquisition complements the company’s national commercial businesses and expands its mortgage-related offerings. This diversifies WAL’s revenue mix by expanding sources of non-interest income.WAL’s capital deployment activities seem impressive. During the third quarter of 2021, the company hiked its quarterly dividend by 40% to 35 cents per share. This was the first dividend hike by the company since it started paying the same from August 2019.The stock, which has a market cap of $12.1 billion, surged 79.6% last year. WAL’s 2022 earnings estimates have been revised upward by 1.8% over the past month. Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Wells Fargo & Company (WFC): Free Stock Analysis Report Fifth Third Bancorp (FITB): Free Stock Analysis Report Comerica Incorporated (CMA): Free Stock Analysis Report Western Alliance Bancorporation (WAL): Free Stock Analysis Report East West Bancorp, Inc. (EWBC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 6th, 2022

Top Classic Value Stocks to Start 2022

What is better than starting the new year with dirt-cheap stocks with the top Zacks Ranks? (0:45) - Finding Cheap Stocks For 2022: Stock Screener(6:15) - Learning From Last Years Classic Value Stock List(11:30) - Tracey’s Top Stock Picks For The New Year(24:10) - Stocks To Keep On Your Radar: Watch List(32:30) - Episode Roundup: TOL, ARW, KSS, TTE, LAD, GM, TM, FUJHY, STLA, DXC, GEF, PAM               Podcast@Zacks.com Welcome to Episode #263 of the Value Investor Podcast.Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.This week, it’s time to take a look at the classic value stocks.Every year, in the first week of the new year, Tracey runs a stock screen for classic value stocks. Last year, this screen returned 9 stocks, among them insurance and large financial services companies.This year, the screen returned a more intriguing list.Maybe it’s time to take a look at value stocks in 2022?How to Screen for Classic Value StocksThis screen for classic value stocks has all the value fundamentals, with the addition of the highest Zacks Ranks of Buy and Strong Buy, and the highest Zacks Style Scores for Value, of A and B.This screen includes a P/E under 20, a P/S ratio under 1.0, a P/B ratio under 2.0, a P/Cash Flow under 20 and a PEG under 1.0.With this many factors, it’s bound to be a short list. How many dirt-cheap value stocks with the top Zacks Ranks are there?Turns out there are 12 to start this year. Tracey picked out 5.5 Top Classic Value Stocks for 2022 1.       Toll Brothers TOLToll Brothers is the largest publicly-traded luxury home builder in America.Shares are up 67.2% over the last year and trade near all-time highs.But Toll Brothers is still dirt cheap with a forward P/E of just 7.4. It also has a PEG ratio of just 0.3. Toll has both growth and value, a rare combination.Analysts expect Toll Brothers earnings to grow 46.3% in fiscal 2022 and another 16% in fiscal 2023.Is it too late to buy Toll Brothers for this hot housing cycle?2.       Arrow Electronics ARWArrow Electronics, which guides innovation forward for over 180,000 tech manufacturers and service providers, is expected to see sales grow 19% this year to $34.3 billion.Arrow’s earnings are forecast to grow 88% in 2021 and another 6.5% in 2022.Arrow Electronics shares are up 40% in the last year, and are trading at 5-year highs, but they’re still cheap.Arrow has a forward P/E of 8.8 and a P/S ratio of just 0.3.Should you buy Arrow even as it’s hitting new highs?3.       Kohl’s Corp. KSSKohl’s Corp. is a retailer with 1,100 stores in 49 states. In its third quarter earnings, it raised its full year guidance as comparable sales were up 14.7% compared to a year ago.Kohl’s raised its earnings guidance range, and the analysts did the same, as earnings are expected to rise 704% in fiscal 2021.Over the last year, Kohl’s shares have gained 28% but have weakened over the past few weeks.They’re cheaper than ever with a forward P/E of just 6.8 and a PEG ratio of 0.9.Should Kohl’s be a retailer on your short list this year?4.       TotalEnergies SE TTETotalEnergies is a French oil company, which operates in exploration and production, gas and renewables and petrochemicals. It has a $136.3 billion market cap.In the third quarter, TotalEnergies’ cash flow was up 30% year-over-year as oil and gas prices soared.TotalEnergies can easily pay its juicy dividend, currently yielding 6%.Shares were up 20.9% in the last year, but TotalEnergies is still cheap with a forward P/E of just 7.1 and a Price/Cash Flow of 5.Earnings are expected to rise 10.2% in 2022.Should income investors be looking at TotalEnergies in 2022?5.       Lithia Motors LADLithia Motors owns auto dealerships and Driveway, its online auto buying and financing business.On Jan 5, Lithia announced that Driveway had blown by its December estimates, posting 1,650 transactions, well above the 1,250 estimate.That is a 15,000 annual-run rate.Lithia Motors doesn’t believe these sales are being pulled from its brick-and-mortar business as 96% of Driveway’s customers were new to Lithia.Lithia shares remain cheap as earnings are expected to rise 110% in 2021. It has a forward P/E of just 8 and a PEG ratio of 0.4.Should investors be jumping on Lithia Motors on this share weakness?Find out the Other 7 Stocks in the Classic Value ScreenThese are just 5 of the 12 stocks in the top classic value stock screen.What are the other 7?Tune into this week’s podcast to find out. Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First To New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kohl's Corporation (KSS): Free Stock Analysis Report Arrow Electronics, Inc. (ARW): Free Stock Analysis Report Toll Brothers Inc. (TOL): Free Stock Analysis Report Lithia Motors, Inc. (LAD): Free Stock Analysis Report TotalEnergies SE Sponsored ADR (TTE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 6th, 2022

Molina Healthcare (MOH) Buys Cigna"s TX Medicaid Contracts

Molina Healthcare (MOH) purchases the Texas Medicaid contracts of Cigna to bolster its presence in the Texas region. Molina Healthcare, Inc. MOH completed its pending buyout of Cigna’s Texas Medicaid contracts. The transaction, declared in April 2021, was completed on Jan 1, 2022.Rationale Behind the DealWith this deal, the leading health insurer will be able to expand its presence in the Texas area. As of Nov 30, 2021, Cigna’s Texas Medicaid business served around 50,000 members.As announced in April last year, Molina Healthcare expects to gain around $1 billion of new annual revenues with this prudent move. MOH will be able to meet the requirements of additional Medicaid and MMP members in Texas. With the COVID-19 pandemic taking a toll on our lives, more people are enrolling in Medicaid.The recent move is well-timed as ample prospects are prevalent in the Medicaid market, primarily targeting the low-income groups. The latest economic downturn, which rendered people jobless and reduced their income made them more eligible for Medicaid coverage.Continuous program expansions across several states can be cited as one of the primary drivers for the Medicaid market.Molina Healthcare's Medicaid business has been contributing to its overall growth for a while. MOH ended 2020 with 3.6 million Medicaid members.Acquisition StoryAcquisitions have been a major component of MOH’s growth strategy. MOH is keen on venturing on its core capabilities like Medicaid and Medicare and leaves no stone unturned to expand its portfolio.The currently Zacks Rank #2 (Buy) player completed the buyout of Magellan Complete Care (MCC) line of business of Magellan Health in 2020, which helped it acquire 3.6 million members across 18 states. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.MOH also closed other buyouts, such as YourCare and Passport in 2020, which led to membership increase. Molina Healthcare also acquired AgeWell’s managed lonwg-term care business in New York.Shares of MOH have gained 46.5% in a year’s time, outperforming its industry’s growth of 38.8%. Image Source: Zacks Investment ResearchOther healthcare providers boasting a strong Medicaid business across the United States include Humana Inc. HUM, Centene Corporation CNC and Anthem, Inc ANTM.Humana's Medicaid business has also been contributing to its top line for years now. Revenues from Medicaid and other businesses increased 6.7% year over year in the first nine months of 2021. The South Carolina plan is also on track, which is expected to go live in 2022.Centene's Medicaid business is also poised well for growth owing to contract wins and membership growth. CNC's 2020 buyout of WellCare diversified its business by strengthening its scale and adding more than 12 million Medicaid members.Anthem recently entered into an agreement to buy Integra Managed Care from a wholly-owned indirect unit of Personal Touch Holding Corporation to bolster its Medicaid business portfolio. The acquisitions of Missouri and Nebraska Medicaid plans of WellCare Health in January 2020 also added around 300,000 Medicaid members under its coverage.Shares of HUM, CNC and ANTM have gained 12.9%, 33.1% and 45.9% each in a year’s time. Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Humana Inc. (HUM): Free Stock Analysis Report Molina Healthcare, Inc (MOH): Free Stock Analysis Report Centene Corporation (CNC): Free Stock Analysis Report Anthem, Inc. (ANTM): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 4th, 2022

Forget Fixed Income: Add This Tax-Advantaged Investment Vehicle Instead

Forget Fixed Income: Add This Tax-Advantaged Investment Vehicle Instead While the diversification benefits of investing in fixed income securities are substantial over time, it’s difficult to justify investing in bonds in the current environment with yields set to rise and inflation eating away at any nominal return. Contrary to conventional wisdom, the opportunity still exists for investors to create a reliable stream of income from the equity markets. There are several dividend strategies that the best investors incorporate into their investment mix including blue chip dividend-paying stocks, real estate investment trusts (REITs), and Master Limited Partnerships (MLPs).Investing in companies that have a history of raising dividends can be a very reliable indicator of future earnings growth. Corporate directors know far better than anyone else the details and financial condition of their companies, including the outlook for future earnings growth. Management will only raise dividends if they have every reason to believe that future earnings growth will be able to sustain higher dividend payouts. A steady trend of rising dividends can alert investors to healthy, growing businesses. We’re going to focus on 3 MLPs that have consistently raised dividends.Due to their favorable tax treatment, this type of high-yield, high-quality investment vehicle has been providing investors with favorable returns for many years. There are countless and relatively unknown MLPs that have consistently raised their dividends over a long timeframe, providing investors with high returns. MLPs do not pay income taxes and trade on major stock exchanges.MLPs are different than other traditional investment structures – they are partnerships. A general partner is responsible for running the MLP, and individual investors serve as the limited partners. MLPs must pay their profits directly to shareholders and pay much bigger dividends because they pay no tax. The income generated from the MLP is allocated amongst all partners in proportion to their ownership interest.Relative to dividend-paying stocks, MLPs are relatively unknown and are largely ignored by the financial media. MLPs are able to sidestep the IRS and pass their earnings directly to shareholders making them the ideal investment for individual investors.  Investing in MLPs also comes with a special tax benefit for MLP dividends which are referred to as distributions. The IRS considers 80-90% of MLP distributions as a return of capital, which means investors can defer taxes on their gains for many years until they sell their shares. MLPs have attracted a diverse set of companies in many industries due to their favorable tax treatment.Below we will analyze three MLPs within the Zacks Oil & Gas – Refining and Marketing – Master Limited Partnerships industry group. This industry group is ranked within the top 7% of all Zacks Ranked Industries. Energy is also leading the charge in the first few trading days this year and was the #1 S&P sector last year.Sunoco LP (SUN)Sunoco is a Master Limited Partnership that distributes motor fuel to approximately 10,000 convenience stores, independent dealers, commercial customers, and distributors in more than 30 U.S. states. Founded in 2012 and headquartered in Dallas, TX, Sunoco also leases real estate properties and operates terminal facilities on the Hawaiian Islands.A Zacks #2 Buy stock, SUN has not decreased its dividend since its founding; the company’s current dividend yield is 8.03%. Trading at a relatively undervalued 8.35 forward P/E, SUN has exceeded earnings estimates in four of the past six quarters. SUN is averaging a positive earnings surprise of 47.31% over the past four quarters, supporting its climb of nearly 60% in the past year.Sunoco LP Price, Consensus and EPS Surprise SUN’s distribution networks reflect a strong business and sustainable cash flows which will continue to drive the share price. Sunoco is among the largest motor fuel distributors in the United States. SUN expects fuel volumes for 2021 to have totaled approximately 7.75 billion gallons, rising from the 7.09 billion in 2020.Analysts covering SUN have increased their full-year earnings estimates by 1.1% in the past 60 days. The Zacks Consensus Estimate for 2021 EPS now stands at $6.41, an astounding 743.42% growth rate relative to last year. SUN is scheduled to report earnings on February 16th.Global Partners LP (GLP)Global Partners is engaged in the purchasing, selling, storing, and logistics of transporting gasoline, distillates, oil, renewable fuels, and propane to a wide array of customers in the New England region and New York. Founded in 2005 and based in Waltham, MA, Global Partners has a portfolio of over 1,548 owned, leased, or supplied gasoline stations.GLP has surpassed earnings estimates in 15 out of the last 19 quarters. A Zacks #2 (Buy) stock, this MLP trades at a reasonable 13.79 forward P/E and has a current dividend yield of 9.53%. GLP has posted a trailing four-quarter average earnings beat of +13.4%, most recently beating by +38.71% when the company delivered EPS of $0.86 back in September. GLP has climbed by over 60% in the past year. Global Partners LP Price, Consensus and EPS Surprise Looking into 2022, GLP revenues are anticipated to grow by 25.53% compared to 2021. In the past 60 days, earnings estimates for next year have increased by 28.68%. The Zacks Consensus Estimate for 2022 EPS sits at $1.75, which would represent 56.25% growth relative to last year. GLP is slated to announce quarterly earnings on March 4th.Phillips 66 Partners LP (PSXP)Phillips 66 Partners is an energy company that owns, operates, develops and acquires midstream assets. The company offers transportation, processing, storage, and fractionation of crude oil, petroleum products, and natural gas liquids. PSXP was founded in 2013 and is headquartered in Houston, TX.PSXP has never decreased its dividend since its founding; the MLP’s current yield is 9.22%. The company is relatively undervalued, trading at a 9.24 forward P/E. PSXP most recently reported EPS of $1.00 in October of last year, a 1% positive surprise over consensus. The stock is up nearly 67% in the past year. Phillips 66 Partners LP Price, Consensus and EPS Surprise With a Zacks #2 ranking, Phillips 66 Partners is least exposed to price fluctuations in commodities as it generates stable fee-based revenues under long-term contracts from its diverse base of midstream energy assets across the United States. The partnership’s cash flows are highly stable and predictable which should further support its share price.The Zacks Consensus Estimate for 2022 EPS sits at $4.11, which would translate to growth of 51.1% versus last year. PSXP is scheduled for its next earnings report on February 4th.It’s clear that MLP investing is something that every individual investor should consider. The steady stream of income along with the potential for price appreciation warrant a closer look into adding these MLPs to your portfolio mix. Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sunoco LP (SUN): Free Stock Analysis Report Global Partners LP (GLP): Free Stock Analysis Report Phillips 66 Partners LP (PSXP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 4th, 2022

Why Is Five Below (FIVE) Up 3.9% Since Last Earnings Report?

Five Below (FIVE) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues. A month has gone by since the last earnings report for Five Below (FIVE). Shares have added about 3.9% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Five Below due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Five Below Q3 Earnings Beat, Comparable Sales Up 14.8%In spite of a challenging supply chain environment, Five Below, Inc. posted stellar third-quarter results, wherein both the top and the bottom lines not only surpassed the Zacks Consensus Estimate but also improved year over year. Impressive comparable sales run also continued in the quarter. Better-than-expected performance, prompted management to provide an upbeat view for fiscal 2021.Five Below stated that the holiday season is off to a robust start. The company’s focus on providing trend-right products, strengthening digital and distribution capabilities as well as delivering better WOW products, including the Five Beyond offering, bode well. It is adding assisted checkout capabilities and committed toward providing same-day delivery service to make shopping convenient.Let’s IntrospectFive Below delivered third-quarter fiscal 2021 earnings of 43 cents a share that topped the Zacks Consensus Estimate of 29 cents. Remarkably, the bottom line improved from earnings of 36 cents reported in third-quarter fiscal 2020.Net sales of $607.6 million came ahead of the Zacks Consensus Estimate of $562.7 million. The metric rose 27.5% from revenues of $476.6 million in third-quarter fiscal 2020, thanks to solid product trends that drove traffic and new customers to outlets.We note that comparable sales for the quarter under review climbed 14.8% compared with an increase of 12.8% registered in the year-ago period. The growth was driven by increase in comp transactions of 14.3% and a comp ticket increase of 0.5%.Gross profit surged 33.9% year over year to $202.4 million, while gross margin expanded 160 basis points to 33.3%. The increase in gross margin was driven mainly by occupancy leverage, thanks to strong sales results which helped offset higher inbound freight costs. Also, lower distribution labor and store freight expense, primarily due to the shift of receipts and flow of inventory to stores from the third quarter into the fourth quarter contributed to the gross margin.We note that SG&A expenses climbed 26.1% to $159.9 million during the quarter. As a percentage of sales, SG&A expenses decreased approximately 30 basis points to 26.3%, driven primarily by fixed cost leverage, offset in part by higher incentive compensation. Operating income amounted to $42.4 million during the quarter under discussion, up 75.1% from $24.2 million in the third quarter of fiscal 2020. Operating margin expanded 190 basis points to 7% during the quarter.FinancialsFive Below ended the quarter with cash and cash equivalents of $86.8 million and short-term investment securities of $224.6 million. Total shareholders’ equity was $1,033.2 million as of Oct 30, 2021.Management incurred capital expenditures of approximately $213.2 million during the 39-week period ended Oct 30, 2021. Five Below anticipates capital expenditures of approximately $310 million in fiscal 2021, excluding the impact of tenant allowances.Store UpdatesDuring the quarter, Five Below opened 52 new stores across 24 states, including entering the 40th state, New Mexico. This took the total count to 1,173 stores, as of Oct 30, 2021, reflecting an increase of 15.2% from the year-ago count. The company also informed that with the additional 17 new stores opened in the final quarter, it has completed 171 new openings for the fiscal year.GuidanceFive Below envisions fourth-quarter fiscal 2021 net sales in the range of $985 million to $1,005 million compared with $858.5 million reported in the year-ago period. The company guided 2-4% increase in comparable sales versus the record comparable sales growth of 13.8% last year. Management forecast fourth-quarter earnings between $2.36 and $2.48 per share compared with $2.20 in the prior-year period.The company foresees operating margin to delever by about 125 basis points in the fourth quarter, as store and marketing expenses are expected to be higher. It also expects gross margin to delever slightly when compared with the prior-year period, as some of the costs associated with the handling of delayed inventory receipts, shifted from the third quarter into the fourth quarter.Management projected fiscal 2021 net sales in the band of $2,837 million to $2,857 million compared with $1,962.1 million reported in the year-ago period. The company anticipates a 30% jump in comparable sales. Management forecast earnings between $4.82 and $4.94 per share compared with $2.20 in the prior-year period, including benefit from share-based accounting of approximately 8 cents. The company anticipates operating margin to reach a record 13% or leverage of over 120 basis points versus fiscal 2019.How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended upward during the past month.VGM ScoresAt this time, Five Below has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Five Below has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Five Below, Inc. (FIVE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 2nd, 2022

5 Incredible Small-Cap Stocks to Buy for a Continued Rally in 2022

Small cap stocks offer growth at high risk but there is a method of reducing the work and lowering the risk. Small-cap stocks generally refer to those stocks that have a market valuation of less than a billion dollars. But the definition is a bit fluid because some consider market capitalizations of under $2 billion to be small capitalizations. It’s essentially a way of classifying stocks based on their size.Because small-cap stocks differ in their growth potential and risk profile, they are a different kind of security. They tend to be newer companies that are still working out their business models, products or strategies. At this stage of a company’s life, it’s very likely that it’s making little to no money or re-investing whatever little it makes into more research. If the product research is more complex, the company could have no income at all and be dependent on investors to fund the research. Once public, its valuation would be totally dependent on its expected growth potential. If the company is in the commercialization stage, or has started generating revenue, there’s still no guarantee that customers will like the offering. And if, for any reason, the effort doesn’t pay off, the company would go out of business. So these stocks are inherently risky.They can also move a lot in a single day and not everyone can stomach this kind of volatility.An added problem is that small-cap stocks are not as well-known because usually analysts don’t cover them. So there’s limited information about them. You have to largely do your own research on the market, the scope of growth and also the company’s performance. This is not easy to do.But for those that want to put in the effort, this is a way to uncover that one stock that will grow into a mega-cap and offset all the losses that you’ve made everywhere else. Since mutual funds and institutional investors are usually not invested in them, you can also bet on the fact that they will jump in later, when the company is on stronger footing. And this of course will send share prices even higher, helping you multiply your gains.So while it’s clear that small-cap stocks are very risky, they are also the source of big gains for investors who are willing to do the hard work and then take some risk.At Zacks, we have the means of reducing the hard work and lowering the risk with proprietary technology captured in the Zacks Rank for stocks, the Zacks Industry Rank and the style scoring system that can be combined with other data to separate the grain from the chaff.That’s what I’ve attempted to do here with these 5 stocks that are all under a billion dollars in market cap-Titan Machinery TITNTitan Machinery has been around for several decades. So it’s a relatively lower-risk stock. The company owns and operates a network of full-service agricultural and construction equipment stores in the U.S. and Europe under the CNH and other brands. Its agricultural equipment includes machinery and attachments for use in the production of food, fiber, feed grain, renewable energy, as well as and home and garden applications. Its construction equipment comprises heavy construction machinery, light industrial machinery for commercial and residential construction, road and highway construction machinery, and energy and forestry operations. It also rents equipment and offers repair and maintenance, and other services. Titan Machinery is headquartered in West Fargo, North Dakota.Titan Machinery shares carry a Zacks Rank #1 (Strong Buy) and Growth Score A. It belongs to the Automotive - Retail and Whole Sales industry (top 9% of Zacks-classified industries). Buy-ranked stocks that also belong to attractive industries have better chances of appreciation in the near term. And a Growth Score of A or B is another indicator of potential growth.Titan Machinery shares are up 64.6% year to date. And there’s good reason to think that this winning streak will continue into 2022.Although there’s a single analyst providing estimates, the surprise history seems to indicate that he is quite conservative (Titan Machinery topped estimates in each of the last four quarters at an average rate of 93.3%). The current expectation is for the company to grow revenue and earnings by a respective 24.8% and 103.2% in the year ending Jan 2022. In the following year, Titan Machinery is expected to grow revenue and earnings by 0.4% and 12.3%, respectively.What’s more, the estimate revisions history is positive, with current-year estimates moving up from $1.95 to 2.56 over the last 90 days. The estimate for the following year has gone from $2.45 to $2.87.USA Truck USAKUSA Truck has also been here for almost as long as Titan Machinery. So of course, it’s another company with relatively low risk. The company operates as a truckload carrier in the U.S., Mexico and Canada and operates through the Trucking and USAT Logistics segments. The Trucking segment offers truckload motor carrier services as a medium-haul common and contract carrier; and freight services. The USAT Logistics segment offers freight brokerage, logistics and rail intermodal services. As of December 31, 2020, the company operated a fleet of 2,065 tractors, which included 628 independent contractor tractors; and 6,263 trailers. USA Truck is headquartered in Van Buren, Arkansas.USA Truck shares carry a Zacks Rank #2 (Buy) and Growth Score A. It belongs to the Transportation – Truck industry (top 8%).Shares of USA Truck are up 116.3% year to date. And in all probability there will be additional upside next year.The Zacks Consensus Estimate for USA Truck has been solidly beaten in the last four quarters at an average rate of 68.7%. And current estimates (provided by 2 analysts) are calling for 19.3% growth next year, on top of the 220.6% growth this year. The estimate revisions history is also positive. OneWater Marine Inc. ONEWOneWater Marine is a premium recreational boat retailer operating principally in the United States. It offers new and pre-owned boats, yachts, parts and accessories, finance and insurance products, maintenance and repair services and ancillary services. It also rents boats and other watercraft. As of September 30, 2021, it operated 70 stores across 11 U.S. states. OneWater Marine is based in Buford, Georgia.OneWater Marine shares carry a Zacks Rank #1 and Growth Score A. It belongs to the Leisure and Recreation Products industry (top 22%).OneWater Marine shares are up 82.8% year to date. The four analysts covering it expect revenue and earnings for the current year ending Sep 2022 to increase a respective 24.1% and 14.4%. The estimates for the following years are expected to increase a respective 8.0% and 4.6%. But the substantial increases in estimates for both years indicate that actual growth will be significantly higher. The current-year estimate, for instance, is up $1.01 (14.5%) in the last 90 days while the estimate for the following year is up 71 cents (9.3%) during the same time period. What’s more, the company has topped estimates in each of the last four quarters at an average rate of 186.2% although admittedly, the surprise percentage has come down quite a it in the last two quarters.Beazer Homes USA, Inc.  BZHBeazer Homes USA designs, builds and sells single family homes. The company designs homes to appeal primarily to entry-level and first move-up home buyers. Its objective is to provide customers with homes that incorporate quality and value. The company's subsidiary, Beazer Mortgage, originates the mortgages for the company's home buyers.Beazer Homes shares carry a Zacks Rank #1 and Growth Score A. They belong to the Building Products - Home Builders industry (top 39%).While Beazer Homes shares have appreciated an impressive 49.9% year to date, there seems to be further upside in them.  That’s because of the company’s strong earnings potential. In the year ending Sep 2022, analysts expect the company to grow revenue and earnings by 13.6% and 23.7%, respectively. The following year, growth is expected to be 9.2% and 6.4% respectively. But a look at the estimate revisions trajectory seems to indicate that these numbers are only preliminary and actual growth will be much higher. The estimate for 2022 is up $1.56 (44.8%) in the last 90 days. The 2023 estimate is up $1.34 (33.6%) during the same time period. The earnings beat in the last quarter of 91.5% is greater than the 49.9% average surprise in the three preceding quarters.Chico's FAS, Inc. CHSChico's FAS is a cultivator of brands serving the lifestyle needs of fashion-savvy women 30 years and older. Their three brands are Chico's, White House Black Market and Soma. Their brands are all specialty retailers of private label women's apparel, accessories and related products. The company currently operates boutiques and outlets throughout the U.S. and Canada, and also has an online presence for each brand.The Zacks Rank #1 stock has a Growth Score of A and belongs to the Retail - Apparel and Shoes industry (top 22%).Chico's FAS shares are up 211.4% over the past year. Analyst estimates indicate that while growth rates could come down as the reopening excitement wanes (or the Omicron scare changes things) the overall level of business will continue to recover and grow.As a result, despite growing 37.7% in the current fiscal year ending Jan 2022 revenue is expected to grow another 5.0% the following year. The same is true for per share earnings. The current year will see the reversing of a $3.11 loss in the prior year to record profit of 37 cents this year. The following year, Chico's FAS earnings are currently expected to grow 23.0% to 45 cents. What’s more, the current year estimate has more than doubled in the last 30 days although the 2023 estimate is just up just a penny. 3-Month Price PerformanceImage Source: Zacks Investment Research Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chico's FAS, Inc. (CHS): Free Stock Analysis Report Titan Machinery Inc. (TITN): Free Stock Analysis Report Beazer Homes USA, Inc. (BZH): Free Stock Analysis Report USA Truck, Inc. (USAK): Free Stock Analysis Report OneWater Marine Inc. (ONEW): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 27th, 2021

5 Cheap Dividend Stocks to Buy and Hold This Year

Dividend stocks typically do well for the long term but you must keep these criteria in mind when choosing them. Choosing stocks that generate income in uncertain times is a no-brainer. Not only does the income offset losses from your investment, but it also supports stock prices. That’s because dividends are often used for buying more stock when prices fall. And when more stock is bought, prices rise again.But the real challenge is in selecting these stocks. And in understanding why we are choosing what we’re choosing.In general, a dividend paying stock belongs to a more mature company. By that we mean that the company generates sufficient cash to pay a dividend and still has enough left over to invest in its growth initiatives. And getting to this stage takes time.Alternatively, it has limited growth opportunities and therefore pays out most of what it makes to its shareholders.Now both these options may be good when you’re investing for the short term. But when it’s for a longer period of time, which is really ideal because that’s when you get to see some real capital appreciation as well, that’s when it’s better to opt for companies that also have growth potential.Because with no growth ahead of it, there will be no chances of growing the dividend stream. And if the dividend stream doesn’t grow, the real income is obviously lower over time.One sure sign that the company is still growing is the revenue growth trajectory in the last few years. While earnings growth is also a positive, there are many situations in which a company is able to generate earnings growth without growing the revenue. Earnings growth without revenue growth is basically an indicator of poor quality of earnings because it is not sustainable. Cost cutting or increased efficiencies can only go so far.So putting all that together we come up with a few criteria that are a must when choosing dividend-paying stocks. First, we want companies that are neither too young nor too mature, preferably with a market cap of over $2 billion. Second, we want to ensure that the dividend has been growing in recent history, say for the last five years. Third, it offers an attractive yield (dividend per share/price per share) indicating that you’re not paying too much for what you’re making. And fourth, the company has been generating sales growth in the last few years. We can add the Zacks stock Rank to the mix, because stocks ranked #1 (Strong Buy) or #2 (Buy) have historically shown good short-term upside potential. If the company belongs to an industry in the top 50% of Zacks-classified industries, all the better, because that again increases the chances of upside potential. And finally, it’s best to check for a Value Score of A to make sure you’re avoiding the value traps.The following stocks satisfy all the above criteria-   Camping World Holdings CWHThrough its 175 retail locations and membership clubs across 38 U.S. states and ecommerce platforms, Camping World Holdings offers services, protection plans, products and resources for recreational vehicle (RV) enthusiasts under the Camping World and Good Sam brands. It offers new and used RVs for sale, vehicle finance, service and maintenance, roadside assistance and other services. It also offers equipment, gear and supplies for camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, marine and watersports, as well as other outdoor activities. Camping World Holdings is based in Lincolnshire, United States.Camping World has a Zacks Rank #2, a Value Score of A and belongs to the Leisure and Recreation Services industry (top 35%).Camping World has a 5-year historical dividend growth rate of 19.34% and its current dividend yields 5.15%.The company has generated average sales growth of 11.5% in the last five years.Triton International Ltd. TRTNTriton International was formed following the July 12, 2016 all-stock merger between Triton Container International Limited and TAL International Group. Triton International, based in Hamilton, Bermuda, is the largest lessor of intermodal containers (large steel boxes that are used for transporting freight by ship/rail/truck). The company also offers leasing chassis, which are used for transporting containers.Triton International  has a Zacks Rank #2 and Value Score of A. It belongs to the Transportation - Equipment and Leasing industry (top 40%).Triton International ‘s historical performance is underpinned by its steady sales growth of 8.0% that has enabled steady dividend increase of 4.42%. The current dividend yields 4.42%.United Bankshares UBSIUnited Bankshares is a bank holding company whose business is the operation of its bank subsidiaries. All of United's subsidiary banks are full-service commercial banks. Included among the banking services offered are the acceptance of deposits in checking, savings, time and money market accounts; the making and servicing of personal, commercial, floor plan and student loans; and the making of construction and real estate loans. Also offered are individual retirement accounts, safe deposit boxes, wire transfers and other standard banking products and services.United Bankshares has a Zacks Rank #2 and Value Score of B. It belongs to the Banks - Southeast industry (top 14%).In the last five years, United Bankshares’ sales have growth 16.5%, supporting dividend growth of 1.42%. Its current dividend yields 4.08%.Fulton Financial FULTFulton Financial Corp. is a bank holding company. It provides retail and commercial banking and investment management and trust services in central and eastern Pennsylvania, southern New Jersey, northern Maryland and southern Delaware through its wholly-owned subsidiaries: Fulton Bank, Lebanon Valley Farmers Bank, Swineford National Bank, Lafayette Ambassador Bank, FNB Bank, N.A., Great Valley Bank, Hagerstown Trust Company, Delaware National Bank, The Bank of Gloucester County, The Woodstown National Bank & Trust Company, and The Peoples Bank of Elkton.Fulton Financial’s shares carry a Zacks Rank #2 and Value Score B. It belongs to the Banks - Northeast industry (top 17%).Fulton Financial has grown its dividend by 6.21% in the last five years and currently pays a dividend that yields 3.35%.Fulton Financial’s revenues have grown 5.4% in the last five years.Greif Inc. GEFDelaware, OH-based Greif is a leading global producer of industrial packaging products and services with manufacturing facilities located in over 40 countries. It offers a comprehensive line of rigid industrial packaging products and containerboard and corrugated products for niche markets in North America. It is also a leading global producer of flexible intermediate bulk containers.Greif has a Zacks Rank #1 and Value Score of A. It belongs to the Containers - Paper and Packaging industry (top 42%). Greif’s 5-year historical dividend growth is 1.35% and its current dividend yields 3.22%.Greif has generated average sales growth of 9.64% in the last five years.3-Month Price MovementImage Source: Zacks Investment Research Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Camping World (CWH): Free Stock Analysis Report Greif, Inc. (GEF): Free Stock Analysis Report Fulton Financial Corporation (FULT): Free Stock Analysis Report United Bankshares, Inc. (UBSI): Free Stock Analysis Report Triton International Limited (TRTN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 23rd, 2021

Tenet Healthcare (THC) Soars 95.8% YTD: More Room to Run?

Banking on a solid guidance, enhanced portfolio and strategic measures, Tenet Healthcare (THC) holds enough potential to reap benefits for investors. Tenet Healthcare Corporation THC has been in investors’ good books for a while now on the back of its strategic initiatives, divestitures and cost-reduction efforts.Over the past 30 days, the hospital player has witnessed its 2022 earnings estimate move 0.9% north.Shares of this currently Zacks Rank #2 (Buy) hospital organization have skyrocketed 95.8% year to date compared with its industry’s growth of 37.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Image Source: Zacks Investment ResearchTenet Healthcare is steadily undertaking strategic divestitures to shed its non-core and unprofitable business units to streamline operations and repay debt. THC’s spin-off of its Conifer business into an independent publicly-traded company is expected to close by the end of 2021. THC is likely to reduce its debt burden using the proceeds from this transaction.This leading player in the hospital industry continuously gains from its restructuring initiatives that lowered costs to a great extent. Tenet Healthcare also recently announced the sale of its Miami-based hospitals for business rejig.THC has also been gaining leverage from its Ambulatory Care segment for a while. Tenet Healthcare’s revenues are steadily gaining from its USPI unit’s performance and also its 2020 buyout of the SCD Centers. USPI had interests in 318 ambulatory surgery centers and 24 surgical hospitals in 31 states as of Sep 30, 2021.Tenet Healthcare along with its USPI unit also completed the pending buyout of SurgCenter Development (SCD). The deal will not only boost USPI's footprint in the existing markets, such as Florida, but also enable THC to enter new markets like Michigan.THC continues boosting its presence and expanding its portfolio through numerous acquisitions, partnerships and strategic alliances. Tenet Healthcare earlier partnered with biggies like Blue Cross Blue Shield of Texas, Cigna, Aetna, UnitedHealth, Humana and so on. THC also reached an agreement with Compass Surgical Partners to acquire their interest and management responsibilities in 9 ASCs. Tenet Healthcare is also penetrating further in North Carolina.Concurrent with third-quarter results, Tenet Healthcare updated its outlook for 2021. For the current year, THC projects net income per share to be $7.09-$7.50, higher than the prior guidance of $6.25-$7.17.Net operating revenues are anticipated between $19.5 and $19.8 billion, up from the prior forecast of $19.25-$19.65 billion.Adjusted EPS is expected within $6.15-$6.38, higher than the previous guidance of $5.23-$5.73. This should instill investors’ confidence in the stock.However, steep expenses remain a concern. Further Upside Left?We believe that Tenet Healthcare is well-poised for growth on the back of various strategic actions. The stock carries a  VGM Score  of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.  The Zacks Consensus Estimate for Tenet Healthcare’s 2021 earnings indicates an improvement of 34.5% from the year-ago reported figure.Other Stocks to ConsiderSome other top-ranked stocks in the medical sector are Molina Healthcare Inc. MOH, NextGen Healthcare, Inc. NXGN and AMN Healthcare Services AMN.With a Zacks Rank of 2 at present, Molina Healthcare Inc. is a multi-state managed care organization participating exclusively in government-sponsored healthcare programs. Its earnings beat the consensus mark in two of the trailing four quarters (missing the mark in the remaining two), the average surprise being 4%.NextGen Healthcare is a developer and marketer of healthcare information systems. With a Zacks Rank of 2 at present, NXGN has a trailing four-quarter earnings surprise of 16%, on average.AMN Healthcare Services is a travel healthcare staffing company with a Zacks Rank #1 at present. It has a trailing four-quarter earnings surprise of 19.5%, on average.Shares of NextGen Healthcare have lost 3.3% in a year’s time, while the stocks of Molina and AMN Healthcare Services have rallied 48.8% and 77.8% each.  Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Molina Healthcare, Inc (MOH): Free Stock Analysis Report Tenet Healthcare Corporation (THC): Free Stock Analysis Report AMN Healthcare Services Inc (AMN): Free Stock Analysis Report NEXTGEN HEALTHCARE, INC (NXGN): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 23rd, 2021

Why Is Dollar Tree (DLTR) Down 6.9% Since Last Earnings Report?

Dollar Tree (DLTR) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues. It has been about a month since the last earnings report for Dollar Tree (DLTR). Shares have lost about 6.9% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Dollar Tree due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Dollar Tree Q3 Earnings Beat, Sales Lag EstimatesDollar Tree posted mixed third-quarter fiscal 2021 results, wherein earnings beat the Zacks Consensus Estimate, while sales lagged the same. Meanwhile, sales improved year over year, but earnings declined. Higher-than-expected freight costs in the reported quarter primarily hurt bottom-line growth and the gross margin. Compelling results from the H2, Dollar Tree Plus and the new Combo Stores, which are part of the company’s key initiatives, drove the third-quarter fiscal 2021 performance.The company expects elevated freight costs to create headwinds in the near term. Consequently, it narrowed its sales and earnings per share guidance ranges for fiscal 2022. This resulted in negative investor sentiments upon the company’s earnings release, leading to shares of Dollar Tree declining 1.9% in the pre-market session on Nov 23.Quarter in DetailDollar Tree’s earnings declined 30.9% year over year to 96 cents per share but surpassed the Zacks Consensus Estimate of 95 cents. The year-over-year decrease can be attributed to the higher-than-anticipated freight costs witnessed in the quarter, which led to a gross margin decline. However, earnings per share were better than expected, owing to strong performance across its business. The company delivered earnings per share toward the high-end of the previously anticipated range of 88-98 cents per share.Consolidated net sales rose 3.9% year over year to $6,417.7 million but lagged the Zacks Consensus Estimate of $6,423 million. Enterprise same-store sales (comps) improved 1.6% year over year and 6.7% on a two-year basis. For the Dollar Tree banner, comps were up 0.6% on a constant-currency basis and 0.8% after adjusting for the impacts of Canadian currency fluctuations. Soft comps stemmed from weak performances at Dollar Tree and Family Dollar segments. Comps for the Family Dollar banner rose 2.7% compared with robust 6.4% comps growth in the prior-year quarter.Gross profit declined 8.3% year over year to $1,763.7 million, while the gross margin contracted 370 bps to 27.5%. The gross margin decline can be attributed to elevated freight costs, partly negated by continued improvement in shrink. The gross margin contracted 470 bps to 30.2% at the Dollar Tree banner and 240 bps to 24.4% at the Family Dollar segment.Selling, general and administrative (SG&A) expenses, as a percentage of sales, declined 100 bps to 22.7%, driven by reduced COVID-related costs compared with the last year. In the year-ago quarter, the company incurred COVID-related costs of $35.3 million (or 57 bps).While operating income declined 33.3% to $310.5 million, the operating margin contracted 270 bps to 4.8%, driven by a soft gross margin, partly offset by a lower SG&A expense rate. Segment-wise, the operating margin contracted 420 bps to 8.5% for Dollar Tree and 160 bps to 3% at the Family Dollar segment.Balance SheetDollar Tree ended the quarter with cash and cash equivalents of $701.4 million. Net merchandise inventories increased 13.8% to $4,316 million. It had net long-term debt (excluding current maturities) of $3,231.1 million and shareholders’ equity of $7,244.4 million as of Oct 30, 2021. Outstanding debt as of the quarter-end was $3.25 billion.In third-quarter fiscal 2021, the company did not repurchase any shares as it was focused on launching its broader nationwide $1.25 price point initiative. In the first nine months of fiscal 2021, the company bought back 9,156,898 shares for $950 million. As of Oct 30, 2021, the company had $2.5 billion remaining under its existing authorization.For fiscal 2021, it expects to incur a capital expenditure of $1.1 billion. It anticipates utilizing the majority of the excess cash flow generated to repurchase shares under the aforementioned program.Store UpdateIn third-quarter fiscal 2021, Dollar Tree opened 125 stores, expanded or relocated 34 outlets, and shuttered 23 stores. It completed the renovation of 450 Family Dollar stores to the H2 or Combo Store formats. As of Oct 30, 2021, the company operated 15,966 stores in 48 states and five Canada provinces.Key Real Estate Initiatives UpdateDollar Tree is delivering compelling results for its key initiatives, including the expanding footprint of the H2, Dollar Tree Plus and Combo Stores. The Family Dollar H2 stores have been performing well, with about 450 Family Dollar stores renovated to the H2 format in the fiscal third quarter. It currently has 3,300 Family Dollar H2 stores. In fiscal 2022, the company expects to complete 800 Family Dollar H2 Renovations as part of the Key Real Estate Initiative.Its multi-price point Dollar Tree Plus concept store is gaining popularity among customers, particularly discretionary categories. This has helped improve store productivity. Consequently, the company plans to accelerate the Dollar Tree Plus initiative by adding an additional 1,500 stores in fiscal 2022. It expects to have at least 5,000 Dollar Tree Plus stores by the end of 2024. It is on track to have 500 Dollar Tree Plus stores by the end of fiscal 2021.The company’s newest format store — Combo Store — which leverages the strengths of both banners under one roof has exceeded expectations. Dollar Tree currently has 105 Combo Stores in operation. The company believes that it has an opportunity for up to 3,000 Combo Stores in rural areas. Driven by the positive response, it expects the Combo Store to be the key strategic format, anticipating 85% of the newly opened Family Dollar stores to be Combo Stores in fiscal 2022. Thus, it expects 400 new or renovated Combo Stores for fiscal 2022.Additionally, the company plans to move away from its $1 pricing constraints and provide more value to customers through its $1.25 price point initiative. It plans to aggressively roll out the $1.25 price point to all Dollar Tree stores, with the new pricing introduced in more than 2,000 stores in December and all legacy Dollar Tree stores by the end of first-quarter fiscal 2022. The latest pricing initiative is expected to enhance the company’s ability to expand its offerings, introduce products and sizes, and provide families with more of their daily essentials. It will enable the company to reintroduce some of the customer favorites and traffic-driving products that were discontinued earlier due to the $1 pricing constraint.OutlookFor fourth-quarter fiscal 2021, Dollar Tree expects consolidated net sales of $7.02-$7.18 billion, with comps growth in low-single digits. It anticipates earnings of $1.69-$1.79 per share.For fiscal 2021, the company expects net sales of $26.25-$26.41 billion compared with $26.19-$26.44 billion mentioned previously. It continues to expect comps growth in low-single-digits. Management now envisions earnings of $5.48-$5.58 per share, down from $5.40-$5.60 per share mentioned earlier. The narrowed earnings forecast was primarily due to the elevated costs that the company witnessed in the fiscal third quarter. It expects to offset the higher freight costs through gains from the transition of the Dollar Tree stores to the $1.25 price point. However, gains will be partially negated by the one-time costs incurred for the transition of the stores.Although transpacific ocean container rates have been in focus lately, Dollar Tree notes that it is being impacted by all aspects of freight, including higher costs for inland transportation by truck and rail. In the fiscal third quarter, the company moved more containers than anticipated, incurring higher-than-expected freight costs. The company expects the freight and supply-chain disruptions to remain the greatest challenge in the near term.The company’s Dollar Tree banner is extremely sensitive to higher freight costs due to its one-dollar price point. It is taking several steps to mitigate the impacts of higher freight costs and improve the gross merchandise margin to overcome the situation.How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended upward during the past month.VGM ScoresAt this time, Dollar Tree has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Dollar Tree has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dollar Tree, Inc. (DLTR): Free Stock Analysis Report To read this article on Zacks.com click here......»»

Category: topSource: zacksDec 23rd, 2021

4 Funds to Celebrate Upbeat Consumer Confidence in December

Consumer confidence jumps in December as Americans feel confident about the US economy despite serious headwinds. Americans are quite confident about the U.S. economy despite headwinds from the fast-spreading Omicron variant of COVID-19 and inflation. Consumers are willing to spend confidently because of a strong labor market, with employers raising wages to fill up the vacancies. In fact, The Conference Board’s Senior Director of Economic Indicators, Lynn Franco, believes that the economy’s current momentum is likely to continue in early 2022 despite serious headwinds.Given such positives, investors can pick mutual funds like Fidelity Select Retailing Portfolio FSRPX, Fidelity Select Leisure Portfolio FDLSX, Fidelity Real Estate Investment Portfolio FRESX and Fidelity Select Automotive Portfolio FSAVX.On Dec 22, the Conference Board reported that its consumer confidence index moved up to 115.8, much above the consensus estimate of 111. In fact, November’s figure was also upwardly revised to 111.9 from 109.5. Diving into the sub-indexes, in accordance with the present situation, 19.9% of consumers said business conditions were “good,” and 55.1% of consumers said that jobs were “plentiful.” However, the gauge that measures short-term expectation jumped to 96.9 from 90.2 in November.Franco states that looking at the short-term expectation that measures outlook for income, business, and labor market conditions in the next six months, there has been a significant increase in the “proportion of consumers planning to purchase homes, automobiles, major appliances, and vacations over the next six months.” Additionally, 25.1% of the surveyed consumers expect more jobs to be available in the months ahead.The report shows that Americans are ready to spend generously this holiday season, especially on big-ticket items like electronics, automobiles, housing, and even vacations. Americans are showing resilience to higher inflation and the continued spread of Delta and Omicron variants of COVID-19.4 Funds to Pick NowGiven the current scenario, we have shortlisted four mutual funds from retail, automobile, leisure and real estate sectors poised to grow. The funds carry a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy) and are poised to grow. In addition, the minimum initial investment for these funds is within $5,000.We expect these funds to outperform peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify the potential winners and losers. Unlike most fund-rating systems, the Zacks Mutual Fund Rank is not just focused on the fund’s past performance but also its likely future success.The question here is why should investors consider mutual funds? Reduced transaction costs and portfolio diversification without several commission charges associated with stock purchases are primarily the reasons for parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages and How They Make Investors Money).Fidelity Select Leisure Portfolio fund aims for capital appreciation. The fund invests at least 80% of its assets in companies that design, produce or distribute goods or services in the leisure industries. FDLSX is a non-diversified fund invests in both domestic and foreign stocks.This Zacks Sector-Other product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.Fidelity Select Leisure Portfolio has a Zacks Mutual Fund Rank #1 and has three and five-year returns of 15.8% and 15.1%, respectively.Fidelity Select Retailing Portfolio fund aims for capital appreciation. This non-diversified fund invests the majority of its assets in securities of companies that merchandise finished goods and services to individual customers. FSRPX invests in both U.S. and non-U.S. stocks.This Zacks Sector-Other product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.Fidelity Select Retailing Portfolio has a Zacks Mutual Fund Rank #1 and has returned nearly 26% and 23.3% in the past three and five years, respectively.TheFidelity Real Estate Investment Portfolio fund aims for above-average income and long-term capital growth, consistent with reasonable investment risk. This non-diversified fund invests primarily in common stocks. The majority of FRESX’s assets are invested in securities of companies principally engaged in the real estate industry and other real estate-related investments.This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.Fidelity Real Estate Investment Portfolio has a Zacks Mutual Fund Rank #1 and has returned 10.9% and 9.3% over the past three and five years, respectively.Fidelity Select Automotive Portfolio fund aims for capital appreciation. This fund invests most assets in common stocks of companies engaged in manufacturing automobiles, trucks, specialty vehicles, parts, tires, and related services.This Sector - Other product has a history of positive total returns for over 10 years. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.Fidelity Select Automotive Portfolio has a Zacks Mutual Fund Rank #2 and has returned 35.1% and 24.4% over the past three and five years, respectively.Want key mutual fund info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week.Get it free >> Zacks’ Top Picks to Cash in on Artificial Intelligence This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (FSRPX): Fund Analysis Report Get Your Free (FDLSX): Fund Analysis Report Get Your Free (FRESX): Fund Analysis Report Get Your Free (FSAVX): Fund Analysis Report To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report.....»»

Category: topSource: zacksDec 23rd, 2021

MMT"s Fatal Flaw: Political Willpower

MMT's Fatal Flaw: Political Willpower Authored by Michael Lebowitz via RealInvestmentAdvice.com, MMT, or Modern Monetary Theory, offers a new monetary “logic” that allows the government to spend without concern for debts and deficits. Does MMT seem too good to be true or does MMT’s fatal flaws render it troublesome? On the heels of unprecedented spending and unmanageable deficits, MMT is gaining popularity. Its acceptance is not surprising as its principles justify reckless fiscal behavior. MMT advocates are loud in their support for unlimited spending and mock the thought of “too much debt.” We often fail to hear them highlight the critical governor in their theory designed to limit inflation. The current bout of inflation exposes MMT’s fatal flaw.  What is MMT “Free healthcare and higher education, jobs for everyone, living wages and all sorts of other promises are just a few of the benefits that MMT can provide.” –MMT and its Fictional Discipline Before discussing two inherent flaws with MMT, it’s worth briefly summarizing what the theory entails. At its core, MMT states government can create money via fiscal policy. Currently, all “new” money is lent into existence by the banks. Under MMT, Congress and the President would get a new printing press and print to their heart’s content. Debt would no longer be needed to fund government shortfalls. The current deficits become irrelevant because the government can print money to satisfy its debt requirements. Accordingly, without debt and deficits, MMT is a dream for politicians. The only flaw with the theory is inflation. If the economy reaches full employment and inflation becomes a risk, the discipline of MMT says taxes should be imposed on individuals and corporations to limit spending and reduce inflationary pressures. Measuring and managing inflation is where MMT will fail. MMT’s Fatal Flaw #1 – Measuring Inflation The first flaw is in the measurement of inflation. In the article mentioned above, we state: “Inflation is impossible to calculate. Inflation is impossible to calculate. No, that is not a typo. For emphasis, let us put it another way. Inflation is impossible to calculate. The point that inflation is impossible to calculate cannot be overstated.” Inflation is not measurable in any uniform matter. We can compute general gauges of inflation, but the degree of accuracy is highly questionable. Just consider the difference between inflation for a 45-year-old couple with three kids living in New York City and a retired couple living in New Mexico. MMT requires precision that is not possible. Making the task even trickier is the conflict of interest between the users and reporters of inflation data. Government agencies report on inflation. Congress and the President control these agencies. As such, those in power manipulate inflation data and have a strong interest in reporting low inflation numbers. MMT increases the need to underreport inflation. For more, read up on the Boskin Commission in MMT and its Fictional Discipline. MMT’s Fatal Flaw #2 – Political Willpower The second and more vexing problem with inflation is politicians’ willpower and vested interests. Should we expect elected officials to reduce spending and raise taxes when inflation is problematic? One needs only to consider the current environment when answering the question. Current Political Willpower Inflation is running at 6.8%, over three times higher than the Fed’s stated 2% objective. The media and populace are steadily increasing pressure on the administration and Congress to combat inflation. At the same time, wages are growing but at a lesser rate than inflation. Average hourly earnings are up 4.8%. While historically strong, real wages, factoring in inflation, are down 2%. With stimulus largely spent, consumers are reducing savings, increasing credit card debt, and withdrawing equity from their houses. These are signs that lower- and middle-income classes are falling behind. Under MMT, the government should be raising taxes to reduce consumption to fight inflation. Furthermore, they would need to raise taxes on all income classes to be effective. Raising taxes on just the wealthy would barely dent the spending habits of the rich and does not affect a large percentage of total consumption. Demand would not be meaningfully affected unless lower and middle incomes are taxed.   Do you think Joe Biden and the Democrat-controlled Congress would entertain raising taxes on the middle class and poor today? Absolutely not! They know they will lose control of Congress next year if they try. Our opinion is not biased. There are very few politicians on either side of the aisle willing to raise taxes and lose their power. As politicians constantly remind us, retaining control tends to trump doing the right thing in Washington. Such a mindset bodes poorly for managing inflation under MMT. Proof in the Fed If you seek more evidence of Washington’s lack of willpower to tackle inflation, look at the Fed. Despite red hot inflation and maximum employment, this “politically independent body” runs crisis-level monetary policy. They have dragged their feet for the last nine months as inflation soared well above their objective. The Fed is finally concluding inflation might be a problem as inflation hits 40-year highs. The Fed can curtail inflation by halting QE and quickly raising rates. Doing so would likely harm the financial markets and slow economic activity. While they appear to be willing to take steps to reduce their stimulus slowly, it will not be at the pace warranted by inflation. The Fed cares more about markets than their mandate. Like politicians, Fed members are fearful of losing their power. Summary Inflation is MMT’s fatal flaw. Inflation is the fly in MMT’s ointment. The current high inflation episode exposes MMT’s fatal flaw. Despite the flaw, we suspect the push for MMT will continue, and the rules around inflation will change, allowing for more inflation. Without stringent inflation guidelines and willpower, MMT is nothing more than a printing press for the government. Historically, MMT-like schemes have always resulted in default. We do not doubt that the adaption of MMT leads us on that same path.  Tyler Durden Thu, 12/23/2021 - 13:06.....»»

Category: blogSource: zerohedgeDec 23rd, 2021

Big Marijuana Stock Profits in Surprising Places

You can still get in on the ground floor of the marijuana market, which will only get hotter as more states and countries move toward legalization. Ben Rains shows several ways to invest before the floodgates open. Legal marijuana is a smoking hot growth industry in the U.S., Canada, and beyond. The global cannabis market is projected to soar from $20.5 billion back in 2020 to $90.4 billion by 2026.¹ And these estimates are likely conservative, as the U.S. moves closer to wide-ranging federal legalization and European nations, including economic powerhouse Germany, prepare to do the same in 2022.The best part about investing in legal marijuana right now is that despite all of the progress, there are ample opportunities to get in right near the ground floor given where we are in the legal lifecycle. Plus, many top pot stocks are trading near all-time lows heading into the new year, after they were beaten down in 2021, along with other former covid high-flyers and growth stocks.Still in the Early InningsThe legal recreational cannabis market has come a long way in the last few years. Yet the growth runway remains massive. Eighteen states have legalized adult-use marijuana as of December—up from zero in 2011. Meanwhile, Canada is one of only a couple countries to legalize marijuana nationally and it did so in 2018.Luckily, more U.S. states are poised to join the legal ranks in 2022, while others could add to the number of medical marijuana states to help take the country well above the current 36 states. Crucially, multiple bills are circulating around Washington, D.C. right now that aim to introduce sweeping Federal marijuana legalization, which will be an overnight game-changer and supercharge the space and the stocks.Even Republicans, the party historically opposed to legal weed, have started to roll out their own legalization proposals including one high-profile effort introduced in November. All of this is to say that Washington appears ready to enact some form of Federal legalization soon.The heightened political drive follows increased bipartisan support that matches the polling data—68% of U.S. adults are in favor of legal marijuana, including 50% of Republicans. Legalization at the national level will open the floodgates for U.S. growers to list on the NYSE and the Nasdaq, and for money to pour in from established players far outside the current pot space looking to cash in and make a big splash.Before those floodgates open, savvy investors are starting to focus on companies that are direct plays within the booming marijuana industry. These stocks are primed to continue growing and receiving institutional investment both before and after federal legalization.Continued . . .------------------------------------------------------------------------------------------------------Marijuana Stocks? There’s Never Been a Better TimeToday we’re on the verge of bipartisan marijuana legislation at the Federal level. Once the bill is passed, money is likely to flow into current and brand-new stocks at a rate that has never been seen in this industry.Thirty-six states plus D.C. have already legalized medicinal marijuana and 18 states plus D.C. made recreational use legal. There’s no stopping this trend, and now is the time to join the rush for profits. Global sales are predicted to skyrocket from $20.5 billion back in 2020 to $90.4 billion by 2026.Zacks recently closed marijuana trades of +39.7%, +94.5%, even +147.0% in as little as 4-1/2 months. Plus, new stocks are being lined up that could greatly surpass these gains.²See Zacks' latest pot stocks now >>------------------------------------------------------------------------------------------------------Don’t Touch the Plant Only Canadian marijuana growers can list on U.S. exchanges given the current standing of cannabis at the Federal level. Fortunately, outside of growers and pure-play pot companies, an array of stocks and industries provide access to legal marijuana because they maintain just enough distance from cannabis.Don’t touch the plant stocks also theoretically provide greater stability amid the current legal grey area in the U.S. The growing niche within pot investing includes real estate investment trusts, suppliers and equipment makers, tech firms, product safety and testing operations, pharmaceutical giants, and beyond.Hydroponics & High-Tech Farming Marijuana, even with all of the complicated new ways to consume it, is a plant. Therefore, the companies that directly support the growing of cannabis are some of the most straightforward and essential of the don’t touch the plant stocks.Today’s cannabis companies run grow operations that more often resemble high-tech, spotless computer chip factories than anything close to a farm. Hydroponic gardening or farming, which simply means growing without the use of soil, by utilizing formulated, mineral nutrient solutions in water, is front and center of modern cannabis cultivation.Marijuana is planted in an inert growing media and constantly supplied with nutrient-rich solutions, oxygen, and water, while light, temperature, and carbon dioxide levels are carefully controlled through various gadgets and other devices. Hydroponics allows for year-round growing, larger yields, and nearly complete control of the process.The global hydroponics market, which spans from multi-billion dollar operations to home grows, reportedly hit around $10 billion in 2020, and it's expected to reach well over $20 billion before the end of the decade. Many public hydroponics and indoor farming companies have posted 60% or higher revenue growth over the last several years.Plus, large institutional investors are pouring money into hydroponics stocks, with most holding at least 50% institutional ownership, compared to pure-play pot stocks that are closer to 15% or less.Real Estate Expansion Huge, high-tech marijuana growers require tons of capital and cash to start and operate. Yet, marijuana’s classification under federal law makes running successful U.S. pot businesses complex and cumbersome, especially when it comes to money. Most local and national banks don’t want anything to do with the legal marijuana market because of all the various state laws and expensive compliance standards.A few companies have helped fill the void for firms that don’t have access to traditional banking services. This backdrop enables cannabis-focused real estate investment trusts or REITs to essentially lend millions of dollars to cannabis companies that don’t have easy access to other sources of capital and collect extremely high interest rates for doing so, on long-term agreements. And like all REITs, they are required to distribute 90% of their taxable income to shareholders.Cannabis Tech Technology dominates our lives and the market, so of course, it plays a vital role in legal pot. There are multiple companies that sell cannabis-specific software to help growers, dispensaries, and others operate more effectively and efficiently in the highly-regulated space.Various publicly traded companies offer solutions for compliance, data, taxation, payments, plant tracking, and much more. The opportunity for expansion is huge in the marijuana tech world and a few companies are in the midst of rapid consolidation to try to capture more market share ahead of U.S. federal legalization that will likely require increasingly stringent guidelines.Extracting Profits from Plants The transition from the black market to labs and hydroponics ushered in the age of endless, hyper-specific marijuana strains. Outside of traditional flower that’s smoked, tons of growth is coming from edible products, oils, and other highly concentrated forms of cannabis.In order to transform cannabis plants and marijuana buds into new-age consumption methods, from concentrates to topical creams, detailed and varied extraction processes must be completed. There are various extraction methods that must be performed repeatedly and precisely, often on a massive scale.Extraction is growing more crucial given the global scope and the increasing demand for non-flower products, which includes widely popular non-psychoactive CBD products.Marijuana Testing  Medical-grade and adult-use cannabis products sold in legal markets are required by law to be clearly labeled with ingredients, cannabinoid levels, dosage recommendations, and tons of other information. Like all industries, from food to medicine, tons of testing is involved at various stages of the cultivation process.Cannabis testing is a potentially huge segment and it will garner even more attention at the national level, especially amid a rise in laced black market drugs. The broader field includes regulatory compliance, quality control, research, and beyond. There are currently multiple cannabis testing companies out there, and a few publicly traded names stand out through their exposure to other areas outside of marijuana.Pharmaceuticals and Biotech Far outside of medical marijuana exists the nascent world of cannabis-based medicine. There are a few stocks making waves in this growing field. One such public company sells the first prescription, plant-derived cannabis-based medicine approved by the FDA and the European Commission.The drug is used in the treatment of seizures associated with various syndromes in patients one year or older. Another more home-run style stock has attracted investment for its potential first-in-class therapeutics targeting the endocannabinoid system that aims to address needs in multiple diseases and conditions, including anorexia, cancer, pain, and inflammation.Multiple Opportunities for Investors As mentioned, this space looks to explode from $20.5 billion in 2020 to $90.4 billion by 2026. Yet only a few growers, pharmaceuticals, financial firms, suppliers - both established and start-ups - are the true innovators and offer historic profit potential.So if you don't want to devote constant attention and painstaking analysis to find these often little-known tickers, we can find them for you.Today, as the legalized marijuana floodgates are about to open, you’re invited to take part in our portfolio service Zacks Marijuana Innovators.This approach is responsible and vigilant, but we look for aggressive growth. Recently, we closed gains of +39.7%, +94.5%, even +147.0% in as little as 4-1/2 months.²Right now you can follow the live buys and sells inside Marijuana Innovators, and be among the first to get in on new buys that I’m lining up.Bonus Report: Speaking of industries with explosive growth potential, when you check our marijuana recommendations you are also invited to download our Special Report, One Semiconductor Stock Stands to Gain the Most. From 35 semiconductor stocks, you can get an early look at Zacks’ top pick during today’s chip shortage crisis.We can’t let everyone in on our marijuana portfolio, so your chance to gain access must end at midnight this Sunday, December 26. Sorry, no extensions.See Zacks' Marijuana Innovators Trades and Bonus Semiconductor Report Now >>Good Investing,Ben RainsEditorBen Rains develops strategies that enable investors to profit from the growing legal market in the U.S. and beyond. Ben uses his extensive experience and concentrated industry study to direct our unique portfolio service, Zacks Marijuana Innovators.¹ Source for marijuana industry growth estimate: Research and Markets ² The results listed above are not (or may not be) representative of the performance of all selections made by Zacks Investment Research's newsletter editors and may represent the partial close of a position.  Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 23rd, 2021

5 Dow Stocks That Helped the Index Score Big in 2021

We have narrowed our search to five Dow stocks that have pulled in the most in 2021. These are: MSFT, HD, GS, UNH and CVX. Wall Street is set to close back-to-back highly successful years despite being pandemic-ridden. However, if we compare the relative performance of major indexes in 2020 and 2021, we will find that it is the Dow, which has the best relative performance this year. The great reopening of the U.S. economy supported by nationwide vaccination helped the Dow to perform better.Several stocks of the 30-stock blue-chip index have rallied this year. Among them, the best five are — Microsoft Corp. MSFT, The Home Depot Inc. HD, The Goldman Sachs Group Inc. GS, UnitedHealth Group Inc. UNH and Chevron Corp. CVX.A Solid 2021 for the DowYear to date, the three large-cap-centric stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have rallied 16.8%, 25% and 20.4% respectively. The small-cap-specific Russell 2000 has gained 12.5% in the same period. In 2020, the Dow, the S&P 500 and the Nasdaq Composite — had rallied 7.3%, 16.3% and 43.6%, respectively. The Russell 2000 had jumped 30.6% last year.With just five trading days left for this year, let’s do a comparative analysis (comparing the rate of growth of last year to that of this year) of these four major stock indexes. Year over year, the Dow and the S&P 500 have rallied 130.1% and 53.4%, respectively. On the other hand, the Nasdaq Composite and the Russell 2000 have sild 53.2% and 59.2%, respectively. Clearly, the Dow is the undisputed leader of 2021.The availability of COVID-19 vaccines and an aggressive drive by the U.S. government for the nationwide deployment of vaccines have resulted in a faster-than-expected reopening of the U.S. economy. Unlike the market's benchmark S&P 500 or the teach-heavy Nasdaq Composite, the composition of the Dow is mostly inclined toward cyclical stocks that suffered the most during last year’s lockdown. Consequently, the great reopening benefitted the Dow the most.Dow’s Momentum Likely to ContinueMassive pent-up demand supported by unprecedented personal savings will pave the way for U.S. economic growth in 2022. Moreover, U.S. businesses are opting for higher spending despite facing chronic labor shortage.At its current level of 35,753.89, the Dow is well above its 50-day and 200-day moving averages of 35,595.65 and 34,657.54, respectively. The 50-day moving average line is generally recognized as the short-term trendsetter in financial literature, while the 200-day moving average is considered a long-term trend setter.It is widely recognized in the technical analysis space that whenever the 50-day moving average line surges ahead of the 200-day moving average line, a long-term uptrend for the index becomes a strong possibility.At present, the blue-chip index is 2.3% below its all-time high of 36,565.73 attained on Nov 8. Despite facing severe volatility in December, the index is up an impressive 3.7% month to date.Near-Term DriversThe Conference Board reported that despite facing soaring inflation and the resurgence of the Omicron variant of coronavirus, U.S. Consumer Confidence in December came in at 115.8 surpassing the consensus estimate of 111. November’s reading was revised upward to 111.9 from the earlier reported 109.5. Notably, the sub-index for expectations (based on consumers’ short-term outlook for income, business, and labor market conditions) surged to 96.9 in December from 90.2 in November.On Dec 21, President Joe Biden said “absolutely no” to whether March 2020-style lockdowns will return to the United States as a result of the rapid spread of Omicron. His administration plans to get more booster shots, distribute 500 million free at-home COVID-19 testing kits and the immediate deployment of military doctors, nurses and other medical professionals to the six most-affected states.The U.S. economy will get more upside from the government’s infrastructure spending. On Nov 15, President Joe Biden signed a bipartisan infrastructure bill of $550 billion in addition to the previously approved funds of $450 billion for five years. Total spending may go up to $1.2 trillion if the plan is extended to eight years.The infrastructure development project will be a major catalyst for the U.S. stock markets in 2022. Various segments of the economy such as basic materials, industrials, utilities and telecommunications will benefit immensely with more job creation for the economy.Stocks in FocusWe have narrowed our search to five Dow stocks that have pulled in the most in 2021. These stocks have strong growth potential for both short-term and long-term (3-5 years) and seen positive earnings estimate revisions within the last 60 days. Each of these stocks carries either Zacks Rank #2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The chart below shows the price performance of five stocks year to date.Image Source: Zacks Investment ResearchMicrosoft has a dominant position in the desktop PC market, with its operating systems being used in the majority of PCs worldwide. MSFT is benefitting from strength in its Azure cloud platform amid accelerated global digital transformation. Teams’ user growth is gaining from continuation of remote work and mainstream adoption of hybrid/flexible work model of Microsoft.Recovery in advertising and job market boosted LinkedIn and Search revenues of MSFT. Solid uptake of new Xbox consoles is aiding the gaming segment performance. Microsoft is witnessing growth in the user base of its different applications including Microsoft 365 suite, Dynamics and Power Platform.Zacks Rank #3 Microsoft has an expected earnings growth rate of 14.6% for next year (ending June 2022) and a long-term growth rate 12%. The Zacks Consensus Estimate for next-year earnings improved 0.1% over the last 7 days. The stock price of MSFT has soared 50% year to date.The Home Depot is witnessing significant benefits from the execution of the “One Home Depot” investment plan, which focuses on expanding supply chain facilities, technology investments and enhancement to the digital experience.Amid the pandemic, customers have been increasingly blending the physical and digital elements of the shopping experience, making the interconnected One Home Depot strategy most relevant. The Home Depot is effectively adapting to the demand for renovations and construction activities, driven by prudent investments. HD is gaining from growth in Pro and DIY customer categories as well as digital momentum.Zacks Rank #2 Home Depot has an expected earnings growth rate of 4.8% for next year (ending January 2023) and a long-term growth rate 12.8%. The Zacks Consensus Estimate for next-year earnings has improved 1.1% over the last 30 days. The stock price of HD has jumped 49.5% year to date.The Goldman Sachs Group is benefiting from its business diversification. Within traditional banking, a diversified product portfolio has better chances of sustaining growth than many other banks, which have exited some of these areas. The Goldman Sachs operates in four segments: Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management.Amid the continued deal-making frenzy, GS’ solid position in announced and completed mergers & acquisitions globally is likely to keep driving its investment banking revenues in the upcoming quarters. Goldman Sachs’ efforts to diversify fee-based revenue sources and expand globally from strategic acquisitions will support the top line. GS’ steady capital deployment activities act as a tailwind.Zacks Rank #2 The Goldman Sachs has a negative expected earnings growth rate for next year. However, it has a long-term growth rate 11.2%. The Zacks Consensus Estimate for next-year earnings has improved 2.4% over the last 30 days. The stock price of GS has climbed 45% year to date.UnitedHealth Group has a strong market position and an attractive core business that continues to be driven by new deals, renewed agreements and expansion of service offerings. UNH’s solid health services segment provides significant diversification benefits.UnitedHealth Group’s health service business, branded as Optum, is becoming increasingly valuable. The primary growth drivers for Optum are pharmacy care services, care delivery, technology, government services, and international. A sturdy balance sheet and consistent cash flow generation enables investments in business and secures dividend to UNH’s shareholders.Zacks Rank #3 UnitedHealth Group has an expected earnings growth rate of 15.2% for next year and a long-term growth rate 14.7%. The Zacks Consensus Estimate for next-year earnings has improved 0.1% over the last 30 days. The stock price of UNH has advanced 40.9% year to date.Chevron is one of the best-placed global integrated oil firms to achieve a sustainable production ramp-up. CVX’s existing project pipeline is one of the best in the industry, thanks to its premier position in the lucrative Permian Basin.Chevron’s Noble Energy takeover has expanded its footprint in the region and the DJ Basin. CVX now has access to Noble Energy’s low-cost, proven reserves along with cash-generating offshore assets in Israel — particularly the flagship Leviathan natural gas project — thereby boosting its footing in the Mediterranean.Zacks Rank #3 Chevron has an expected earnings growth rate of 15.6% for next year and a long-term growth rate 5.6%. The Zacks Consensus Estimate for next-year earnings improved 0.6% over the last 30 days. The stock price of CVX has surged 37.6% year to date. Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Chevron Corporation (CVX): Free Stock Analysis Report UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 23rd, 2021

5 Russell 2000 Stocks That Crushed the Index in 2021

Builders FirstSource (BLDR), Sanderson Farms (SAFM), Lattice Semiconductor (LSCC), Trex (TREX) and Enova (ENVA) are the top Russell 2000 stocks that outperformed the index in 2021. Following the economic lows in 2020, investors have witnessed a gradual improvement in the financial markets in 2021 with accelerated COVID-19 vaccination drives, increased merger & acquisition activities across various industry verticals and favorable earnings growth.The pandemic has further witnessed a resurgence of small-cap stocks as startups and small corporations have proved their mettle by driving innovation and generating more revenues with new opportunities as the economy recovers.Small-Cap Stocks Lead the WayLarge-cap stocks tend to be less volatile, even during rough market conditions. However, given the current uncertainties stemming from the pandemic, small-cap stocks appear to be the preferred choice as they offer huge growth potential and higher returns in the long run.Moreover, small companies are known to have spurred employment rates in the private sector amid the pandemic-induced market turbulence. With large entities having major international exposure, small and mid-cap companies seem to be relatively better placed than their larger peers to tap local talents and capitalize on regional supply chain mechanism.About Russell 2000 IndexThe Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. It accounts for 10% of the market capitalization of the Russell 3000. A broader section of the core U.S. companies forms an integral part of this index. It is one of the most widely used benchmarks for small-cap equities, making it a barometer for the economy.Driven by its resilience, the Russell 2000 Index of small-cap stocks surged 140% as of Nov 4, 2021, since it hit rock-bottom levels in March 2020. In 2020, the Russell 2000 Index of small-cap stocks gained 70.9% compared with 44.5% for the large-cap S&P 500 Index.The Russell 2000 Index reflects the bullish sentiments of the market and has moved up 14.2% on a year-to-date basis. It closed at 2,221.90 on Dec 22. Consequently, it would be prudent to park your hard-earned money on these small-cap stocks for lucrative returns.Top 5 PerformersWe have zeroed in on five such stocks that performed better than the index and are among the top gainers in 2021. These stocks are well poised to gain further in the near term on the back of their higher return potential.Builders FirstSource, Inc. BLDR: Headquartered in Dallas, TX, Builders FirstSource is the largest supplier of building materials, manufactured components and construction services. The company operates in more than 550 locations in 39 states all over the United States. Following the merger with BMC Stock Holdings, Inc. on Jan 1, 2021, Builders FirstSource reorganized its organizational structure.Acquisitions form an important part of Builders FirstSource growth strategy to supplement its organic growth. Before the BMC merger, the company integrated 43 acquisitions since 1998. With accretive investments in digital solutions, BLDR is observing higher demand driven by solid momentum of the housing industry. Also, it is expected to provide greater resources to invest in growth, innovation and non-stop value creation for all its shareholders.Builders FirstSource sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of A. BLDR delivered a trailing four-quarter positive earnings surprise of 71.5%, on average. The Zacks Consensus Estimate for its next-year earnings has been revised 50.2% upward over the past 60 days. Year to date, the stock has catapulted 98.7% compared with 43.4% growth of the industry.Image Source: Zacks Investment ResearchYou can see the complete list of today’s Zacks #1 Rank stocks here.Sanderson Farms, Inc. SAFM: Headquartered in Laurel, MS, Sanderson Farms is a poultry processing company that produces, processes, markets and distributes fresh and frozen chicken products. The company operates 11 hatcheries, nine feed mills and 12 processing plants, and one prepared chicken plant.With sales of more than $3.5 billion, it is currently the third-largest poultry producer in the United States, processing more than 4.8 billion pounds of meat in fiscal 2020. Sanderson Farms has been strengthening its product portfolio by adding to its vast product pipeline. It is working toward boosting its assortments to meet consumers’ altering tastes and dining preferences. Additionally, it is investing toward augmenting its overall capacity.Sanderson Farms also flaunts a Zacks Rank #1 and has a VGM Score of A. SAFM delivered a trailing four-quarter positive earnings surprise of 496.3%, on average. The Zacks Consensus Estimate for its next-year earnings has been revised 6.8% upward over the past 60 days. Year to date, the stock has rallied 41.8% compared with 10.1% growth of the industry.Image Source: Zacks Investment ResearchLattice Semiconductor Corporation LSCC: Headquartered in Hillsboro, OR, Lattice is a manufacturer of high-performance programmable logic devices. The company sells its products globally in three end market groups — Communications and Computing, Industrial and Automotive, and Consumer.Lattice shares long-standing strategic relationships with major semiconductor foundries for procuring finished silicon wafers. This enables LSCC to focus its internal resources on product and market development, in turn, eliminating the fixed cost of operating semiconductor manufacturing facilities. The company solves customer problems across the network, from the Edge to the Cloud, across computing, communications, automotive, industrial and consumer markets.Lattice carries a Zacks Rank #2 (Buy). LSCC delivered a trailing four-quarter positive earnings surprise of 14.5%, on average. The Zacks Consensus Estimate for its next-year earnings has been revised 7.1% upward over the past 60 days. Year to date, the stock has returned 63.1% compared with 41.4% growth of the industry.Image Source: Zacks Investment ResearchTrex Company, Inc. TREX: Based in Winchester, VA, Trex is a leading manufacturer of wood-alternative composite decking, railing and other outdoor items. Stocked in more than 6,700 retail locations worldwide, Trex outdoor living products deliver a plethora of style options with fewer maintenance requirements than wood. It currently operates in two reportable segments — Trex Residential Products (Trex Residential) and Trex Commercial Products (Trex Commercial).The expanded addressable market reflects the strength of its brand and product portfolio. Solid sales growth and disciplined SG&A spending act as major tailwinds. With strong demand trends, Trex anticipates double-digit revenue gains in 2022 with higher opportunities related to energy efficiency, modernization and automation. It also prioritizes cost reduction projects and new product development while driving innovation in the global market.  Trex has a Zacks Rank #3 (Hold). The company delivered a trailing four-quarter positive earnings surprise of 5.5%, on average. The Zacks Consensus Estimate for its next-year earnings has been revised 6.6% upward over the past 60 days. Year to date, the stock has gained 57% compared with 31.5% growth of the industry.Image Source: Zacks Investment ResearchEnova International, Inc. ENVA: Based in Chicago, IL, Enova is a leading financial technology company focused on providing online financial services. As of Dec 31, 2020, the company has completed more than 53.2 million customer transactions and collected nearly 49 terabytes of consumer behavior data, enabling it to better analyze its specific customer base. Some of its financing products and services are installment loans, income share agreements, CSO programs and receivables purchase agreements.Enova currently provides its services in the United States, the United Kingdom, Canada, Australia and Brazil. It caters to small businesses and capitalizes on its proprietary technology, analytics and customer service capabilities to underwrite and fund loans. Enova’s proprietary underwriting systems leverage advanced risk analytics, including machine learning and artificial intelligence. ENVA has provided more than 7 million customers with more than $40 billion in loans to enhance their financial health.Enova has a Zacks Rank #3. The company delivered a trailing four-quarter positive earnings surprise of 68.6%, on average. The Zacks Consensus Estimate for its next-year earnings has been revised 6.2% upward over the past 60 days. Year to date, the stock has soared 61.5% compared with 34.9% growth of the industry.Image Source: Zacks Investment Research Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Builders FirstSource, Inc. (BLDR): Free Stock Analysis Report Lattice Semiconductor Corporation (LSCC): Free Stock Analysis Report Sanderson Farms, Inc. (SAFM): Free Stock Analysis Report Trex Company, Inc. (TREX): Free Stock Analysis Report Enova International, Inc. (ENVA): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 23rd, 2021

4 Marijuana Stocks to Watch as Legalization Efforts Intensify

Legalization at state level is ramping up and once federal legalization is achieved marijuana stocks like Tilray, Inc. (TLRY), Sundial Growers (SNDL), Block Inc. (SQ) and Innovative Industrial Properties, Inc. (IIPR) are poised to perform well. Marijuana stocks started the year on a high but have lately faced ups and downs. However, the euphoria hasn’t died out and even without federal legalization, pot stocks are doing well.Domestic pot stocks had particularly performed well in the first half of this year. However, Canadian companies that showed promise earlier on in 2021 are facing some roadblocks. Canadian pot producers are now betting on the U.S. market but making inroads would be a challenge as marijuana isn’t fully legalized in the country. Thus, domestic players like Tilray, Inc. TLRY,  Sundial Growers SNDL, Block Inc. SQ and Innovative Industrial Properties, Inc. IIPR are likely to dominate the space in the coming days.Wait for LegalizationThe pandemic saw cannabis stocks flourishing, with the sector hitting a record $17.5 billion in sales last year. The positive trend continued and investors expected the sector to benefit after the 2020 Presidential election and eventual Democratic victories in Congress. This saw marijuana stocks peaking in February.However, the pace of federal legalization has somewhat slowed down. Marijuana investors had hoped that Biden would keep his campaign promise and his administration would push for marijuana legalization through Congress in 2021. That hasn’t happened and legalization can now become reality only in 2022.Efforts to Legalize Marijuana ContinueA little patience can prove beneficial for those who are hopeful about the sector’s future. Earlier this year, the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act) and the Medical Marijuana Act was passed by the Democrat-led House, hinting at legalization of marijuana in the coming days.The two acts have paved the way for banks and other financial institutions to provide services to marijuana companies in legalized states without penalty. Now the wait is for the decriminalization of marijuana at the federal level, while state level legalization continues to ramp up. States like Ohio have been pushing for legalizing marijuana and although slow, the process is on.While a few Democrats are strongly pushing for federal-level legalization in the near term, President Biden needs to take a call. According to a report in Marijuana.Moments.net, Rep. Alexandra Ocasio-Cortez has urged Biden to bypass Congressional inaction and decriminalize marijuana by a de facto law through his executive orders.“Biden needs to lean on his executive authority now. He has been delaying and underutilizing it so far. There is an enormous amount he can do on climate, student debt, immigration, cannabis, health care, and more,” Ocasi-Cortez tweeted on Dec 21.At present, with prohibition on, it means higher taxes, higher cost of capital alongside compliance costs. Legalization of marijuana would boost free flow of cash, leading to a higher valuation.The hope of marijuana getting legalized has also seen top companies buying other entities. Legalization at the federal level is only likely to supercharge growth for the sector in 2022. Also, longer regulatory timelines will allow marijuana stocks with strong fundamentals to cement their position in the industry.In fact, there are multiple catalysts in place that are likely to help marijuana stocks in 2022. According to BDSA, cannabis sales in the United States is projected to surpass $24 billion in 2021. This reflects 38% year-over-year growth. Moreover, it expects U.S. sales to reach $47.6 billion in 2026 at a CAGR of 14%.Experts believe that the marijuana industry is likely to experience a domino effect soon with more states legalizing it. The states that have now made marijuana legal will create pressure on their neighbouring states to follow suit so that they can curb tax revenues. As more states legalize marijuana, the government will be under pressure to decriminalize pot at the federal level.4 Stocks to Watch in 2022Tilray, Inc. is a pharmaceutical company. TLRY develops cannabis-based medicines, drugs, drops and oil products. Tilray  provides medical and adult-use cannabis products; pharmaceutical and wellness products; beverage alcohol products; and hemp-based food and other wellness products. Currently, Tilray has a Zacks Rank #3 (Hold). TLRY’s expected earnings growth rate is 41.3% for the current year and 44.4% for next year. You can see the complete list of today’s Zacks #1 Rank stocks here.Sundial Growers operates as a pharmaceutical company. SNDL produces and grows cannabis strains. Sundial produces and distributes inhalable products, such as flower, pre-rolls, and vapes. The company offers its products under the Top Leaf, Sundial Cannabis, Palmetto, and Grasslands brands.Currently, SNDL has a  Zacks Rank #3. SNDL’s expected earnings growth rate is 69.3% for the current year and more than 100% for next year.Block Inc. provides payment and point-of-sale solutions in the United States and internationally. But Block introduced CBD early-access program that permits business houses in the United States to sell CBD products.Zacks Rank #3 SQ has an expected earnings growth rate of 94.1% for the current year and 8.6% for next year.Innovative Industrial Properties, Inc.  is a real estate investment trust. IIPR is focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for medical-use cannabis facilities. In this process, Innovative Industrial Properties is reaping rental income.Currently, IIPR has a Zacks Rank #3. Innovative Industrial Properties’ expected earnings growth rate for the current and next year is 35% and 36.1%, respectively. The Zacks Consensus Estimate for its current-year earnings has climbed 0.6% over the past 90 days. Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Block Inc. (SQ): Free Stock Analysis Report Innovative Industrial Properties, Inc. (IIPR): Free Stock Analysis Report Tilray, Inc. (TLRY): Free Stock Analysis Report Sundial Growers Inc. (SNDL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 23rd, 2021

5 Bank Stocks Poised to Continue Their Winning Streaks in 2022

Banks like Fifth Third Bancorp (FITB), Wells Fargo (WFC), Hancock Whitney (HWC), Southside Bancshares (SBSI) and Western Alliance (WAL) are expected to benefit from higher interest rates and robust economic growth in 2022. Despite the lingering concerns related to the impact of the coronavirus pandemic, the performance of banks in the United States has remained impressive so far this year. Year to date, the KBW Nasdaq Bank Index has gained 34.7%, while the S&P Banks Select Industry Index has rallied 28.7%. Over the same period, the S&P 500 Index has gained 24.8%.While near-zero interest rates (the Federal Reserve had reduced benchmark rates to near zero in March 2020) continued to weigh on net interest margins (one of the key metrics for gauging banks’ profitability) in 2021, banks’ top line got some support from the gradual rise in loan demand and a steeper yield curve. Bank stocks’ financials also received solid support from fee income sources as well as reserve releases. Further, at the recent two-day FOMC policy meeting, the Fed signaled that its decision to speed up the pace of winding down the bond-buying program positions it to raise interest rates (probably thrice) in 2022 if higher inflation continues to prevail.Driven by these favorable factors, investors are bullish on bank stocks. Thus, banks like Fifth Third Bancorp FITB, Wells Fargo & Company WFC, Hancock Whitney Corporation HWC, Southside Bancshares, Inc. SBSI and Western Alliance Bancorporation WAL, which have jumped more than 20% in the year-to-date period, are expected to continue to perform well next year too.Per the latest Summary of Economic Projections, the Fed estimates real GDP growth of 4% for 2022, better than 3.8% mentioned in September. Also, a PCE inflation rate of 2.6% is projected for the next year.Since banks thrive in a rising rate environment, an increase in interest rates will likely reduce the pressure on banks’ margin as well as support net interest income growth. Moreover, expectations of an improving economy, continued increase in the demand for loans as well as efforts to diversify operations are likely to keep supporting banks’ financial performance in 2022.Our Picks for 2022This seems to be the right time to buy bank stocks to generate solid returns.The companies that we have short-listed have a market capitalization of more than $1 billion and their share price has increased more than 20% so far this year. Southside Bancshares currently sports a Zacks Rank #1 (Strong Buy), whereas the remaining four banks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The chart below shows the year-to-date price performance of the five banks. Image Source: Zacks Investment Research Wells Fargo: The San Francisco-based firm is one of the largest financial services companies in the United States, with more than $1.9 trillion in assets and $1.4 trillion in deposits as of Sep 30, 2021. It has a market cap of $196.3 billion and operates through 4,878 retail bank branches, broad automated telling machines (ATMs) network, the Internet, and other distribution channels across North America and globally.Wells Fargo’s deposit base witnessed a compound annual growth rate (CAGR) of nearly 2% in the last five years (2016-2020), with the uptrend continuing in the first nine months of 2021. With the gradual revival of the economy, deposit balances are likely to continue improving, particularly in the consumer business and commercial banking segments, thereby, supporting WFC’s liquidity position.Moreover, Wells Fargo undertakes prudent expense management initiatives, which are expected to keep aiding the bottom line. The company is focused on reducing its expense base by streamlining organizational structure, closing branches and reducing headcount by optimizing operations and other back-office teams.WFC also has an impressive capital deployment plan. Subsequent to this year’s stress test clearance, it doubled its quarterly dividend to 20 cents per share. Also, the company boosted its share-repurchase authorization to approximately $18 billion for the period between third-quarter 2021 and second-quarter 2022. Through efficient capital deployments, WFC is expected to keep enhancing shareholder value.Analysts seem to be optimistic regarding the company’s earnings growth potential in 2022. The Zacks Consensus Estimate for WFC’s 2022 earnings has been revised upward by 1.1% over the past 60 days.Fifth Third Bancorp: With assets of $208 billion as of Sep 30, 2021, Cincinnati-based Fifth Third Bancorp has 1,100 full-service banking centers in 11 states throughout the Midwestern and Southeastern regions of the United States.Fifth Third Bancorp has a market cap of $29.1 billion and its 2022 earnings estimates have been revised marginally upward over the past 60 days.FITB’s diverse revenue base is expected to keep supporting its earnings growth. The company has expanded its non-interest income base over the years on strategic investments. Augmented capabilities through strategic partnerships and acquisitions in different industries, such as healthcare (including the acquisition of Coker Capital in 2020 and buyout of Provide in August 2021), will likely support commercial verticals and result in revenue growth, expense savings and operational excellence.FITB is focused on executing branch optimization measures to enhance its presence in high-growth markets. It is re-allocating its branch network to enhance its presence in the Southeast and reduce presence in the Midwest. Accordingly, it has targeted nearly 25 branch openings per year through financial-year 2025, while the company is on track to close 42 additional branches in first-quarter 2022.The company’s deposit balances represent an important source of funding and revenue growth opportunity. It continues to focus on core deposit growth in its retail and commercial franchises by improving customer satisfaction, building full relationships and offering competitive rates. Fifth Third Bancorp’s total deposits, and loans and leases witnessed a CAGR of 11.3% and 4.3%, respectively, over the last five years (ended 2020).Hancock Whitney: With a market cap of $4.2 billion, the Gulfport, MS-based company offers banking operations and services, including a variety of transaction and savings deposit products, commercial and small business banking, private banking, trust and investment services, healthcare banking, mortgage banking, and certain insurance services.HWC remains focused on its revenue growth strategy. Its strategic investments in growth and new markets are expected to bolster the top line and help achieve an efficiency ratio of 55% by the end of fourth-quarter 2022.Hancock Whitney’s revenues (on a tax-equivalent basis) witnessed a CAGR of 7.9% over the last six years (2015-2020), with the momentum continuing in the first nine months of 2021. Going forward, robust economic growth and a gradual rise in demand for loans will likely support the top line.The company’s capital deployment activities are also encouraging. Hancock Whitney had 4.1 million shares remaining under the buyback authorization as of Sep 30, 2021, which is set to expire on Dec 31, 2022. Given a decent liquidity position and earnings strength, the company is expected to sustain efficient capital deployments.The Zacks Consensus Estimate for HWC’s 2022 earnings has increased 2.3% over the past 60 days. Besides, Hancock Whitney’s acquisition of MidSouth Bancorp in 2019 continues to be accretive to its earnings.Southside Bancshares: Southside Bancshares is headquartered in Tyler, TX, with $7.14 billion in assets as of Sep 30, 2021. The company offers consumer and commercial loans, mortgages, deposit accounts, safe deposit boxes, treasury management, wealth management, trust services, brokerage services, and an array of online and mobile services through its 55 branches.In the third quarter of 2021, Southside Bancshares’ deposit and loan growth, net of Paycheck Protection Program loans, were 13.5% and 7.9%, on a sequential basis. Macro conditions in SBSI’s markets (Dallas/Fort Worth and Austin areas) remain strong, enabling the company to see a healthy loan pipeline. Going forward, economic growth is expected to aid loan growth.Since Southside Bancshares traditionally had a liability-sensitive balance sheet, management has taken appropriate steps to reduce the liability sensitivity in anticipation of a rate hike. In the third quarter, SBSI saw an increase in non-maturity deposits and low-cost-interest-bearing liabilities. Also, in the past year, SBSI has increased non-maturity deposits, facilitating a reduction in higher-cost funding avenues like time deposits and FHLB borrowings.Southside Bancshares’ 2022 earnings estimates have been revised upward by 5.9% over the past 60 days. The company has a market cap of $1.32 billion.Western Alliance: Based in Phoenix, AZ, Western Alliance provides a wide range of deposit, lending, treasury management, international banking, and online banking products and services. As of Sep 30, 2021, WAL had $48.3 billion in total assets, $34.6 billion in net loans held for investments and $45.3 million in total deposits.Western Alliance has been witnessing a steady improvement in revenues. Over the last five years (ended 2020), the company’s top line recorded a CAGR of 15.3%, with the uptrend continuing in the first three quarters of 2021. Rising loans and deposit balances, efforts to strengthen fee income sources, and an improving economy will likely aid revenues in the upcoming quarters.The company also has been growing through strategic acquisitions. In April 2021, Western Alliance closed the previously announced buyout of Aris Mortgage Holding Company, LLC for $1.22 billion. The acquisition complements the company’s national commercial businesses and expands its mortgage-related offerings. This also diversifies WAL’s revenue mix by expanding sources of non-interest income.WAL’s capital deployment activities also seem impressive. In the third quarter of 2021, the company hiked its quarterly dividend by 40% to 35 cents per share. This was the first dividend hike by the company since it started paying dividends from August 2019.Western Alliance has a market cap of $10.8 billion and its 2022 earnings estimates have been revised upward by 4.4% over the past 60 days. Zacks Top 10 Stocks for 2022 In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022? From inception in 2012 through November, the Zacks Top 10 Stocks gained an impressive +962.5% versus the S&P 500’s +329.4%. Now our Director of Research is combing through 4,000 companies covered by the Zacks Rank to handpick the best 10 tickers to buy and hold. Don’t miss your chance to get in on these stocks when they’re released on January 3.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Wells Fargo & Company (WFC): Free Stock Analysis Report Fifth Third Bancorp (FITB): Free Stock Analysis Report Western Alliance Bancorporation (WAL): Free Stock Analysis Report Southside Bancshares, Inc. (SBSI): Free Stock Analysis Report Hancock Whitney Corporation (HWC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 23rd, 2021