Last week, two of the three major U.S. indexes — the S&P 500 and the tech-heavy Nasdaq Composite — gained 1.8% and 3.1%, respectively, whereas the Dow Jones Industrial Average ended virtually unchanged. This clearly shows indecisiveness in the market despite solid corporate earnings.
From January through March 2024, the U.S. economy grew at the slowest pace in nearly two years at 1.6% against the Wall Street expectation of 2.4%. The numbers suggest a significant loss of momentum since the beginning of 2024 due to a sharp rise in inflation which led to a cool-off in consumer and government spending.
Also, the personal consumption expenditure price index rose 3.4% in the first quarter against 1.8% in the previous quarter. This raised concerns over rising inflation and the timing of the planned rate cuts by the Federal Reserve.
On the international front, rising geopolitical tension between Israel and its neighbors, are still a concern for global oil prices and supply chain, which could lead to an increase in inflation worries.
Regardless of market conditions, we here at Zacks provide investors with unbiased guidance on how to beat the market.
As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.
Here are some of our key achievements:
ADMA Biologics and BOC Hong Kong Surge Following Zacks Rank Upgrade
Shares of ADMA Biologics, Inc. ADMA have gained 18.7% (versus the S&P 500’s 1.7% increase) since it was upgraded to a Zacks Rank #1 (Strong Buy) on February 28.
Another stock, BOC Hong Kong (Holdings) Limited BHKLY, which was upgraded to a Zacks Rank #2 (Buy) on February 26, has returned 15.7% (versus the S&P 500’s 1.3% increase) since then.
Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
A hypothetical portfolio of Zacks Rank #1 stocks returned +20.63% in 2023 vs. +24.83% for the S&P 500 index and +15% for the equal-weight S&P 500 index. The portfolio of Zacks Rank #1 stocks is an equal-weight portfolio, while the S&P 500 index is a market-cap-weighted index that has been notably distorted by the concentrated performance of mega-cap stocks in 2023.
We are not trying to cherry-pick here. But since this Zacks Model portfolio, consisting of Zacks Rank #1 stocks, is an equal-weight portfolio, the equal-weight S&P 500 index is the appropriate benchmark for comparison. Looked at this way, this portfolio has handily outperformed the index.
The Zacks Model Portfolio — consisting of Zacks Rank #1 stocks — has outperformed the S&P index by more than 13 percentage points since 1988 (Through January 1, 2024, the Zacks # 1 Rank stocks generated an annualized return of +24.18% since 1988 vs. +10.88% for the S&P 500 index).You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Check ADMA Biologics’ historical EPS and Sales here>>>
Check BOC Hong Kong’s historical EPS and Sales here>>>
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Zacks Recommendation Upgrades Carlisle Companies and Allison Transmission Higher
Shares of Carlisle Companies CSL and Allison Transmission Holdings, Inc. ALSN have advanced 16% (versus the S&P 500’s 2.5% rise) and 6.6% (versus the S&P 500’s 3.0% rise), respectively, since their Zacks Recommendation was upgraded to Outperform on February 16 and February 15, respectively.
While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.
The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.
To access our research reports with Zacks Recommendations for the 1100+ stocks we cover, click here>>>
Zacks Focus List Stocks Sea Limited, Micron Technology Shoot Up
Shares of Sea Limited SE, which belongs to the Zacks Focus List, have gained 50% over the past 12 weeks. The stock was added to the Focus List on March 26, 2020. Another Focus-List holding, Micron Technology, Inc. MU, which was added to the portfolio on December 27, 2016, has returned 32.8% over the past 12 weeks. The S&P 500 has advanced 2.81% over this period.
The 50-stock Zacks Focus List model portfolio returned +21.72% in 2023 (through November 30) vs. +20.79% for the S&P 500 index and +6.32% for the equal-weight S&P 500 index. In 2022, the portfolio produced -15.2% vs. the S&P 500 index’s -17.96%.
Since 2004, the Focus List portfolio has produced an annualized return of +11.07% through November 30, 2023. This compares to a +9.49% annualized return for the S&P 500 index in the same time period.
On a rolling one-, three- and five-year annualized basis, the Zacks Focus List returned +13.49%, +9.21%, and +14.05% vs. +13.82%, +9.74% and +12.51% for the S&P 500 index, respectively.
Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>
Zacks ECAP Stocks McCormick & Company and Novo Nordisk Make Significant Gains
McCormick & Company, Incorporated MKC, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 11.9% over the past 12 weeks. Novo Nordisk A/S NVO has followed McCormick & Company, Incorporated with 11.6% returns.
The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks, returned +12.17% in 2023 vs. +26.28% for the S&P 500 index. The portfolio returned -4.7% in 2022 vs. the S&P 500 index’s -17.96%.
With little to no turnover and annual rebalance periodicity, the ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.
The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.
Zacks ECDP Stocks Tractor Supply and Colgate-Palmolive Outperform Peers
Tractor Supply Company TSCO, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 17.6% over the past 12 weeks. Another ECDP stock, Colgate-Palmolive Company CL, has climbed 7.6% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance.
Check Tractor Suppply Company’s dividend history here>>>
Check Colgate-Palmolive’ dividend history here>>>
With an extremely low Beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps significantly mitigate risk.
The Zacks Earnings Certain Dividend Portfolio (ECDP) returned -0.9% in 2023 vs. +26.28% for the S&P 500 index) and +8.11% for the Dividend Aristocrats ETF (NOBL). The portfolio returned -2.3% in 2022 vs. -17.96% for the S&P 500 index and -8.34% for NOBL.
Click here to access this portfolio on Zacks Advisor Tools.
Zacks Top 10 Stocks — Badger Meter Delivers Solid Returns
Badger Meter, Inc. BMI, from the Zacks Top 10 Stocks for 2024, has jumped 20.2% year to date, which compares to the S&P 500 index’s +6.9% increase.
The Top 10 portfolio returned +25.15% in 2023 vs. +26.28% for the S&P 500 index. Since 2012, the Top 10 portfolio has produced a cumulative return of +1060.9% through the end of 2023 vs. +360.1% for the S&P 500 index.
On a rolling one-, three- and five-year annualized basis, the Zacks Top 10 portfolio returned +25.15%, +14.13%, and +29.3% vs. +26.28%, +10.23% and +15.61% for the S&P 500 index, respectively.
Since 2012, the Zacks Top 10 portfolio has returned an annualized return of +22.67% through the end of 2023 vs. +13.56% for the S&P 500 index.
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