The three most widely followed indexes closed last week in the red. The Nasdaq Composite, the S&P 500, and the Dow Jones Industrial Average declined by 2.98%, 2.36% and 2%, respectively.
Market participants have adopted a cautious approach as the Federal Reserve forecast in its summary of economic projections (SEP) two quarter-basis point interest rate cuts in 2025, down from its September views of four. Fewer rate cuts will eventually result in elevated mortgage rates and other consumer borrowing costs. However, in its December meeting, the Fed announced its third and final interest cut of the year by 25 basis points, a move to support the weakening labor market and stimulate economic growth.
The Personal Consumption Expenditure (PCE) index, the Fed’s preferred inflation gauge rose for a second straight month in November by 2.4% on an annual basis staying within Wall Street’s expectations. Personal income and Personal expenditures increased by 0.3% and 0.4% respectively, within markets’ expectaions.
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:
Flexsteel Industries and Materialise NV Following Zacks Rank Upgrade
Shares of Flexsteel Industries, Inc. FLXS have gained 36.9% (versus the S&P 500’s 1.2% increase) since it was upgraded to a Zacks Rank #1 (Strong Buy) on October 22.
Another stock, Materialise NV MTLS, which was also upgraded to a Zacks Rank #2 (Buy) on October 25, has returned 23.8% (versus the S&P 500’s 1.9% rise) since then.
Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
A hypothetical portfolio of Zacks Rank # 1 (Strong Buy) stocks returned +21.6% in the year-to-date period through November 4, 2024, vs. +28.3% for the S&P 500 index and +18.6% for the equal-weight version of the S&P 500 index.
This hypothetical portfolio returned +20.63% in 2023 vs. +24.83% for the S&P 500 index and +15% for the equal-weight S&P 500 index.
The portfolio of Zacks Rank #1 stocks is an equal-weight portfolio, while the S&P 500 is a market-cap-weighted index that has been notably distorted by the concentrated performance of mega-cap stocks since late 2022.
The Zacks Model Portfolio - consisting of Zacks Rank #1 stocks – has outperformed the S&P index by almost 13 percentage points since 1988 (through November 4, 2024, the Zacks # 1 Rank stocks generated an annualized average return of +24.1% since 1988 vs. +11.2% for the S&P 500 index).
You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Check Flexsteel Industries’ historical EPS and Sales here>>>
Check Materialise NV’s historical EPS and Sales here>>>
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Zacks Recommendation Upgrades Private Bancorp of America and Third Coast Bancshares
Shares of Private Bancorp of America, Inc. PBAM and Third Coast Bancshares, Inc. TCBX have advanced 16.5% (versus the S&P 500’s 1.7% increase) and 10.2% (versus the S&P 500’s 2% rise), since their Zacks Recommendation was upgraded to Outperform on October 29 and October 28, 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.
Zacks Focus List Stocks Sea, Walt Disney Shoot Up
Shares of Sea Limited SE, which belongs to the Zacks Focus List, have gained 22% over the past 12 weeks. The stock was added to the Focus List on March 26, 2020. Another Focus-List holding, Walt Disney Company DIS, which was added to the portfolio on March 23, 2020, has returned 20.5% over the past 12 weeks. The S&P 500 has advanced 3.3% over this period.
The Focus List portfolio returned +26.86% in 2024 (through November 30) vs. +28.09% for the S&P 500 index and +20.56% for the equal-weight S&P 500 index.
The 50-stock Zacks Focus List model portfolio returned +31.44% in 2023 vs. +26.28% for the S&P 500 index and +13.61% for the equal-weight S&P 500 index. In 2022, the portfolio produced -15.2% vs. the S&P 500 index’s -17.96%.
Since 2004, the Focus List portfolio has produced an annualized return of +12.11% (through November 30, 2024). This compares to a +10.55% annualized return for the S&P 500 index and +10.41% for the equal-weight version of the index in the same time period.
Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>
Zacks ECAP Stocks Fair Isaac & Automatic Data Processing Make Significant Gains
Fair Isaac Corporation FICO, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 7.4% over the past 12 weeks. Automatic Data Processing, Inc. ADP has followed Fair Isaac Corporation with 5.9% returns.
The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy-and-Hold stocks, returned +5.62% in November 2024 vs. the S&P 500 index’s +5.87% return (IVV ETF).
For the year-to-date period (through the end of November 2024), the portfolio returned +24.07% vs. +28.1% for the S&P 500 index.
In 2023, the portfolio returned +12.17% vs. +26.28% for the S&P 500 index. The portfolio returned -4.7% in 2022 vs. the S&P 500 index’s -17.96%.
With little to no turnover and annual rebalance periodicity, ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.
The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.
Zacks ECDP Stocks Paychex and Fastenal Outperform Peers
Paychex, Inc. PAYX, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 4.1% over the past 12 weeks. Another ECDP stock, Fastenal Company FAST, has also climbed 4.2% 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 Paychex's dividend history here>>>
Check Fastenal‘s dividend history here>>>
With an extremely low beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps significantly mitigate risk.
The Zacks Earnings Certain Dividend Portfolio (ECDP) returned +3.06% in November 2024 vs. the S&P 500 index’s +5.87% gain and the Dividend Aristocrats ETF’s (NOBL) +4.85%.
For the year-to-date period (through November 30), the portfolio returned +15.55% vs. +28.1% for the S&P 500 index and +15.61% for NOBL.
The portfolio returned -0.9% in 2023 vs. +26.28% for the S&P 500 index and +8.11% for NOBL. The portfolio returned -2.3% in 2022 vs. -17.96% for the S&P 500 index and -8.34% for NOBL.
Click here to access this portfolio on Zacks Advisor Tools.
Zacks Top 10 Stocks Freshpet Delivers Solid Returns
Freshpet, Inc. FRPT, from the Zacks Top 10 Stocks for 2024, has jumped 65.6% year to date, which compares to the S&P 500 index’s +24.2% increase.
The Top 10 portfolio returned +71.88% this year through November 30, vs. +28.09% for the S&P 500 index and +20.56% for the equal-weight version of the index.
The Top 10 portfolio returned +25.15% in 2023 vs. +26.28% for the S&P 500 index.
Since 2012, the Top 10 portfolio has produced a cumulative return of +2,112.57% through November 30th, 2024, vs. +475.56% for the S&P 500 index. The portfolio has produced an average return of +26.6% in the period 2012 through November 30, 2024, vs. +12.83% for the S&P 500 index and +10.93% for the equal-weight version of the index.
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