Yahoo Finance Beat the Market the Zacks Way: Shopify, Meta, Microsoft in Focus
Two of the three most widely followed indexes closed the last week in the green, while one ended with a loss. The Dow Jones Industrial Average declined 1%, while the S&P 500 and the Nasdaq Composite gained 0.3% and 2.5%, respectively.
Throughout the week, the market remained volatile on the fear that the two major political parties would not be able to strike a deal on the debt ceiling to avoid a default. There were round-the-clock negotiations and much grandstanding, but no agreement was being reported while the June 1 deadline was approaching. However, towards the end of the week, the attitudes of both sides mellowed, and indications emerged that an agreement had possibly been reached. Along with economic data suggesting that the economy is still staving off a recession, this ensured that the market did not close a losing week.
The PCE inflation numbers have, however, kept investors jittery. A still-high headline PCE means the Federal Reserve might rethink its strategy and keep hiking interest rates. Treasury yields went up, and whether another 25 bps rate hike would be announced at the Fed’s June meeting remains to be seen.
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:
Ikena and Meta Platforms Surge Following Zacks Rank Upgrade
Shares of Ikena Oncology, Inc. IKNA have soared 40.5% (versus the S&P 500’s 7.4% increase) since it was upgraded to a Zacks Rank #2 (Buy) on March 16.
Another stock, Meta Platforms, Inc. META, which was upgraded to a Zacks Rank #1 (Strong Buy) on March 16, has returned 32.5% 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.
This stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally audited track record, with Zacks Rank #1 stocks generating an average annual return of +24.8% since 1988.You can see the complete list of today’s Zacks Rank #1 stocks here >>>
A hypothetical portfolio of Zacks Rank #1 stocks has returned 9.7% this year (through March 6) versus 5.4% for the S&P 500 Index.
Check Ikena’s historical EPS and Sales here>>>
Check Meta Platforms’ historical EPS and Sales here>>>
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Zacks Recommendation Upgrade Drives CIRCOR and E.ON Higher
Shares of CIRCOR International, Inc. CIR and E.ON SE EONGY have advanced 12.2% (versus the S&P 500’s 7.4% rise) and 9% (versus the S&P 500’s 6.8% increase), respectively, since their Zacks Recommendation was upgraded to Outperform on March 16 and March 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 Microsoft, Micron Shoot Up
Shares of Microsoft Corporation MSFT, which belong to the Zacks Focus List, have risen 32.6% over the past 12 weeks. The stock was added to the Focus List on February 1, 2016. Another Focus-List holding, Micron Technology, Inc. MU, which was added to the portfolio on December 27, 2016, has returned 31% over the past 12 weeks. The S&P 500 has gained 3.7% over this period.
The Zacks Focus List is a model portfolio of 50 hand-picked stocks that possess the right fundamental ingredients to outperform the market over the next 12 months. These 50 stocks are picked from a long list of stocks with the highest Zacks Rank.
The 50-stock Zacks Focus List model portfolio returned 11.1% in Q1 2023 versus 7.5% for the S&P 500 Index. In 2022, the portfolio produced a 15.2% loss versus the S&P 500 Index’s 18% decline.
Since 1996, the Focus List portfolio has produced an annualized return of 12.9% through March 31, 2023. This compares to an 8.9% annualized return for the S&P 500 Index in the same time period.
Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>
Zacks ECAP Stocks Oracle and Accenture Make Significant Gains
Oracle Corporation ORCL, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 19.7% over the past 12 weeks. Accenture plc ACN has followed Oracle with 14.5% returns.
ECAP, which consists of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks, returned 3.7% in Q1 2023 versus 7.5% for the S&P 500 Index. The portfolio returned negative 4.7% in 2022 versus the S&P 500 Index’s 18% decline.
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 General Mills and PepsiCo Outperform Peers
General Mills, Inc. GIS, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 6.6% over the past 12 weeks. Another ECDP stock, PepsiCo, Inc. PEP, has climbed 5.9% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid the heightened market volatility contributed to this performance.
Check General Mills’ dividend history here>>>
Check PepsiCo’s dividend history here>>>
With an extremely low Beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps significantly mitigate risk.
ECDP returned 0.04% in Q12023 versus 7.5% for the S&P 500 Index and 1.4% for the ProShares S&P 500 Dividend Aristocrats ETF NOBL. The portfolio returned negative 2.3% in 2022 versus an 18% decline for the S&P 500 Index and an 8.3% loss for NOBL.
Click here to access this portfolio on Zacks Advisor Tools.
Shopify Makes It Into The Zacks Top 10 Stocks
Shopify Inc. SHOP, from the Zacks Top 10 Stocks for 2023, has gained 66.3% year to date, which compares to an 8.8% gain for the S&P 500 Index.
The portfolio returned 5.2% in Q1 2023 versus 7.5% for the S&P 500 (the equal-weighted index, a more appropriate benchmark, returned 2.7 % in Q1). The portfolio returned a negative 15.8% in 2022 versus an 18.1% decline for the S&P 500 Index. Since 2012, the Top 10 portfolio has generated an annualized return of 22.4% versus 12.5% for the S&P 500 Index.
Since the start of 2012, the Zacks Top 10 Stocks delivered a cumulative return of 827.6% through the end of 2022 versus a 265% cumulative return for the S&P 500 Index.
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
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Accenture PLC (ACN) : Free Stock Analysis Report
General Mills, Inc. (GIS) : Free Stock Analysis Report
Micron Technology, Inc. (MU) : Free Stock Analysis Report
PepsiCo, Inc. (PEP) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
CIRCOR International, Inc. (CIR) : Free Stock Analysis Report
E.ON SE (EONGY) : Free Stock Analysis Report
Shopify Inc. (SHOP) : Free Stock Analysis Report
ProShares S&P 500 Dividend Aristocrats ETF (NOBL): ETF Research Reports
Ikena Oncology, Inc. (IKNA) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
