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Beat the Market the Zacks Way: Starbucks (SBUX), Intuit (INTU), Block (SQ) in Focus

The three most widely followed indexes closed in the green last week. The Dow Jones Industrial Average, the S&P 500 and the tech-heavy Nasdaq gained 2.7%, 3.7% and 4.1%, respectively. This was their first winning week since mid-August.

While investors remained apprehensive about hawkish comments from Fed officials on further rate hikes, the week’s rebound can be attributed to investors’ reaction to overselling through the past month.

Market participants will keep a close watch on inflation data slated for release this week and the Fed’s reaction to it, to get a better idea of its future actions.

Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.

Zacks Research guided investors last week with its time-tested methodologies as usual. 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 from last week:

WESCO, East West Bancorp Gain Following Zacks Rank Upgrade

Shares of WESCO International, Inc. WCC have gained 9.7% since it was upgraded to a Zacks Rank #1 (Strong Buy) on September 3. The rating upgrade was primarily driven by an upward trend in earnings estimates, one of the most powerful forces impacting stock prices. A company's changing earnings picture is at the core of the Zacks rating.

For WCC, the consensus EPS estimate of $16.02 for the current year has increased nearly 3% over the past month.

Rising earnings estimates and the consequent Zacks Rank upgrade for WCC imply an improvement in the company's underlying business. Investors have started showing their appreciation for this improving business trend by pushing the stock higher.

Check WESCO’s historical EPS and Sales here>>>

East West Bancorp, Inc. EWBC, another stock upgraded to a Zacks Rank #1 on September 3, has returned 6.7% over the past week. A 7.9% increase in the current-year consensus EPS estimate over the past two months triggered the rating upgrade.

The Zacks Rank 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 (Strong Buy) stocks here >>>

Check East West Bancorp’s historical EPS and Sales here>>>

Zacks Investment Research
Zacks Investment Research


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Zacks Recommendation Upgrade Pushes Twin Disc, Centrus Energy Higher

Shares of Twin Disc, Incorporated TWIN and Centrus Energy Corp. LEU have gained 15.9% and 15.3%, respectively, since their Zacks Recommendation was upgraded to Outperform on September 6.

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 Model Portfolio Stock Block Surges Ahead

Shares of Block, Inc. SQ, which belongs to the Zacks Focus List, have shot up 12% over the past week. 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.

Block was added to the Focus List on March 28, 2017, at $17.25 per share. The stock has gained 330.7% since then to close the last trading session at $74.29.

Since its inception on February 1, 1996, the Focus List portfolio has delivered an annualized return of +12.9%.

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 Stock Intuit Outperforms Market

Intuit Inc. INTU, a component of our Earnings Certain Admiral Portfolio (ECAP), rose 7.13% last week. ECAP is a model portfolio of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks.

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.

In terms of last week’s returns, Tractor Supply Company TSCO and Rollins, Inc. ROL followed Intuit with 7.1% and 7.05% gains, respectively.

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 Stock Starbucks Makes Solid Gains

Starbucks Corporation SBUX, which is part of our Earnings Certain Dividend Portfolio (ECDP), advanced 6.9% last week. The inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to the stock’s stability. Check Starbucks’ 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 ECDP has consistently outperformed the S&P 500 Dividend Aristocrats ETF NOBL.

Click here to access this portfolio on Zacks Advisor Tools.


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
 
Starbucks Corporation (SBUX) : Free Stock Analysis Report
 
WESCO International, Inc. (WCC) : Free Stock Analysis Report
 
Tractor Supply Company (TSCO) : Free Stock Analysis Report
 
Intuit Inc. (INTU) : Free Stock Analysis Report
 
Rollins, Inc. (ROL) : Free Stock Analysis Report
 
East West Bancorp, Inc. (EWBC) : Free Stock Analysis Report
 
Twin Disc, Incorporated (TWIN) : Free Stock Analysis Report
 
Block, Inc. (SQ) : Free Stock Analysis Report
 
ProShares S&P 500 Dividend Aristocrats ETF (NOBL): ETF Research Reports
 
Centrus Energy Corp. (LEU) : Free Stock Analysis Report
 
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Zacks Investment Research