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Take the Zacks Approach to Beat the Market: NVIDIA, Lisata, Shopify in Focus

All three most widely followed indexes closed the last week in the green, driven by the tech rally. Both the Dow Jones Industrial Average and the Nasdaq Composite advanced 2%, while the S&P 500 gained 1.8%. For the tech-heavy Nasdaq, this was a sixth consecutive winning week.

Throughout the week, trade remained upbeat about a probable breakthrough in the debt-ceiling negotiations between the Democrats and the Republicans, and a deal was finally struck. This was confirmed by a bipartisan vote in the House of Representatives in favor of raising the debt ceiling of $31.4 trillion by another two years. Whenever investor mood reflects lesser chances of an economic slowdown, mega-cap growth stocks do well because their future valuation looks lucrative. Thus, tech stocks made the most of the news.

However, with mixed economic numbers from the manufacturing sector and the labor market, opinion is divided on whether a rate pause will be announced at the June Fed meeting. Now that the debt-ceiling crisis has finally been averted, all eyes are set on the central bank’s next policy move.

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

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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:

Mitie and Usio Surge Following Zacks Rank Upgrade

Shares of Mitie Group plc MITFY have soared 25.5% (versus the S&P 500’s 7.4% increase) since it was upgraded to a Zacks Rank #2 (Buy) on March 22.

Another stock, Usio, Inc. USIO, which was also upgraded to a Zacks Rank #2 on March 20, has returned 20.5% (versus the S&P 500’s 9.8% 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.

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 Mitie Group’s historical EPS and Sales here>>>

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

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Zacks Recommendation Upgrade Drives Lisata and Comfort Systems Higher

Shares of Lisata Therapeutics, Inc. LSTA and Comfort Systems USA, Inc. FIX have advanced 29.9% (versus the S&P 500’s 4.8% rise) and 15.2% (versus the S&P 500’s 9.8% increase), respectively, since their Zacks Recommendation was upgraded to Outperform on April 3 and March 20, 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 NVIDIA, Shopify Shoot Up

Shares of NVIDIA Corporation NVDA, which belong to the Zacks Focus List, have risen 71.3% over the past 12 weeks. The stock was added to the Focus List on May 20, 2019. Another Focus-List holding, Shopify Inc. SHOP, which was added to the portfolio on September 6, 2022, has returned 40.6% over the past 12 weeks. The S&P 500 has gained 11.9% 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 McCormick and Monster Beverage Make Significant Gains

McCormick & Company MKC, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 24.7% over the past 12 weeks. Monster Beverage Corporation MNST has followed McCormick with 18.8% 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 Intercontinental Exchange and McDonald's Outperform Peers

Intercontinental Exchange, Inc. ICE, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 13.2% over the past 12 weeks. Another ECDP stock, McDonald's Corporation MCD, has climbed 10.6% 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 Intercontinental Exchange’s dividend history here>>>

Check McDonald’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 Q1 2023 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.

Celsius Makes It Into The Zacks Top 10 Stocks

Celsius Holdings, Inc. CELH, from the Zacks Top 10 Stocks for 2023, has gained 32.8% year to date, which compares to a 12.3% 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

Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report

McDonald's Corporation (MCD) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

McCormick & Company, Incorporated (MKC) : Free Stock Analysis Report

Monster Beverage Corporation (MNST) : Free Stock Analysis Report

Comfort Systems USA, Inc. (FIX) : Free Stock Analysis Report

Shopify Inc. (SHOP) : Free Stock Analysis Report

ProShares S&P 500 Dividend Aristocrats ETF (NOBL): ETF Research Reports

Mitie Group PLC. (MITFY) : Free Stock Analysis Report

Celsius Holdings Inc. (CELH) : Free Stock Analysis Report

Usio Inc (USIO) : Free Stock Analysis Report

Lisata Therapeutics, Inc. (LSTA) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research