The Zacks Analyst Blog Highlights: M.D.C., Amedisys, KBR, Holly Energy and SkyWest

 

For Immediate Release

Chicago, IL – July 31, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: M.D.C. Holdings Inc. MDC, Amedisys Inc. AMED, KBR Inc. KBR, Holly Energy Partners L.P. HEP and SkyWest Inc. SKYW.

Here are highlights from Tuesday’s Analyst Blog:

5 Must-Buy Mid-Cap Stocks Ahead of Q2 Earnings This Week

Wall Street bulls are raging since the beginning of 2019 barring the trade-related market rout in May. All three major stock indexes (the Dow, S&P 500 and Nasdaq Composite), predominantly consisting of large-cap stocks, witnessed the best first half of any year in more than two decades.

However, trade-related concerns are still lingering. Recently, the IMF reduced its projection for global growth in 2019, raising fears about global economic slowdown. Meanwhile, mid-cap stocks have rallied in 2019. The S&P 400 Mid-cap Index (SP400) has surged 19.6% year to date. These stocks can become very useful in a volatile trading scenario.

Uncertainty About Trade Deal

Trade-related negotiation between the United States and China, which broke down abruptly in May is still in doldrums. Although high-level delegations between the two countries will sit for a face-to-face meeting this week, people close to the talks warned that a near-term solution is a remote possibility.

In May, President Trump terminated U.S.-China trade negotiations blaming China of backtracking on its commitments pledged earlier. China also blamed the Trump administration of highhandedness in its dealing with Chinese tech behemoths.

So far, the United States has imposed 25% tariffs on $250 billion Chinese goods while China reciprocated with 25% tariffs on $110 billion of U.S. exports. Moreover, Trump has threatened to impose 25% tariff on another $325 billion of Chinese goods while China is likely to stop exporting crucial rare earth materials to the United States.

IMF Reduces Global Growth Projection  

On Jul 22, the IMF reduced global growth projection for 2019 to 3.2% from 3.3% forecast in April. This was the second reduction of IMF’s global growth projection in the last six months. The agency cited prolonged trade conflict between the United States and China as having a negative effect on other regions of the world, especially in the European Union.

Moreover, several geopolitical issues like Brexit, Iran-U.S. oil-related conflict and political problems in several countries will likely hinder the growth of the global economy. The IMF has projected 3.5% global growth in 2020. However, this figure is also below its previous prepetition of 3.6% global growth.

Why Mid-Cap Stocks?

Investment in mid-cap stocks is often recognized as a good portfolio diversification strategy. These stocks combine attractive attributes of both small and large-cap stocks. If the trade deal breaks down, mid-cap stocks will be less susceptible to losses than their large-cap counterparts owing to less international exposure.

However, if the Wall Street bull run continues owing to Fed’s rate cut or strong economic data, these stocks will gain higher than small caps due to established management teams, broad distribution network, brand recognition and ready access to capital markets.

Our Top Picks

We have narrowed down our search to five mid-cap stocks. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Hold) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.

All five stocks have popped in the last three months despite volatility and still have upside left.

Our research shows that for stocks with the combination of a Zacks Rank #3 or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are expected to pop on their earnings release irrespective of already solid gains year to date.

M.D.C. Holdings Inc. is engaged in the construction, sale and related financing of residential housing and the acquisition and development of land for use in the United States. The stock sports a Zacks Rank #1.

M.D.C. Holdings has an Earnings ESP of +2.68% for the current quarter. The Zacks Consensus Estimate for the current quarter and year improved 8.3% and 7.9%, respectively, over the last 30 days. The company delivered positive earnings surprise in two out of the last four quarters with an average beat of 8.3%. The stock has surged 15.2% in the past three months.  M.D.C. Holdings is expected to release earnings results on Jul 31, before the opening bell.

Amedisys Inc. is a leading provider of healthcare in the home with a vision of becoming the premiere solution for patients. It operates through three segments: Home Health, Hospice, and Personal Care. The stock sports a Zacks Rank #1.

Amedisys has an Earnings ESP of +1.91% for the current quarter. The company has an expected earnings growth rate of 12.4% for the current year. The company delivered positive earnings surprise in the last four quarters with an average beat of 20.8%. The stock has surged 14.4% in the past three months.  Amedisys is expected to release earnings results on Jul 31, after the closing bell.

KBR Inc. provides professional services and technologies across the asset and program life-cycle within the government services and hydrocarbons industries worldwide. The company operates through three segments: Government Services, Technology, and Hydrocarbons Services. The stock carries a Zacks Rank #2.

KBR has an Earnings ESP of +1.16% for the current quarter. The company has an expected earnings growth rate of 17.7% and 9.2% for the current quarter and year, respectively. The Zacks Consensus Estimate for the current quarter and year improved 2.6% and 0.6%, respectively, over the last 30 days.

The company delivered positive earnings surprise in the last four quarters with an average beat of 8.9%. The stock has soared 17.1% in the past three months. KBR is expected to release earnings results on Jul 31, before the opening bell.

Holly Energy Partners L.P. owns and operates petroleum product and crude pipelines, storage tanks, distribution terminals, loading rack facilities, and refinery processing units primarily in West Texas, New Mexico, Arizona and Utah. The stock has a Zacks Rank #2.

Holly Energy has an Earnings ESP of +1.18% for the current quarter. The company has an expected earnings growth rate of 13.2% and 8.8% for the current quarter and year, respectively. The Zacks Consensus Estimate for the current quarter and year improved 2.4% and 1.6%, respectively, over the last 30 days.

The company delivered positive earnings surprise in two out of the last four quarters with an average beat of 1.7%. The stock has gained 4.5% in the past three months. Holly Energy is expected to release earnings results on Jul 31, before the opening bell.

SkyWest Inc. is the holding company for two scheduled passenger airline operations and an aircraft leasing company. Its airline business provides commercial air service in cities throughout North America. The stock carries a Zacks Rank #2.

SkyWest has an Earnings ESP of +3.25% for the current quarter. The company has an expected earnings growth rate of 11.9% and 15.1% for the current quarter and year, respectively. The Zacks Consensus Estimate for the current quarter and year improved 0.6% and 0.2%, respectively, over the last 30 days.

The company delivered positive earnings surprise in the last four quarters with an average beat of 14.4%. The stock has gained 2.8% in the past three months. SkyWest is expected to release earnings results on Jul 31, after the closing bell.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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