Yahoo Finance Take the Zacks Approach to Beat the Markets: Robinhood Markets, Victory Capital, NVIDIA in Focus
The three most widely followed indexes closed last week in the red. The S&P 500, the Nasdaq Composite and the Dow Jones Industrial Average declined marginally by 0.54%, 1.7% and 0.43%, respectively.
Investors are concerned about the slowest gross domestic product (GDP) growth rate in nearly two years, unfavorable macroeconomic data and disappointing earnings results.
According to the Department of Commerce, the U.S. GDP growth rate for Q1 was revised downward to 1.3% from 1.6% reported earlier compared to the 3.4% GDP growth rate in Q4 of 2023. The growth was the weakest since the spring of 2022.
Consumer spending in the first quarter rose at an annual rate of 2%, down from an earlier estimate of 2.5%. The pace of consumer spending decelerated than previously thought, signifying a slowdown in the broader economy due to high interest rates and persistent inflation. The personal consumption expenditures index, which is the Federal Reserve’s preferred inflation measure, rose 0.3% month over month and 2.7% year over year in April in line with forecasts.
High interest rate in two decades is impacting corporate profitability. There is still uncertainty from the Fed regarding interest rate cut initiation. However, the CME Fedwatch Tool currently assigned a 56% probability that the Fed will cut the benchmark lending rate by 25 basis points in November and a 77.5% chance that it will be reduced by 25 basis points in December.
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:
Robinhood Markets and Pinnacle West Capital Interactive Following Zacks Rank Upgrade
Shares of Robinhood Markets, Inc. HOOD have gained 8.4% (versus the S&P 500’s 2% rise) since it was upgraded to a Zacks Rank #2 (Buy) on March 27.
Another stock, Pinnacle West Capital Corporation PNW, which was upgraded to a Zacks Rank #2 on March 25 has returned 9.3% (versus the S&P 500’s 1.5% 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 has returned +6.1% in the year-to-date period through April 1, 2024, vs. +11.3% for the S&P 500 index and +7.7% 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 index is a market-cap-weighted index that has been notably distorted by the concentrated performance of mega-cap stocks since October 2022.
The Zacks Model Portfolio — consisting of Zacks Rank #1 stocks — has outperformed the S&P index by more than 16 percentage points since 1988 (Through April 1, 2024, the Zacks # 1 Rank stocks generated an annualized return of +27.6% since 1988 vs. +11.1% for the S&P 500 index). You can see the complete list of today’s Zacks Rank #1 stocks here >>>
Check Robinhood Market’s historical EPS and Sales here>>>
Check Pinnacle West Capital’s historical EPS and Sales here>>>
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Zacks Recommendation Upgrades Banco Macro and Victory Capital
Shares of Banco Macro S.A. BMA and Victory Capital Holdings VCTR have advanced 52.4% (versus the S&P 500’s 4% increase) and 25.3% (versus the S&P 500’s 1.5% rise), respectively, since their Zacks Recommendation was upgraded to Outperform on March 18 and March 25, 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, Goldman Sachs Shoot Up
Shares of NVIDIA Corporation NVDA, which belongs to the Zacks Focus List, have gained 25.3% over the past 12 weeks. The stock was added to the Focus List on May 20, 2019. Another Focus-List holding, The Goldman Sachs Group, Inc. GS, which was added to the portfolio on July 11, 2018, has returned 18% over the past 12 weeks. The S&P 500 has advanced 3.06% over this period.
The Focus List portfolio returned +10.23% in 2024 Q1 vs. +10.56% for the S&P 500 index and +7.9% 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 +11.91% (through March 31, 2024). This compares to a +10.25% 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 Costco Wholesale & Colgate-Palmolive Make Significant Gains
Costco Wholesale Corporation COST, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 11.6% over the past 12 weeks. Colgate-Palmolive Company CL has followed Costco Wholesale Corporation with 5.6% returns.
The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy-and-Hold stocks, has returned +9.08% in the year-to-date period (through March 31, 2024) vs. +10.42%.
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, 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 Quest Diagnostics and PepsiCo Outperform Peers
Quest Diagnostics Incorporated DGX, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 11.6% over the past 12 weeks. Another ECDP stock, PepsiCo, Inc. PEP, has climbed 6% 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 Quest Diagnostics’ 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.
The Zacks Earnings Certain Dividend Portfolio (ECDP) has returned +4.47% in the year-to-date period (through March 31, 2024) vs. +10.42% for the S&P 500 index (IVV) and +6.9% for the Dividend Aristocrats ETF (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 — Sprouts Farmers Market Delivers Solid Returns
Sprouts Farmers Market, Inc. SFM, from the Zacks Top 10 Stocks for 2024, has jumped 64.2% year to date, which compares to the S&P 500 index’s +10.95% increase.
The Top 10 portfolio returned +19.56% in 2024 Q1 vs. +10.56% for the S&P 500 index and +7.9% 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 +1,060.9% through the end of 2023 vs. +360.1% for the S&P 500 index.
Since 2012, the Zacks Top 10 portfolio has produced an annualized return of +25.02% through the end of 2024 Q1 vs. +14.1% for the S&P 500 index and +12.7% for the equal-weight version of the index. The portfolio has produced a cumulative return of +1,442.3% vs. +403.03% for the S&P 500 index and +331.29% for the equal-weight 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
The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
Quest Diagnostics Incorporated (DGX) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
PepsiCo, Inc. (PEP) : Free Stock Analysis Report
Colgate-Palmolive Company (CL) : Free Stock Analysis Report
Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
Macro Bank Inc. (BMA) : Free Stock Analysis Report
Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
ProShares S&P 500 Dividend Aristocrats ETF (NOBL): ETF Research Reports
Victory Capital Holdings, Inc. (VCTR) : Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report
