For Immediate Release
Chicago, IL – August 3, 2020 – Zacks Equity Research Shares of Turning Point Brands, Inc. TPB as the Bull of the Day, Hilton Grand Vacations Inc. HGV asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Fastenal Company FAST, Denbury Resources Inc. DNR and Deere & Company DE.
Here is a synopsis of all five stocks:
Bull of the Day:
I get it. You are a genius, part of the DDTG crew and all stonks go up. Yes, I said stonks, not stocks. Your biggest dilemma is Huracan versus F8 Spider. The answer is F8 Spider because Lambos are for pretenders. For the rest of us, investing is hard. We are not sure which stocks actually will continue to go up and which are death traps which will turn our investments into money pits. If only there were some system we could use to put the odds in or favor.
Well, good news folks. Using the Zacks Rank can help you find stocks which have strong earnings trends, which often times leads to price appreciation. The TLDR of this is, companies which continue to make more money over the long run have a tendency to see their stocks rise the most.
Stocks which are Zacks Rank #2 (Buy) have the strongest earnings trends. This means that these stocks have extraordinary potential. One such stock is today’s Bull of the Day. I’m talking about Zacks Rank #1 (Strong Buy) Turning Point Brands. Turning Point Brands, Inc., together with its subsidiaries, provides other tobacco products in the United States and Canada. The company operates in three segments: Smokeless Products, Smoking Products, and NewGen Products.
Turning Point Brands is in the Tobacco industry which ranks in the Top 28% of our Zacks Industry Rank. The reason for the positive Zacks Rank is the upside earnings revisions coming from analysts. Over the last thirty days, analysts have increased their earnings estimates for the stock. That bullish activity has increased our Zacks Consensus Estimates for the current year from $1.89 to $2.10 while next year’s number is up from $2.00 to $2.15.
Bear of the Day:
Days like last Friday can make investors very complacent. Stocks go up, and it seems like any investment you make is a sure thing. The reality of the situation is that stocks can go down. You can lose your shirt betting on the wrong horse. Companies which have weak earnings trends are stocks to avoid in any market. The false sense of hope we are getting in the current bull market can lead some investors into a sense of security. That could be an error which proves itself to be very costly in the long run.
Today’s Bear of the Day is a stock with a weak earnings trend. That means, analysts have dropped their earnings estimates. I’m talking about Hilton Grand Vacations. Hilton Grand Vacations Inc., a timeshare company, develops, markets, and operates vacation ownership resorts primarily under the Hilton Grand Vacations brand. The company operates in two segments, Real Estate Sales and Financing; and Resort Operations and Club Management. It sells vacation ownership intervals; manages resorts; operates a points-based vacation club; and finances and services loans provided to consumers for their timeshare purchases. The company also manages and operates the points-based Hilton Grand Vacations Club and Hilton Club exchange programs, which provide exchange, leisure travel, and reservation services to approximately 326,000 members, as well as engages in the rental of inventory made available due to ownership exchanges through its club programs.
The Hotels and Motels industry ranks in the Bottom 5% of our Zacks Industry Rank. The reason for the unfavorable Zacks Rank is the negative earnings estimate revisions coming from analysts. Over the last sixty days, the Zacks Consensus Estimate for the current year has plummeted from 14 cents earnings per share to a loss of 47 cents. Next year’s number has dipped from $2.08 to $1.99. Obviously, optimism for next year is everywhere.
Hilton Grand Vacations is a Zacks Rank #4 (Sell). The highest ranking any stock in the Hotels and Motels industry is a Zacks Rank #3 (Hold).
3 Zacks Rank #1 Stocks Making New Highs
When you think about the last four months, it’s kind of amazing that any stocks are making new highs. The indices have certainty made up a lion’s share of the coronavirus selloff from earlier this year, but the economy is still far from recovered.
However, there are plenty of companies fighting through this pandemic and reaching new highs again without waiting for a vaccine or “all clear” from the CDC. And we have a screen that finds those stocks. It’s called “Zacks #1 Rank New Highs”.
Stocks making new highs tend to keep moving higher until something stops the momentum. Below are three stocks that are still moving higher… AND have a strong Zacks Rank. Click here for the full list.
Fastenal sells all kinds of industrial and construction supplies, including nuts, screws, studs, concrete anchors, wire rope, struts, rivets, tools and welding supplies, and much more.
But in the second quarter, personal protective equipment took centerstage… for obvious reasons. The company helped governments and first responders with masks, gloves, respirators, etc. in the fight against the coronavirus.
As a result, these PPE products surged in the quarter and helped FAST to more than offset a slump in its more traditional segments, which was due to the pandemic shutdown.
Sales in the quarter reached $1.51 billion, beating the previous year by 10.3% and bettering our expectations by 1.7%. Earnings of 42 cents grew 16.7% year over year, which was also the same percentage that it surpassed the Zacks Consensus Estimate.
FAST has now beaten earnings expectations in three of the past four quarters. And shares have jumped more than 66% since the coronavirus low on March 23.
The thing about surges, though, is that they don’t last. In fact, PPE sales waned slightly in June (though we’ll have to see if they picked up again in July with the rise in cases and delay of openings). However, business activity for more traditional sales, which were down for most of the quarter, improved in May and June.
So regardless of how long this pandemic and shutdown last, FAST should be able to continue reporting solid numbers. Analysts certainly believe so, which explains why earnings estimates are rising for this year and next.
The Zacks Consensus Estimate for the current year is up 10% in the past two months to $1.43. Expectations for next year are up 7.7% in that time to $1.53. Therefore, earnings are currently expected to improve 7% year over year.
Analysts really liked last week’s second-quarter report from Danaher. Earnings estimates for the company have surged in the past few days and shares are now up more than 67% from the coronavirus low by late March.
DHR is a global conglomerate that designs, manufacturers and markets diverse lines of professional, industrial, commercial and consumer products. Approximately half of its revenues come from the Life Sciences segment, which provides research tools used to analyze things like genes, proteins and cells.
The other two segments are Diagnostics and Environmental & Applied Solutions, which account for more than 31% and nearly 19% of revenues, respectively.
The company reported earnings per share of $1.44 for the second quarter, which was nearly 36% better than the Zacks Consensus Estimate. But that’s not the most impressive thing. DHR has now beaten expectations for 18 consecutive quarters!
Sales of $5.3 billion jumped over 19% from last year and topped our expectations by 6.7%. Looking forward, core revenue growth is expected in the low-to-mid-single digits for the third quarter.
Now analysts expect DHR to report $5.36 for this year, which marks a 9.8% improvement over the past month. And most of that gain has come since the report last week.
Earnings are then expected at $6.19 for next year, which is an advance of 8% in 30 days and also suggests year-over-year improvement of 15.5%.
Deere & Company
Forget about your streaming services and online retailers, because there’s not a more essential business than farming. Where would your local grocery store or warehouse club be without these folks?
However, it’s also one of the most besieged industries out there. In addition to all the challenges brought by the coronavirus, do you remember what the big story was before the pandemic? It was the trade war with China, a ‘war’ that has yet to really be resolved despite the Phase 1 deal. In fact, tensions are rising again between the two countries regarding technology, but its agriculture that’s on the front lines and will be the first to feel the effects.
However, farmers are known for being tough… and so is their industry. Currently, the manufacturing – farm equipment space is in the Top 11% of the Zacks Industry Rank. And one of the major names from this area is good old Deere & Co.
The company is the world’s largest producer of agricultural equipment. Whether you own a farm with acres of land or just a house with a backyard, you probably own something from Deere.
Furthermore, you may not think a company that’s been around since 1837 is very cutting edge, but DE is known for making steady investments in new products with advanced technologies. It’s constantly working on ways to make farming more automated, easier to use and more efficient.
In its second quarter, DE reported earnings per share of $2.11 on revenue of $8.22 billion. Both of these results slipped from year-ago levels, but they also managed to easily beat Zacks Consensus Estimates. The bottom line surprised by 19.2%, while the top beat by more than 8%.
Analysts remain optimistic moving forward, as their earnings estimates attest. They expected earnings per share of $6.22 for this year (ending October 2020), which is up 6.3% in the past two months. Expectations for next year (ending October 2021) have risen 8.5% in that time to $8.59.
Year-over-year profit growth expectations are a very healthy 38.1% at this time.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we’re targeting >>
Zacks Investment Research
800-767-3771 ext. 9339
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks “Terms and Conditions of Service” disclaimer. www.zacks.com/disclaimer.
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/performancefor information about the performance numbers displayed in this press release.
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
Deere Company (DE) : Free Stock Analysis Report
Fastenal Company (FAST) : Free Stock Analysis Report
Denbury Resources Inc. (DNR) : Free Stock Analysis Report
Turning Point Brands, Inc. (TPB) : Free Stock Analysis Report
Hilton Grand Vacations Inc. (HGV) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research