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Beat the Market Like Zacks: ADP, Walmart, Starbucks in Focus

U.S. stocks ended the September 30 trading session in the red, with the three most widely followed indexes closing out a tumultuous week, month and quarter. The Dow and the S&P 500 ended the week down 2.9%, while the Nasdaq lost almost 2.7%.

For September, the Dow, the S&P 500 and the Nasdaq tumbled 8.8%, 9.3% and 10.5%, respectively. In fact, the Dow and the S&P 500 registered their biggest monthly decline since March 2020 and their worst September since 2002. The tech-heavy Nasdaq too recorded its worst September since 2008.

Finally, for the third quarter, the Dow, the S&P 500 and the Nasdaq dropped 6.7%, 5.3% and 4.1%, respectively. The Dow for the first time witnessed three consecutive quarterly losses since 2015. In the same way, the S&P 500 and the Nasdaq faced three straight quarterly losses since 2009.

U.S. stocks took a beating following the Federal Reserve’s resolve to continue increasing interest rates to curb a stubborn rise in inflation. The Fed has already hiked its benchmark rate to the highest level since the beginning of 2008.

However, investors fear that such an aggressive tightening could lead to rising borrowing costs, impacting consumer outlays and holding up economic progression. This led to the recent brutal bout of selling.

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:

LiveVox Holdings, StoneX Group Soar Following Zacks Rank Upgrade

Shares of LiveVox Holdings, Inc. LVOX have gained 77.7% since it was upgraded to a Zacks Rank #2 (Buy) on July 11.

Another stock, StoneX Group Inc. SNEX, was upgraded to a Zacks Rank #1 (Strong Buy) on July 12 and has returned 7.8% 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 (Strong Buy) stocks here >>>

Check LiveVox Holdings’ historical EPS and Sales here>>>

Check StoneX Group’s historical EPS and Sales here>>>


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Zacks Recommendation Upgrade Drives Teekay Tankers, Target Hospitality Higher 

Shares of Teekay Tankers Ltd. TNK and Target Hospitality Corp. TH have gained 70.6% and 27.1%, respectively, since both of their Zacks Recommendation was upgraded to Outperform on July 13.

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 Stocks Arcosa, ICF International Surge  

Shares of Arcosa, Inc. (ACA), which belongs to the Zacks Focus List, have gained 25.7% over the past three months. The stock was added to the Focus List on January 6, 2020. Another Focus-List holding, ICF International, Inc. ICFI, which was added to the portfolio on April 23, 2018, has returned 15.7% over the past three months. 

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.

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 Stocks Automatic Data Processing, Walmart Remain Resilient

Automatic Data Processing, Inc. ADP, a component of our Earnings Certain Admiral Portfolio (ECAP), has gained 4.1% over the past three months. Walmart Inc. WMT has followed Automatic Data Processing with 3.4% returns.

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.

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 Starbucks, J. M. Smucker Witnesses Decent Gains

Starbucks Corporation SBUX, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 6.3% over the past three months. Another ECDP stock, The J. M. Smucker Company SJM, has returned 4.1% 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 Starbucks’ dividend history here>>>

Check J. M. Smucker’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 ECDP has consistently outperformed the S&P 500 Dividend Aristocrats ETF NOBL.

Click here to access this portfolio on Zacks Advisor Tools.


7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.8% per year. So be sure to give these hand-picked 7 your immediate attention. 

See them now >>

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
 
Automatic Data Processing, Inc. (ADP): Free Stock Analysis Report
 
Walmart Inc. (WMT): Free Stock Analysis Report
 
Starbucks Corporation (SBUX): Free Stock Analysis Report
 
The J. M. Smucker Company (SJM): Free Stock Analysis Report
 
ICF International, Inc. (ICFI): Free Stock Analysis Report
 
Teekay Tankers Ltd. (TNK): Free Stock Analysis Report
 
ProShares S&P 500 Dividend Aristocrats ETF (NOBL): ETF Research Reports
 
Target Hospitality Corp. (TH): Free Stock Analysis Report
 
StoneX Group Inc. (SNEX): Free Stock Analysis Report
 
LiveVox Holdings, Inc. (LVOX): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
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