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The market posted its second-straight day of solid gains on Wednesday, as Wall Street continues to buy up beaten-down stocks. The recent rally has helped restart the recovery that was disrupted by massive drops from PayPal, Facebook/Meta, and a few other big-tech names last week.
The Nasdaq has now popped roughly 8% off its late January lows, while the S&P 500 is up nearly 6% since then. The benchmark index is approaching its 50-day moving average once again. The rebound comes even as the 10-year U.S. Treasury is on the brink of breaking above 2% for the first time since the summer of 2019. Wall Street is also waiting on January’s Consumer Price Index results that are due out Thursday morning.
Prices are not projected to come down and any surprise to the high-end could place more pressure on the Fed. That said, the recent market positivity might suggest that Wall Street has already priced in a fair amount of rate hikes in 2022.
Image Source: Zacks Investment Research
It is hard to get a solid read on the market in the early days of 2022, amid rising inflation, supply chain setbacks, and the impending end of super-easy money. There could be another wave of selling and the market might simply be in for a choppier stretch following three years of huge returns.
This doesn’t mean investors should run away because staying constantly exposed to the market is a tried-and-true tactic to help long-term investors achieve success. We have already seen Wall Street buy some of the tech titans after they fell.
If Apple and other stable powers fall again, a similar pattern of buying great stocks at discounts will likely follow. On top of that, the two things that drive stocks prices over the long haul, earnings and interest rates, should support equities. The nearby chart shows the 10-year U.S. Treasury is still below its 10-year median and well off its highs—which are all extremely low historically.
Builders First Source manufactures everything from roof and floor trusses and stairs to vinyl windows, custom millwork, doors and nearly everything else in between. Along with various other products, Builders First Source offers design services, product installation, and turn-key framing. Overall, Builders First Source is one of the largest U.S suppliers of building products, prefabricated components, and services to the professional market for new residential construction and remodeling.
Builders First Source has steadily grown its revenue over the past decade, including multiple years of big double-digit expansion. The Dallas-based company operates in roughly 40 states, with a market presence in 47 of the top 50 and 84 of the top 100 metropolitan statistical areas. BLDR provides great exposure to various trends in housing and helps play the entire market instead of picking winners within the homebuilders.
Builders First Source has benefitted from the covid-boosted housing market. Some are rightfully worried about rising interest rates, but the market is finally being driven by millennials who are starting families a bit later in life. As we mentioned with the 10-year Treasury, 30-year mortgage rates are still very attractive compared to their pre-covid levels and even better historically.
Image Source: Zacks Investment Research
Zacks estimates call for Builders First Source’s 2021 revenue to soar 130% from $8.6 billion to $19.6 billion. This would come on top of last year’s 18% sales growth. Meanwhile, its adjusted FY21 earnings are projected to skyrocket 208% to $9.26 a share.
Clearly, 2021 would be nearly impossible to follow up and our current estimates call for a pullback on both the top and bottom lines. But BLDR has crushed our EPS estimates by a 71% average in the trailing four periods and its FY22 and FY23 estimates have continued to trend higher. And its positive bottom-line revisions help it land a Zacks Rank #1 (Strong Buy) right now, alongside its “A” grade for Growth and “B” for Value in our Style Scores system.
Builder First Source’s results are due out on March 1 and the stock popped 2% on Wednesday to close regular hours at $71.48 a share. BLDR shares have bounced back recently and are up 67% in the past year to crush its industry’s 25%. The stock has also soared 475% in the last five years vs. its industry’s 150% and the S&P 500’s 100%. Despite the overall strength, the stock is trading 17% below its highs and 30% under its current Zacks consensus price target of $92.2 a share.
Even though it’s crushed its peers and the market and is on a huge run, BLDR trades at a 12% discount to its own five-year median, 52% below its highs, and offers great value against its industry at 10.2X forward 12-month earnings. Builder First Source also boasts a solid balance sheet and it upped its stock buyback program by $1 billion in November. Plus, 10 out of 11 brokerage recommendations Zacks has are “Strong Buys,” with the other at a “Buy.”
Micron is one of the largest makers of memory chips in the world. The company makes DRAM chips, which are featured within PCs and beyond, while NAND, or flash memory, is made for storing data and can be found in mobile phones and other devices. The memory space has been historically even more cyclical compared to the broader chip market and heavily impacted by pricing. Luckily, Micron is becoming less cyclical as it benefits from exposure in areas such as connected vehicles and all-important data centers.
Micron fiscal 2021 sales surged 29% and its adjusted earnings skyrocketed 115%. In late December, MU posted 33% Q1 FY22 revenue growth. The company also provide upbeat guidance amid the global chip shortage that helped the stock surge. CEO Sanjay Mehrotra remains confident in its outlook and MU’s ability to grow market share and benefit over the long-run through expansion in secular growth areas of technology, including 5G, AI, data centers, EVs, and more.
Looking ahead, the memory chip maker’s fiscal 2022 revenue is projected to climb 16% to reach $32 billion, with FY23 expected to surge another 15% to roughly $37 billion. At the bottom end, Micron’s adjusted earnings are projected to soar 47% on top of last year and 22% higher in 2023. The company’s FY22 and FY23 consensus earnings estimates have trended higher since its release and it has consistently topped our EPS estimates.
Image Source: Zacks Investment Research
Wall Street is largely high on the stock, with 15 of the 19 brokerage recommendations Zacks has at “Strong Buys.” MU stock is has climbed 260% in the last five years to outpace the broader Semiconductor market’s 200% climb. Better yet, it has skyrocketed 1,000% in the past decade to double its chip peers and destroy the Zacks Tech sector’s 300%.
More recently, the stock is up 7% in the last year, which once again tops tech overall. And Micron shares have jumped 20% in the past three months. MU popped 4.8% during regular trading Wednesday to close at $88 a share. Even with the climb, the stock is down 10% off its January records and it has 24% more room to run before it hit its current Zacks consensus price target of $109 a share.
Micron trades at discount to the larger chip segment due to memory’s standing in the space. Compared to itself, MU trades at a 50% discount to its year-long highs and right at its median of 8.7X forward 12-month earnings. Micron, which lands a Zacks Rank #3 (Hold), boasts an overall “A” VGM score and a strong balance sheet.
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2 Top Stocks to Buy Now and Hold for Years
The market posted its second-straight day of solid gains on Wednesday, as Wall Street continues to buy up beaten-down stocks. The recent rally has helped restart the recovery that was disrupted by massive drops from PayPal, Facebook/Meta, and a few other big-tech names last week.
The Nasdaq has now popped roughly 8% off its late January lows, while the S&P 500 is up nearly 6% since then. The benchmark index is approaching its 50-day moving average once again. The rebound comes even as the 10-year U.S. Treasury is on the brink of breaking above 2% for the first time since the summer of 2019. Wall Street is also waiting on January’s Consumer Price Index results that are due out Thursday morning.
Prices are not projected to come down and any surprise to the high-end could place more pressure on the Fed. That said, the recent market positivity might suggest that Wall Street has already priced in a fair amount of rate hikes in 2022.
It is hard to get a solid read on the market in the early days of 2022, amid rising inflation, supply chain setbacks, and the impending end of super-easy money. There could be another wave of selling and the market might simply be in for a choppier stretch following three years of huge returns.
This doesn’t mean investors should run away because staying constantly exposed to the market is a tried-and-true tactic to help long-term investors achieve success. We have already seen Wall Street buy some of the tech titans after they fell.
If Apple and other stable powers fall again, a similar pattern of buying great stocks at discounts will likely follow. On top of that, the two things that drive stocks prices over the long haul, earnings and interest rates, should support equities. The nearby chart shows the 10-year U.S. Treasury is still below its 10-year median and well off its highs—which are all extremely low historically.
Builders First Source (BLDR - Free Report)
Builders First Source manufactures everything from roof and floor trusses and stairs to vinyl windows, custom millwork, doors and nearly everything else in between. Along with various other products, Builders First Source offers design services, product installation, and turn-key framing. Overall, Builders First Source is one of the largest U.S suppliers of building products, prefabricated components, and services to the professional market for new residential construction and remodeling.
Builders First Source has steadily grown its revenue over the past decade, including multiple years of big double-digit expansion. The Dallas-based company operates in roughly 40 states, with a market presence in 47 of the top 50 and 84 of the top 100 metropolitan statistical areas. BLDR provides great exposure to various trends in housing and helps play the entire market instead of picking winners within the homebuilders.
Builders First Source has benefitted from the covid-boosted housing market. Some are rightfully worried about rising interest rates, but the market is finally being driven by millennials who are starting families a bit later in life. As we mentioned with the 10-year Treasury, 30-year mortgage rates are still very attractive compared to their pre-covid levels and even better historically.
Zacks estimates call for Builders First Source’s 2021 revenue to soar 130% from $8.6 billion to $19.6 billion. This would come on top of last year’s 18% sales growth. Meanwhile, its adjusted FY21 earnings are projected to skyrocket 208% to $9.26 a share.
Clearly, 2021 would be nearly impossible to follow up and our current estimates call for a pullback on both the top and bottom lines. But BLDR has crushed our EPS estimates by a 71% average in the trailing four periods and its FY22 and FY23 estimates have continued to trend higher. And its positive bottom-line revisions help it land a Zacks Rank #1 (Strong Buy) right now, alongside its “A” grade for Growth and “B” for Value in our Style Scores system.
Builder First Source’s results are due out on March 1 and the stock popped 2% on Wednesday to close regular hours at $71.48 a share. BLDR shares have bounced back recently and are up 67% in the past year to crush its industry’s 25%. The stock has also soared 475% in the last five years vs. its industry’s 150% and the S&P 500’s 100%. Despite the overall strength, the stock is trading 17% below its highs and 30% under its current Zacks consensus price target of $92.2 a share.
Even though it’s crushed its peers and the market and is on a huge run, BLDR trades at a 12% discount to its own five-year median, 52% below its highs, and offers great value against its industry at 10.2X forward 12-month earnings. Builder First Source also boasts a solid balance sheet and it upped its stock buyback program by $1 billion in November. Plus, 10 out of 11 brokerage recommendations Zacks has are “Strong Buys,” with the other at a “Buy.”
Micron Technology, Inc. (MU - Free Report)
Micron is one of the largest makers of memory chips in the world. The company makes DRAM chips, which are featured within PCs and beyond, while NAND, or flash memory, is made for storing data and can be found in mobile phones and other devices. The memory space has been historically even more cyclical compared to the broader chip market and heavily impacted by pricing. Luckily, Micron is becoming less cyclical as it benefits from exposure in areas such as connected vehicles and all-important data centers.
Micron fiscal 2021 sales surged 29% and its adjusted earnings skyrocketed 115%. In late December, MU posted 33% Q1 FY22 revenue growth. The company also provide upbeat guidance amid the global chip shortage that helped the stock surge. CEO Sanjay Mehrotra remains confident in its outlook and MU’s ability to grow market share and benefit over the long-run through expansion in secular growth areas of technology, including 5G, AI, data centers, EVs, and more.
Looking ahead, the memory chip maker’s fiscal 2022 revenue is projected to climb 16% to reach $32 billion, with FY23 expected to surge another 15% to roughly $37 billion. At the bottom end, Micron’s adjusted earnings are projected to soar 47% on top of last year and 22% higher in 2023. The company’s FY22 and FY23 consensus earnings estimates have trended higher since its release and it has consistently topped our EPS estimates.
Wall Street is largely high on the stock, with 15 of the 19 brokerage recommendations Zacks has at “Strong Buys.” MU stock is has climbed 260% in the last five years to outpace the broader Semiconductor market’s 200% climb. Better yet, it has skyrocketed 1,000% in the past decade to double its chip peers and destroy the Zacks Tech sector’s 300%.
More recently, the stock is up 7% in the last year, which once again tops tech overall. And Micron shares have jumped 20% in the past three months. MU popped 4.8% during regular trading Wednesday to close at $88 a share. Even with the climb, the stock is down 10% off its January records and it has 24% more room to run before it hit its current Zacks consensus price target of $109 a share.
Micron trades at discount to the larger chip segment due to memory’s standing in the space. Compared to itself, MU trades at a 50% discount to its year-long highs and right at its median of 8.7X forward 12-month earnings. Micron, which lands a Zacks Rank #3 (Hold), boasts an overall “A” VGM score and a strong balance sheet.