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Zacks.com featured highlights Abercrombie & Fitch, Puma Biotechnology, Spotify and Oddity
Read MoreHide Full Article
For Immediate Release
Chicago, IL – August 2, 2024 – Stocks in this week’s article are Abercrombie & Fitch Co. (ANF - Free Report) , Puma Biotechnology, Inc. (PBYI - Free Report) , Spotify Technology S.A. (SPOT - Free Report) and Oddity Tech Ltd. (ODD - Free Report) .
Bet on These 4 Top-Performing Liquid Stocks for Solid Gains
Liquidity indicates a company's capability to meet debt obligations by converting its assets into liquid cash and equivalents.
A company with adequate liquidity always has the potential to deliver higher returns, as stable financial resources can drive business growth.
However, one should be careful about investing in a stock with a high liquidity level. High liquidity may also indicate that the company cannot utilize assets competently.
Besides sufficient cash in hand, an investor might also consider a company's capital deployment abilities before investing in the stock. A healthy company with favorable liquidity may prove to be a profitable pick.
Measures to Identify Liquid Stocks
Current Ratio: It measures current assets relative to current liabilities. The ratio gauges a company's potential to meet short- and long-term debt obligations. A current ratio — the working capital ratio — below 1 indicates that the company has more liabilities than assets. A high current ratio does not always suggest that the company is in good financial shape. It may also indicate that the firm failed to utilize its assets significantly. Hence, a range of 1-3 is considered ideal.
Quick Ratio: Unlike the current ratio, the quick ratio — the 'acid-test ratio' or 'quick assets ratio' — indicates a company's ability to pay short-term obligations. It considers inventory, excluding current assets relative to current liabilities. A quick ratio of more than 1 is desirable, like the current ratio.
Cash Ratio: This is the most conservative ratio among the three, considering cash and cash equivalents and invested funds relative to current liabilities. It measures a company's ability to meet existing debt obligations using the most liquid assets. Though a cash ratio of more than 1 may suggest sound financials, a higher number may indicate inefficiency in cash utilization.
A ratio greater than 1 is always desirable but may not always represent a company's financial condition.
Here are four stocks out of the six that qualified for the screen:
Abercrombie & Fitch Co. is a specialty retailer of premium, high-quality casual apparel for men, women and kids. It has a vast 759-store network across North America, Europe, Asia and the Middle East. It operates a few e-commerce sites, including www.abercrombie.com, www.abercrombiekids.com, www.hollisterco.com and www.gillyhicks.com.
ANF is gaining from continued momentum across its brands — Hollister and Abercrombie. In first-quarter fiscal 2024, net sales increased 12% year over year at Hollister and 31% at Abercrombie. It is also focused on making strategic investments across stores, digital and technology to bolster itself long-term. Management anticipates fiscal 2024 net sales to increase 10% year over year from $4.3 billion. For second-quarter fiscal 2024, net sales are projected to be up in the mid-teens from $935 million reported in the year-ago period.
However, ANF has been witnessing elevated operating costs on higher technology expenses and incentive-based compensation. Also, inflationary pressures are a concern. The Zacks Consensus Estimate for its fiscal 2024 earnings is pegged at $9.35 per share, unchanged in the past seven days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 210.3%, on average.
Puma Biotechnology, Inc. is a small cancer biotech whose only marketed product, Nerlynx (neratinib), is approved for treating early-stage HER2-positive breast cancer in patients who have been previously treated with Roche's Herceptin-based adjuvant therapy. Nerlynx, in combination with Roche's Xeloda, was approved by the Food and Drug Administration (FDA) for third-line HER2-positive metastatic breast cancer in February 2020. Puma Biotechnology also received additional approvals for using Nerlynx in the extended adjuvant population.
PBYI's only marketed breast cancer drug, Nerlynx, is generating the majority of the revenues in the United States. The company's in-licensed clinical-stage candidate, alisertib, holds promise. Ongoing studies on alisertib targeting breast and small-cell lung cancers are progressing well. The successful development of this candidate will significantly boost its position in the anti-cancer drug market and should lower dependance on Nerlynx for revenues.
However, the company's performance is heavily dependent on Nerlynx sales. Sales of the drug have been declining in recent quarters. Also, SUMMIT study discontinuation on Nerlynx in 2022 was a huge setback.
The Zacks Consensus Estimate for PBYI's 2024 bottom line is pegged at earnings of 43 cents per share, suggesting an improvement of 7.5% in the past 60 days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 27.2%, on average.
Spotify Technology S.A. provides music streaming services. In the last reported quarter, revenues improved 20% year over year while total monthly active users increased 14%. Premium subscriptions registered 12% year-over-year growth.
Management also highlighted its efforts at expanding the business. The company expanded its video podcast catalog to more than 250,000 shows. It also unveiled a basic plan for eligible users in Australia, the United Kingdom and the United States to avail the option for ad-free music listening without audiobook listening time.
The Zacks Consensus Estimate for its 2024 earnings is pegged at $6.32 per share, moving north by 28.2% in the past 60 days. SPOT has a Growth Score of A. The stock has surged 134.8% in the past year.
Oddity Tech Ltd. operates as a consumer tech-focused company and is headquartered in New York City. It helps to build digital-first brands to take on the offline beauty and wellness industries. ODD's AI-powered online platform utilizes data science to identify consumer requirements (in terms of beauty and wellness products) and develop new solutions. The company has 50 million users.
Steady momentum across both IL MAKIAGE and SpoiledChild brands is driving top-line expansion. In the last reported quarter, net revenues of $212 million increased 28% year over year. ODD expects net revenues to be between $626 million and $635 million for 2024.
The Zacks Consensus Estimate for ODD's 2024 bottom line is pegged at earnings of $1.66 per share, suggesting an improvement from earnings of $1.31 reported in the previous year. The company has a Growth Score of A and a trailing four-quarter earnings surprise of 35.4%, on average.
Get the remaining stocks on the list and start testing this and other ideas. It can all be done with the Research Wizard stock picking and back-testing software.
The Research Wizard is a great place to begin and easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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.
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Zacks.com featured highlights Abercrombie & Fitch, Puma Biotechnology, Spotify and Oddity
For Immediate Release
Chicago, IL – August 2, 2024 – Stocks in this week’s article are Abercrombie & Fitch Co. (ANF - Free Report) , Puma Biotechnology, Inc. (PBYI - Free Report) , Spotify Technology S.A. (SPOT - Free Report) and Oddity Tech Ltd. (ODD - Free Report) .
Bet on These 4 Top-Performing Liquid Stocks for Solid Gains
Liquidity indicates a company's capability to meet debt obligations by converting its assets into liquid cash and equivalents.
A company with adequate liquidity always has the potential to deliver higher returns, as stable financial resources can drive business growth.
However, one should be careful about investing in a stock with a high liquidity level. High liquidity may also indicate that the company cannot utilize assets competently.
Besides sufficient cash in hand, an investor might also consider a company's capital deployment abilities before investing in the stock. A healthy company with favorable liquidity may prove to be a profitable pick.
Measures to Identify Liquid Stocks
Current Ratio: It measures current assets relative to current liabilities. The ratio gauges a company's potential to meet short- and long-term debt obligations. A current ratio — the working capital ratio — below 1 indicates that the company has more liabilities than assets. A high current ratio does not always suggest that the company is in good financial shape. It may also indicate that the firm failed to utilize its assets significantly. Hence, a range of 1-3 is considered ideal.
Quick Ratio: Unlike the current ratio, the quick ratio — the 'acid-test ratio' or 'quick assets ratio' — indicates a company's ability to pay short-term obligations. It considers inventory, excluding current assets relative to current liabilities. A quick ratio of more than 1 is desirable, like the current ratio.
Cash Ratio: This is the most conservative ratio among the three, considering cash and cash equivalents and invested funds relative to current liabilities. It measures a company's ability to meet existing debt obligations using the most liquid assets. Though a cash ratio of more than 1 may suggest sound financials, a higher number may indicate inefficiency in cash utilization.
A ratio greater than 1 is always desirable but may not always represent a company's financial condition.
Here are four stocks out of the six that qualified for the screen:
Abercrombie & Fitch Co. is a specialty retailer of premium, high-quality casual apparel for men, women and kids. It has a vast 759-store network across North America, Europe, Asia and the Middle East. It operates a few e-commerce sites, including www.abercrombie.com, www.abercrombiekids.com, www.hollisterco.com and www.gillyhicks.com.
ANF is gaining from continued momentum across its brands — Hollister and Abercrombie. In first-quarter fiscal 2024, net sales increased 12% year over year at Hollister and 31% at Abercrombie. It is also focused on making strategic investments across stores, digital and technology to bolster itself long-term. Management anticipates fiscal 2024 net sales to increase 10% year over year from $4.3 billion. For second-quarter fiscal 2024, net sales are projected to be up in the mid-teens from $935 million reported in the year-ago period.
However, ANF has been witnessing elevated operating costs on higher technology expenses and incentive-based compensation. Also, inflationary pressures are a concern. The Zacks Consensus Estimate for its fiscal 2024 earnings is pegged at $9.35 per share, unchanged in the past seven days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 210.3%, on average.
Puma Biotechnology, Inc. is a small cancer biotech whose only marketed product, Nerlynx (neratinib), is approved for treating early-stage HER2-positive breast cancer in patients who have been previously treated with Roche's Herceptin-based adjuvant therapy. Nerlynx, in combination with Roche's Xeloda, was approved by the Food and Drug Administration (FDA) for third-line HER2-positive metastatic breast cancer in February 2020. Puma Biotechnology also received additional approvals for using Nerlynx in the extended adjuvant population.
PBYI's only marketed breast cancer drug, Nerlynx, is generating the majority of the revenues in the United States. The company's in-licensed clinical-stage candidate, alisertib, holds promise. Ongoing studies on alisertib targeting breast and small-cell lung cancers are progressing well. The successful development of this candidate will significantly boost its position in the anti-cancer drug market and should lower dependance on Nerlynx for revenues.
However, the company's performance is heavily dependent on Nerlynx sales. Sales of the drug have been declining in recent quarters. Also, SUMMIT study discontinuation on Nerlynx in 2022 was a huge setback.
The Zacks Consensus Estimate for PBYI's 2024 bottom line is pegged at earnings of 43 cents per share, suggesting an improvement of 7.5% in the past 60 days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 27.2%, on average.
Spotify Technology S.A. provides music streaming services. In the last reported quarter, revenues improved 20% year over year while total monthly active users increased 14%. Premium subscriptions registered 12% year-over-year growth.
Management also highlighted its efforts at expanding the business. The company expanded its video podcast catalog to more than 250,000 shows. It also unveiled a basic plan for eligible users in Australia, the United Kingdom and the United States to avail the option for ad-free music listening without audiobook listening time.
The Zacks Consensus Estimate for its 2024 earnings is pegged at $6.32 per share, moving north by 28.2% in the past 60 days. SPOT has a Growth Score of A. The stock has surged 134.8% in the past year.
Oddity Tech Ltd. operates as a consumer tech-focused company and is headquartered in New York City. It helps to build digital-first brands to take on the offline beauty and wellness industries. ODD's AI-powered online platform utilizes data science to identify consumer requirements (in terms of beauty and wellness products) and develop new solutions. The company has 50 million users.
Steady momentum across both IL MAKIAGE and SpoiledChild brands is driving top-line expansion. In the last reported quarter, net revenues of $212 million increased 28% year over year. ODD expects net revenues to be between $626 million and $635 million for 2024.
The Zacks Consensus Estimate for ODD's 2024 bottom line is pegged at earnings of $1.66 per share, suggesting an improvement from earnings of $1.31 reported in the previous year. The company has a Growth Score of A and a trailing four-quarter earnings surprise of 35.4%, on average.
Get the remaining stocks on the list and start testing this and other ideas. It can all be done with the Research Wizard stock picking and back-testing software.
The Research Wizard is a great place to begin and easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in and see what gems come out.
Click here to sign up for a free trial of the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2313900/bet-on-these-4-top-performing-liquid-stocks-for-solid-gains
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Follow us on Twitter: https://www.twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
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.