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Money Lion and United Parcel Service have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – August 8, 2024 – Zacks Equity Research shares Money Lion (ML - Free Report) as the Bull of the Day and United Parcel Service UPS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Disney (DIS - Free Report) and Shopify (SHOP - Free Report) .
Make no mistake, it’s rough out there kids. The stock market is having itself a rough go of it lately. Ever since that carry trade started to unwind in the “Land of the Rising Sun” things just haven’t been the same. It can feel like the whole world is collapsing down on you. Some look at that with despair. In reality, you should be looking at it as the opportunity that it is. The opportunity to add some great stocks on the cheap.
Great stocks like today’s Bull of the Day, Zacks Rank #1 (Strong Buy) Money Lion. Money Lion is in the Financial Transaction Services industry which ranks in the Top 32% of our Zacks Industry Rank. a financial technology company, provides personalized products and financial content for American consumers. The company's platform offers access to banking, borrowing, and investing solutions for customers. It’s similar to a company like SoFi, at a fraction of the market cap.
The company just reported EPS of 26 cents last quarter, when analysts were calling for a 1-cent loss. Normally, that sort of surprise profitability is a good thing. In this case, the stock continued its dramatic selloff, down from heights around $100 just a few short months ago.
The growth numbers are staggering on this name. Current year revenue growth calls for 23.94% growth this year and 21.32% next year. That translates to 131% EPS growth this year and 280% growth next year. Next year’s Zacks Consensus Estimate is now forecast to come in at $5.51. That’s a big number for a stock with that much growth that is currently trading in the mid $40s.
A quick look at the Price, Consensus and EPS Surprise Chart shows the divergence between the stock’s price and earnings. While earnings estimate revisions have continued to push to the upside, the stock is well off its highs. Eventually, one of two things typically happen. Either the stock’s price rallies to keep up with the revisions, or revisions come crashing down. With earnings beats and analysts upping the ante, the divergence has continued for several quarters now.
In every market, there are winners and there are losers. When the stock market is retreating the way it has since the start of the month, it can feel like the losers are over-powering everything. You shouldn’t be discouraged by this. In actuality, it’s typically a great time to add to your positions. Just do go out there and add blindly. Look for stocks with strong earnings trends to add, and maybe avoid those where earnings are moving in the wrong direction, to the downside.
One stock that’s seen its recent earnings move in the wrong direction is today’s Bear of the Day. I’m talking about Zacks Rank #5 (Strong Sell) United Parcel Service. I’m sure you’ve all not only heard of the company, but likely use the service nearly every day. UPS is the brown-clad delivery service you see moving around every town in America.
UPS is in the Transportation – Air Freight and Cargo industry which ranks in the Bottom 12% of our Zacks Industry Rank. The reason for the unfavorable ranks is that over the last 30 days, no fewer than 8 analysts have cut their estimates for the current year while seven have followed suit for next year. The bearish moves have cut the Zacks Consensus Estimate for the current year from $8.22 to $7.64 while next year’s number is off from $9.58 to $9.03.
There are currently no stocks within this industry which are in the good graces of our Zacks Rank. However, there are a couple of Zacks Rank #3 (Hold) stocks within the industry to note. These include Zacks Rank #3 (Hold) FedEx (FDX ) and GXO Logistics (GXO - Free Report) .
Additional content:
Markets Stage Comeback with Second Rally Attempt Underway: Stocks to Watch
Stocks appear to be staging a reversal on Wednesday, reclaiming more ground after Tuesday’s first rally attempt. The gains come on the heels of a three-day rout that took out a substantial portion of this year’s market gains.
A sharp rise in the Japanese Yen against the US dollar ignited an unwinding of what’s referred to as a “carry trade,” whereby speculators who borrowed money at Japan’s near-zero interest rates to buy US risk assets rushed to liquidate their holdings.
In the years leading up to the 2008 financial crisis, there was a lot of money tied up in Yen carry trades. The bigger issue was that a lot of that money was invested in risky assets such as subprime mortgages. One of the outcomes from the Great Recession were tighter risk controls, preventing excessive levels taken by institutions.
The Bank of Japan alleviated concerns yesterday, as Deputy Governor Shinichi Uchida pledged to refrain from hiking rates further if markets are unstable.
Volatility Index Retreats from Multi-Year High
At the height of the recent selling, volatility rose to levels not seen in multiple years. The volatility (VIX) index hit an intraday high on Monday of 65.7; the last time we saw the VIX at this level was during the initial COVID-19 scare in early 2020.
The VIX closed Tuesday at 27.71, a drop of more than 50% from Monday’s intraday peak. Based on Monday’s closing price, the VIX fell 41% from its high (65.73) to its close (38.57), which marked the largest percentage move lower in a single day.
In early trading on Wednesday, the “fear gauge” was down another 18% to 22.75. During bull markets, spikes in the VIX have represented good buying opportunities. The steep decline could be a sign that the worst of this correction is behind us, but we need to embrace the inherent unpredictability of the stock market.
This speaks to the notion of not getting stuck on a story or idea of what we think will happen. It’s important to remember that we don’t know what’s going to happen; when we truly embrace this, we allow ourselves to take advantage of timely opportunities.
Rate-Cut Odds Shift Following Market Sell-Off
Earlier in the week, Chicago Fed President Austan Goolsbee stated that central bank policymakers will respond to any weakness in the economy, indicating that rates may be too restrictive. He stressed Fed mandates including maximizing employment, stabilizing prices, and maintaining financial stability.
“If the conditions collectively start coming in like that on the through line, if there’s deterioration on any of those parts, we’re going to fix it.”
Calls for an emergency Fed cut were abundant on Monday given the global selloff in stocks. Market participants are now pricing in three rate cuts by the end of the year.
The first cut is all but assured at the Fed’s next policy meeting in September, with current odds standing at 100%. Furthermore, odds of a 50-basis point cut next month jumped to 64%.
Second-Quarter Earnings Season Still Alive and Well
We remain in the midst of the Q2 earnings season. While it’s certainly quieter than last week, there were a handful of significant announcements Wednesday morning.
Media giant Disney reported third-quarter fiscal adjusted earnings of $1.39/share, which beat the Zacks Consensus Estimate by 15.8%. The bottom line surged 35% year-over-year. Revenues of $23.15 billion also beat the consensus mark and increased 3.7% from the prior-year period.
Shares of The Walt Disney Company were trading about 3% lower after issuing mixed guidance and calling out a late quarter slowdown in the theme park business. Management believes a hesitant consumer will persist for the next few quarters.
Meanwhile, Shopify stock soared more than 20% on Wednesday after the cloud-based commerce platform provider delivered a beat-and-raise report. Second-quarter earnings of $0.26/share marked a 30% beat versus the $0.20/share estimate and jumped 114.3% versus the year-ago period. Revenues of $2.05 billion rose 21% and were ahead of the $2.01 billion median projection.
The Canadian e-commerce site, which assists businesses in selling products and services, has been taking advantage of the artificial intelligence theme by rolling out related features. The company forecasted Q3 revenues well above analysts’ estimates, signaling confidence in the current operating environment.
Final Thoughts
Volatility remains elevated, but we are beginning to see some evidence of buying pressure at these levels. It’s not a time to get too aggressive in terms of new trade initiations, but investors may want to consider nibbling at rate-sensitive areas like small-caps.
Following a rough start to the month of August, market participants will remain focused on earnings results as well as next week’s inflation reports. Make sure you’re taking advantage of all that Zacks has to offer as we head deeper into the second half of the year.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
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/performance for information about the performance numbers displayed in this press release.
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Money Lion and United Parcel Service have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – August 8, 2024 – Zacks Equity Research shares Money Lion (ML - Free Report) as the Bull of the Day and United Parcel Service UPS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Disney (DIS - Free Report) and Shopify (SHOP - Free Report) .
Here is a synopsis of all four stocks:
Bull of the Day:
Make no mistake, it’s rough out there kids. The stock market is having itself a rough go of it lately. Ever since that carry trade started to unwind in the “Land of the Rising Sun” things just haven’t been the same. It can feel like the whole world is collapsing down on you. Some look at that with despair. In reality, you should be looking at it as the opportunity that it is. The opportunity to add some great stocks on the cheap.
Great stocks like today’s Bull of the Day, Zacks Rank #1 (Strong Buy) Money Lion. Money Lion is in the Financial Transaction Services industry which ranks in the Top 32% of our Zacks Industry Rank. a financial technology company, provides personalized products and financial content for American consumers. The company's platform offers access to banking, borrowing, and investing solutions for customers. It’s similar to a company like SoFi, at a fraction of the market cap.
The company just reported EPS of 26 cents last quarter, when analysts were calling for a 1-cent loss. Normally, that sort of surprise profitability is a good thing. In this case, the stock continued its dramatic selloff, down from heights around $100 just a few short months ago.
The growth numbers are staggering on this name. Current year revenue growth calls for 23.94% growth this year and 21.32% next year. That translates to 131% EPS growth this year and 280% growth next year. Next year’s Zacks Consensus Estimate is now forecast to come in at $5.51. That’s a big number for a stock with that much growth that is currently trading in the mid $40s.
A quick look at the Price, Consensus and EPS Surprise Chart shows the divergence between the stock’s price and earnings. While earnings estimate revisions have continued to push to the upside, the stock is well off its highs. Eventually, one of two things typically happen. Either the stock’s price rallies to keep up with the revisions, or revisions come crashing down. With earnings beats and analysts upping the ante, the divergence has continued for several quarters now.
Bear of the Day:
In every market, there are winners and there are losers. When the stock market is retreating the way it has since the start of the month, it can feel like the losers are over-powering everything. You shouldn’t be discouraged by this. In actuality, it’s typically a great time to add to your positions. Just do go out there and add blindly. Look for stocks with strong earnings trends to add, and maybe avoid those where earnings are moving in the wrong direction, to the downside.
One stock that’s seen its recent earnings move in the wrong direction is today’s Bear of the Day. I’m talking about Zacks Rank #5 (Strong Sell) United Parcel Service. I’m sure you’ve all not only heard of the company, but likely use the service nearly every day. UPS is the brown-clad delivery service you see moving around every town in America.
UPS is in the Transportation – Air Freight and Cargo industry which ranks in the Bottom 12% of our Zacks Industry Rank. The reason for the unfavorable ranks is that over the last 30 days, no fewer than 8 analysts have cut their estimates for the current year while seven have followed suit for next year. The bearish moves have cut the Zacks Consensus Estimate for the current year from $8.22 to $7.64 while next year’s number is off from $9.58 to $9.03.
There are currently no stocks within this industry which are in the good graces of our Zacks Rank. However, there are a couple of Zacks Rank #3 (Hold) stocks within the industry to note. These include Zacks Rank #3 (Hold) FedEx (FDX ) and GXO Logistics (GXO - Free Report) .
Additional content:
Markets Stage Comeback with Second Rally Attempt Underway: Stocks to Watch
Stocks appear to be staging a reversal on Wednesday, reclaiming more ground after Tuesday’s first rally attempt. The gains come on the heels of a three-day rout that took out a substantial portion of this year’s market gains.
A sharp rise in the Japanese Yen against the US dollar ignited an unwinding of what’s referred to as a “carry trade,” whereby speculators who borrowed money at Japan’s near-zero interest rates to buy US risk assets rushed to liquidate their holdings.
In the years leading up to the 2008 financial crisis, there was a lot of money tied up in Yen carry trades. The bigger issue was that a lot of that money was invested in risky assets such as subprime mortgages. One of the outcomes from the Great Recession were tighter risk controls, preventing excessive levels taken by institutions.
The Bank of Japan alleviated concerns yesterday, as Deputy Governor Shinichi Uchida pledged to refrain from hiking rates further if markets are unstable.
Volatility Index Retreats from Multi-Year High
At the height of the recent selling, volatility rose to levels not seen in multiple years. The volatility (VIX) index hit an intraday high on Monday of 65.7; the last time we saw the VIX at this level was during the initial COVID-19 scare in early 2020.
The VIX closed Tuesday at 27.71, a drop of more than 50% from Monday’s intraday peak. Based on Monday’s closing price, the VIX fell 41% from its high (65.73) to its close (38.57), which marked the largest percentage move lower in a single day.
In early trading on Wednesday, the “fear gauge” was down another 18% to 22.75. During bull markets, spikes in the VIX have represented good buying opportunities. The steep decline could be a sign that the worst of this correction is behind us, but we need to embrace the inherent unpredictability of the stock market.
This speaks to the notion of not getting stuck on a story or idea of what we think will happen. It’s important to remember that we don’t know what’s going to happen; when we truly embrace this, we allow ourselves to take advantage of timely opportunities.
Rate-Cut Odds Shift Following Market Sell-Off
Earlier in the week, Chicago Fed President Austan Goolsbee stated that central bank policymakers will respond to any weakness in the economy, indicating that rates may be too restrictive. He stressed Fed mandates including maximizing employment, stabilizing prices, and maintaining financial stability.
“If the conditions collectively start coming in like that on the through line, if there’s deterioration on any of those parts, we’re going to fix it.”
Calls for an emergency Fed cut were abundant on Monday given the global selloff in stocks. Market participants are now pricing in three rate cuts by the end of the year.
The first cut is all but assured at the Fed’s next policy meeting in September, with current odds standing at 100%. Furthermore, odds of a 50-basis point cut next month jumped to 64%.
Second-Quarter Earnings Season Still Alive and Well
We remain in the midst of the Q2 earnings season. While it’s certainly quieter than last week, there were a handful of significant announcements Wednesday morning.
Media giant Disney reported third-quarter fiscal adjusted earnings of $1.39/share, which beat the Zacks Consensus Estimate by 15.8%. The bottom line surged 35% year-over-year. Revenues of $23.15 billion also beat the consensus mark and increased 3.7% from the prior-year period.
Shares of The Walt Disney Company were trading about 3% lower after issuing mixed guidance and calling out a late quarter slowdown in the theme park business. Management believes a hesitant consumer will persist for the next few quarters.
Meanwhile, Shopify stock soared more than 20% on Wednesday after the cloud-based commerce platform provider delivered a beat-and-raise report. Second-quarter earnings of $0.26/share marked a 30% beat versus the $0.20/share estimate and jumped 114.3% versus the year-ago period. Revenues of $2.05 billion rose 21% and were ahead of the $2.01 billion median projection.
The Canadian e-commerce site, which assists businesses in selling products and services, has been taking advantage of the artificial intelligence theme by rolling out related features. The company forecasted Q3 revenues well above analysts’ estimates, signaling confidence in the current operating environment.
Final Thoughts
Volatility remains elevated, but we are beginning to see some evidence of buying pressure at these levels. It’s not a time to get too aggressive in terms of new trade initiations, but investors may want to consider nibbling at rate-sensitive areas like small-caps.
Following a rough start to the month of August, market participants will remain focused on earnings results as well as next week’s inflation reports. Make sure you’re taking advantage of all that Zacks has to offer as we head deeper into the second half of the year.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
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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/performance for information about the performance numbers displayed in this press release.