3 Zacks rank # 1 with rising price momentum
TThe market may have gotten a little choppy over the past couple of weeks, but that only gives investors a chance to catch their breath and prepare for the next rally. You don’t go through five straight weeks of record breaking advances in the average month of October just to hit a brick wall in two of the most positive months of the year (November and December).
Fortunately, we have a screen that can help you prepare for the next move higher. it’s called Zacks # 1 Trends on the rise, which looks for Zacks ranks 1 (strong buys) with rising price momentum and relative price strength beating the market. These stocks are also trading in the upper third of their 52-week price range… and still have a way to go.
Below are three names that were recently on the list, but be sure to check the screen daily for new stocks that meet the criteria.
Cost of Wholesale Costco
Being stuck at home during this pandemic has bolstered the benefits of buying wholesale, which has been a boon for leading warehouse club operator Costco Wholesale (COST). But even in more “normal” times, the efficiency and savings of shopping at a store like COST are evident. Why buy just a few bags of chips for the game when you can spend a little more and get 14 bags?
Oh, and if you need a 75-inch QLED TV and sectional sofa to watch the game, that can be arranged as well. COST can provide everything except the house itself, including large containers of headache pills and antacids for the next day.
Costco is one of the largest warehouse club operators in the country with nearly 570 stores here in the United States and dozens more around the world (820 warehouses in total). Shares have risen over 40% so far this year.
October sales results remained strong as net sales jumped 19.2% to $ 16.47 billion, beating the September impression by 15.8%. Same-store sales increased 17.5%, while e-commerce same-store sales accelerated 16.5% as part of the company’s omnichannel adoption.
COST has now beaten Zacks’ consensus estimate in four of the past five quarters. Earnings per share rose to $ 3.90 in the fiscal fourth quarter, eclipsing expectations by nearly 10%. Revenue jumped 17.4% to $ 62.7 billion, while same-store sales rose 15.5%. Importantly, same-store e-commerce sales increased 11.2%.
These good results are due to the company’s growth strategies, improved pricing management, member gains and e-commerce penetration. These same factors should keep COST in the right direction as life returns to some kind of new normal. As a result, analysts have raised expectations over the past two months.
Zacks’ consensus estimate for this fiscal year (ending August 2022) and the following fiscal year (ending August 2023) is now $ 12.15 and $ 13.30, respectively. Those results have each increased by around 5% in the past 60 days, but analysts are forecasting earnings growth of around 9.5% year-over-year.
Image source: Zacks Investment Research
AutoNation AN
When you mix growing consumer demand with disruptions to the manufacturing supply chain, you can do crazy things like set up six consecutive record quarters throughout an unprecedented pandemic. That’s what AutoNation (AN) did in its Q3 report, as people were looking for ways to travel safely and avoid this coughing guy on the bus.
AN is the country’s largest auto retailer with 315 new vehicle franchises in 230 stores (as of December 31, 2020). The company’s diverse product line and multiple revenue streams help reduce risk and drive more profit and sales growth.
Its activity has been divided into three operational sectors: Domestic (33% of turnover in 2020); Import (30.4%) and Premium Luxury (36.6%). As part of the Automotive – Retail & Whole Sales space, it is in the top 11% of the Zacks industry ranking. Shares have risen nearly 70% so far this year.
At the end of October, AN gained $ 5.12 per share in the third quarter, which exceeded our expectations by 17.7%. This has been 11 consecutive quarters of outperformance. Revenue of $ 6.4 billion jumped 18% year-over-year. The domestic segment grew by 33%, while imports grew by 63% and high-end luxury by 43%.
Historically low inventories of new vehicles and the shift to personal transportation are two factors that have contributed to this growth in the past and are expected to continue to do so in the future. As a result, earnings estimates for this and next year have improved significantly over the past 60 days.
Zacks’ consensus estimate for this year is now $ 17.17, which has jumped 12% during that time. Expectations for next year currently suggest a year-over-year decline to $ 17.12, but that estimate has jumped 27% in the past two months… and 2022 hasn’t even started yet.
Image source: Zacks Investment Research
Max Linear MXL
Now what kind of “uptrends†article would it be without taking a flea look? There are several different industries to choose from that are doing well in this time of high demand and low supply. Let’s take a look at semiconductors – analog and mixed since they are in the Top 10% of the Zacks industry rankings.
MaxLinear (MXL) is one of only two names in this region with a Zacks Rank # 1 (Strong Buy). The company is a leading supplier of RF, analog, digital and mixed signal integrated circuits. Its current products enable the display of broadband video in a wide range of electronic devices, including cable and landline set-top boxes, digital televisions, mobile handsets, personal computers, netbooks and in-car entertainment devices.
MXL shares have jumped over 83% so far this year after beating Zacks’ consensus estimate for six consecutive quarters. Most recently, it reported third quarter earnings per share of 75 cents, beating Zacks’ consensus estimate by 10.3%.
Revenue of $ 229.8 million marked an impressive 47% year-over-year improvement while beating Zacks’ consensus estimate by 1%. The company benefited from strong demand for its high-performance broadband and analog access and connectivity products.
The company admirably manages the constraints of the global supply chain that impact the entire economy. Analysts like what the future of MXL looks like, so they have upped their estimates over the past two months.
Zacks’ consensus estimate for this year is $ 2.68, which is a 13% lead in 60 days. Next year is now at $ 3.15, more than 14% better within the allotted time. More importantly, analysts expect a 17.5% year-over-year improvement.
Image source: Zacks Investment Research
More information on stocks: it’s bigger than the iPhone!
She could become the mother of all technological revolutions. Apple has only sold one billion iPhones in 10 years, but a new breakthrough is expected to generate over 77 billion devices by 2025, creating a market of $ 1.3 trillion.
Zacks has just published a special report that highlights this rapidly emerging phenomenon and 4 tickers to take advantage of it. If you don’t buy now, you could get started in 2022.
Click here for the 4 professions >>
AutoNation, Inc. (AN): Free Stock Analysis Report
Costco Wholesale Corporation (COST): Free Inventory Analysis Report
MaxLinear, Inc (MXL): Free Stock Analysis Report
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