Chicago, IL – February 7, 2024 – Today, Zacks Investment Ideas feature highlights Vertiv VRT, CrowdStrike CRWD, and Arista Networks ANET.
3 Buy-Rated Stocks Outperforming the Magnificent 7
The Magnificent 7 (Apple, Meta Platforms, Alphabet, Microsoft, Tesla, NVIDIA, and Amazon) group has been the dominant story of the market for some time now, performing remarkably and providing stellar gains. They’ve led the market, with recent quarterly results from a few members adding further excitement and extending the positive price action.
Thanks to their dominant market stance, outperforming the group has been nearly impossible. However, that certainly hasn’t been the case for all, including Vertiv, CrowdStrike, and Arista Networks.
All three stocks have outperformed the Magnificent 7 as a group over the last year.
In addition, all three sport a favorable Zacks Rank, reflecting upward trending earnings estimate revisions. For those seeking to outperform the market titans, let’s take a closer look at each.
Arista Networks
Arista Networks, a Zacks Rank #1 (Strong Buy), is an industry leader in data-driven, client-to-cloud networking for large data centers, campus, and routing environments. The revisions trend has been particularly bullish for its current fiscal year outlook, up 13% to $6.55 per share over the last year.
The company’s quarterly consistency can’t be overlooked, exceeding both top and bottom line consensus expectations in each of its last ten releases. The company’s top line has enjoyed significant expansion over the last few quarters thanks to customer momentum in both enterprise and cloud/AI sectors.
Keep an eye out for the company’s next quarterly release scheduled for February 12th, as current consensus expectations currently suggest 21% earnings growth on 20% higher sales. Analysts have taken their bottom line expectations modestly higher since last November.
CrowdStrike
CrowdStrike, a current Zacks Rank #1 (Strong Buy), is a leader in next-generation endpoint protection, threat intelligence, and cyberattack response services. Like ANET, the revisions trend for CrowdStrike’s current fiscal year has been robust, up 46% to $2.95 per share over the last year.
The stock remains a prime consideration for growth investors, currently carrying a Style Score of ‘A’ for Growth. Consensus expectations for its current fiscal year suggest 90% earnings growth paired with a sizable 36% revenue climb.
CrowdStrike’s latest set of quarterly results had shares moving higher post-earnings, with the company delivering record profitability and record free cash flow. Annual recurring revenue also showed considerable growth, improving 35% year-over-year.
Shares have jumped higher post-earnings in back-to-back releases.
Vertiv
Vertiv, a current Zacks Rank #2 (Buy), is a global leader in designing, building, and servicing critical infrastructure that enables vital applications for data centers. The company is the only pure-play data center infrastructure provider able to deliver across the entire spectrum of thermal and power technologies.
Shares aren’t valuation stretched given the company’s forecasted growth, with shares currently trading at a 27.1X forward earnings multiple (F1). Consensus expectations for its current year allude to a 220% pop in earnings on 21% higher sales.
The company’s top line expansion has already been impressive, posting double-digit percentage year-over-year revenue growth rates in six consecutive quarterly releases.
Vertiv will deliver its next set of quarterly results on February 21st. Current consensus expectations suggest 90% earnings growth and 14% expansion across the top line. Shares have moved higher post-earnings in three consecutive releases.
Bottom Line
While most market headlines are centered around the Magnificent 7 group, investors may be surprised to learn that there have been other stocks delivering even stronger gains.
All three stocks above have precisely done that, delivering ‘Mag 7-beating’ gains over the last year.
In addition, all three sport favorable Zacks Ranks, with upwards trending earnings estimate revisions helping drive the moves.
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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.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.
“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.
Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.
But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.
Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.
“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.
“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.
A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.
It would also be “counter to what they’ve signaled,” he said.
More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.
“That’s going to be more important than the size of the cut itself,” he said.
In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.
“Here, the labour situation is worse than what we see in the United States,” he said.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
