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 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.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
