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Beat the Market Like Zacks: Hargreaves Lansdown (HRGLY), Starbucks (SBUX), Johnson & Johnson (JNJ) in Focus

Abhinab Dasgupta
·5-min read

The three most widely followed indexes closed the last week in the red. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq dropped 4.1%, 4.8% and 5.5%, respectively, for the week. For the S&P 500 and the tech-heavy Nasdaq, these were the worst weekly percentage drops since June.

Investors remained apprehensive about a minimum 75 bps interest rate hike in the Fed’s meeting this week, following a hotter-than-expected inflation reading for August.

Also, comments from the upper echelons of the World Bank and IMF, indicating an impending global economic slowdown, weighed on the market.

Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.

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Zacks Research guided investors last week with its time-tested methodologies as usual. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.

Here are some of our key achievements from last week:

City Holding, First Financial Rise Following Zacks Rank Upgrade

Shares of City Holding Company CHCO have gained 2.7% since it was upgraded to a Zacks Rank #1 (Strong Buy) on September 14. The rating upgrade was primarily driven by an upward trend in earnings estimates, one of the most powerful forces impacting stock prices. A company's changing earnings picture is at the core of the Zacks rating.

For CHCO, the consensus EPS estimate of $6.42 for the current year has increased 15.9% over the past two months.

Rising earnings estimates and the consequent Zacks Rank upgrade for CHCO imply an improvement in the company's underlying business. Investors have started showing appreciation for this improving business trend by pushing the stock higher.

Check City Holdings’ historical EPS and Sales here>>>

First Financial Bancorp. FFBC, another stock upgraded to a Zacks Rank #1 on September 15, has returned nearly 2% over the past two trading days. An 8.8% increase in the current-year consensus EPS estimate over the past two months triggered the rating upgrade.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +24.8% since 1988.You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>

Check First Financial’s historical EPS and Sales here>>>

Zacks Investment Research
Zacks Investment Research


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Zacks Recommendation Upgrade Pushes Hargreaves, California Bancorp Higher

Shares of Hargreaves Lansdown plc HRGLY and California BanCorp CALB have gained 11.7% and 2.5%, since their Zacks Recommendation was upgraded to Outperform on September 12 and September 13, respectively.

While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.

The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.

To access our research reports with Zacks Recommendations for the 1100+ stocks we cover, click here>>>

Zacks Focus List Model Portfolio Stock Starbucks Gains

Shares of Starbucks Corporation SBUX, which belongs to the Zacks Focus List, have gained nearly 3% over the past week. The Zacks Focus List is a model portfolio of 50 hand-picked stocks that possess the right fundamental ingredients to outperform the market over the next 12 months. These 50 stocks are picked from a long list of stocks with the highest Zacks Rank.

Starbucks was added to the Focus List on August 16, 2019.

Since its inception on February 1, 1996, the Focus List portfolio has delivered an annualized return of +12.9%.

Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>

UnitedHealth Becomes Least Losing Zacks ECAP Stock

In a week that saw the market decline to its lowest level in more than two months, UnitedHealth Group Incorporated UNH, a component of our Earnings Certain Admiral Portfolio (ECAP), was better placed with a marginal loss (-0.6%). ECAP is a model portfolio of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks.

With little to no turnover and annual rebalance periodicity, the ECAP seeks to minimize capital loss by holding shares of companies whose earnings streams exhibit a proven 20+ year track record of surviving recessionary periods with minimal impact on aggregate earnings growth relative to the overall S&P 500.

The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.

Zacks ECDP Stock Johnson & Johnson Advances in A Losing Week

Johnson & Johnson JNJ, which is part of our Earnings Certain Dividend Portfolio (ECDP), advanced 1.1% last week. Investors’ inclination toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to the stock’s stability. Check Johnson & Johnson's dividend history here>>>

With an extremely low Beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps significantly mitigate risk. The ECDP has consistently outperformed the S&P 500 Dividend Aristocrats ETF NOBL.

Click here to access this portfolio on Zacks Advisor Tools.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
 
Johnson & Johnson (JNJ) : Free Stock Analysis Report
 
Starbucks Corporation (SBUX) : Free Stock Analysis Report
 
First Financial Bancorp. (FFBC) : Free Stock Analysis Report
 
City Holding Company (CHCO) : Free Stock Analysis Report
 
ProShares S&P 500 Dividend Aristocrats ETF (NOBL): ETF Research Reports
 
Hargreaves Lansdown plc (HRGLY) : Free Stock Analysis Report
 
California Bank of Commerce (CALB) : Free Stock Analysis Report
 
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Zacks Investment Research