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Leverage the Zacks Method to Outperform the Market: Spotlight on Versus Systems, Palantir Technologies, and Walmart

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Investor Caution Drives Down Major U.S. Indexes Ahead of Elections

Last week, all three major U.S. indexes closed lower as investors adopted a cautious stance just before the election season. The Dow Jones Industrial Average dropped by 1.90%, while the S&P 500 and the Nasdaq Composite decreased by 0.78% and 0.12%, respectively.

Choppy Trading Amid Election Uncertainty

Trading has been volatile as the U.S. presidential elections approach. The 10-year treasury yield reached 4.222%, its highest in three months, heightening concerns about potential surges in federal borrowing depending on the election outcomes. With strong macroeconomic data in recent weeks, investors anticipate that the Federal Reserve will be slow to cut interest rates. Additionally, remarks from Richmond Fed President Thomas Barkin suggest that achieving the Fed’s 2% inflation target may take longer than previously expected, increasing investor anxiety about future rate cuts.

Geopolitical Tensions Affect Global Markets

On an international scale, rising tensions between Iran and Israel are likely to impact global supply chains and energy prices, adding another layer of uncertainty for investors.

Zacks Guidance: Strategies for Market Success

Despite the challenging market conditions, Zacks provides investors with impartial guidance aimed at outperforming the market. Over the past three months, Zacks Research has applied time-tested methodologies to assist investors in navigating the prevailing uncertainty.

Here are some notable successes:

Versus Systems and Bilibili Experience Growth After Upgrades

Shares of Versus Systems Inc. (VS) have surged 84.1% since being upgraded to a Zacks Rank #2 (Buy) on August 28, outpacing the S&P 500’s 3.05% rise. Similarly, Bilibili Inc. (BILI), upgraded to a Zacks Rank #2 on August 27, has seen a return of 44.8% against the S&P 500’s 3.2% increase.

The Zacks Rank System: A Proven Tool for Investors

The Zacks Rank is a respected short-term rating system based on earnings estimate revisions. Research shows a strong correlation between these trends and stock price movements. A hypothetical portfolio of Zacks Rank #1 stocks recorded a +6.1% return year-to-date as of April 1, 2024, compared to +11.3% for the S&P 500 index. In 2023, this portfolio posted a +20.63% return, closely trailing the S&P 500 index’s +24.83% return.

Since 1988, the Zacks Model Portfolio has outperformed the S&P index by over 16 percentage points, delivering an annualized return of +27.6% versus the S&P 500’s +11.1%.

Zacks Recommendations Boost Banco BBVA and Canadian Imperial Bank

Shares of Banco BBVA Argentina S.A. (BBAR) have risen 31.4% since being upgraded to Outperform on September 3, while the Canadian Imperial Bank of Commerce (CM) saw a 9.6% increase following its upgrade the next day. In comparison, the S&P 500 increased by 2.7% and 4.8%, respectively, during the same period.

The Zacks Recommendation system is designed to predict performance over the next 6 to 12 months, based on trends in earnings estimate revisions. Stocks are classified into three categories: Outperform, Neutral, and Underperform, allowing for analyst discretion based on various factors.

Palantir and Shopify Shine on Zacks Focus List

Shares of Palantir Technologies Inc.(PLTR), which is part of the Zacks Focus List, have increased by 81.3% over the last 12 weeks after being added to the list on March 26, 2024. Another Focus List stock, Shopify Inc.(SHOP), appreciated by 45.2% during this time, with the S&P 500 rising just 6.2%.

In Q1 2024, the Focus List portfolio returned +10.23%, slightly trailing the S&P 500’s +10.56% return. In 2023, this portfolio achieved a +31.44% return, surpassing the S&P 500’s +26.28%.

Fair Isaac and Walmart Achieve Notable Gains

Fair Isaac Corporation (FICO), part of the Earnings Certain Admiral Portfolio (ECAP), has risen 25% over the past 12 weeks, followed by Walmart Inc.(WMT), which gained 20.5%.

The ECAP, which includes 30 conservative long-term Buy and Hold stocks, returned +9.08% year-to-date through March 31, 2024, compared to +10.42% overall market performance. While the portfolio delivered a +12.17% return in 2023, it underperformed in 2022 with -4.7% compared to the S&P 500’s -17.96%.

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Starbucks and Fastenal Shine in Zacks’ Earnings Dividend Portfolio

Strong Performers Emerge in Market Volatility

Starbucks Corporation SBUX has posted an impressive return of 28.2% over the past 12 weeks as a part of Zacks’ Earnings Certain Dividend Portfolio (ECDP). Fastenal Company FAST has also thrived, gaining 12.7% in the same period. These gains highlight a growing trend where investors are turning to reliable dividend stocks for income amidst market fluctuations.

With a low beta score and a 20+ year history of stable earnings, this 25-stock portfolio effectively reduces risk. Year-to-date, the ECDP has returned +4.47% through March 31, 2024, while the S&P 500 index (IVV) has surged by +10.42%. In 2023, the portfolio struggled with a -0.9% return, compared to the S&P 500’s +26.28%.

Impressive Growth from Axon Enterprise in 2024

Axon Enterprise, Inc. AXON has distinguished itself by climbing 72.1% year-to-date, outpacing the S&P 500 index’s +21.8% increase. The Zacks Top 10 portfolio, which includes Axon, achieved a notable +19.56% return in the first quarter of 2024, significantly exceeding the S&P 500 index’s +10.56%.

Historically, this Top 10 portfolio delivers strong performance, returning +25.15% in 2023 versus the S&P 500’s +26.28%. Since 2012, it has accumulated a remarkable total return of +1,060.9%, compared to +360.1% for the S&P 500 index.

Exclusive $1 Trial for Zacks’ Stock Picks

No catch, just an opportunity.

To help potential investors familiarize themselves with our services, Zacks offers a 30-day trial for just $1, allowing access to all our stock recommendations. Thousands have embraced this offer, while some remain skeptical about any hidden fees.

Through our various portfolio services—such as Surprise Trader and Technology Innovators—we closed 228 positions with gains in the double and triple digits during 2023. To explore more, click to access today’s top recommendations, including Stocks Set to Double.

Free stock analysis reports are available for:

  • Fastenal Company (FAST)
  • Walmart Inc. (WMT)
  • Starbucks Corporation (SBUX)
  • Fair Isaac Corporation (FICO)
  • Canadian Imperial Bank of Commerce (CM)
  • Shopify Inc. (SHOP)
  • Axon Enterprise, Inc. (AXON)
  • ProShares S&P 500 Dividend Aristocrats ETF (NOBL)
  • Bilibili Inc. Sponsored ADR (BILI)
  • BBVA Banco Frances S.A. (BBAR)
  • Palantir Technologies Inc. (PLTR)
  • Versus Systems Inc. (VS)

For the full article, visit Zacks.com.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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