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The Zacks Analyst Blog Highlights: American River, BG Staffing, Evolution Petroleum, Kamada and Farmers & Merchants


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For Immediate Release

Chicago, IL -August 13, 2018 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: American River Bankshares AMRB , BG Staffing, Inc. BGSF , Evolution Petroleum Corporation EPM , Kamada Ltd. KMDA and Farmers & Merchants Bancorp, Inc . FMAO .

Here are highlights from Friday's Analyst Blog:

Dollar Strengthens on Turkey's Trouble: Top 5 Gainers

The U.S. dollar currently strengthened to its firmest level against major rivals on concerns about the health of Turkey's financial system. U.S. sanctions against top Turkish government officials and the country's unorthodox economic policies have spooked investors.

So, how do you play a strong dollar? Small caps, being U.S.-centric, are better poised to weather a stronger U.S. dollar. This category of stocks is ripping to fresh records as they are cushioned against the loss of competitiveness and currency translation impact of a stronger greenback. Needless to say, as the dollar rises, multi-nationals lose their competitive advantage as foreign customers see U.S. goods as more expensive than non-U.S. goods.

Dollar Hits One-Year High, Lira in Trouble

The Turkish lira recently lost more than 10% against the U.S. dollar, which hit a one-year high as worries about Turkey's capacity to repay foreign-currency debts rattled the global equity markets.

Euro Takes a Beating

The euro, most significant component of the dollar, plunged against the greenback, emphasizing the spillover effect of Turkey's crisis on European markets. The euro tumbled 0.8% to $1.445, its weakest since July 2017.

Sean Callow, currency strategist at Westpac, said that "for some days, global markets have noted the Turkish lira's plunge with more curiosity than concern, seemingly viewing it as Turkey's problem and no one else's but that seems to have changed."

Turkey on the Economic Brink

Rising tensions with the United States and Erdogan's unwillingness to raise interest rates are taking a toll on its economy. Turkey has threatened to retaliate if the White House levies sanctions on senior Turkish government officials for their role in the detention of an American pastor. Meanwhile, Turkey sent its officials to Washington, but, there is no progress.

What Does a Stronger Dollar Mean for Stocks?

A rising dollar impedes earnings growth, which suggests that returns from the equity market might be subdued. Particularly, companies that derive a lion's share of their earnings from overseas will be dealt the biggest blow. Such companies are exposed to foreign exchange risks between the United States and other countries they are operating in. Thus, if dollar gains strength, it tends to dent foreign sales of such companies.

S&P Global added that with every 1% rise in the greenback, large-cap companies with heavier U.S. concentration in terms of revenue generation have gained 71 basis points on average. For small caps, the correlation was way better. In fact, small caps have outperformed large caps so far this year.

5 Winning Stocks

Small caps are set to benefit from wider domestic revenue exposure which insulates them from the effects of a stronger dollar. Thus, investing in stocks with high domestic exposure in terms of revenue generation seems judicious. We have picked five such stocks that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).

American River Bankshares  operates as the holding company for American River Bank that provides commercial banking products and services to small and middle-market businesses, and individuals in California, the United States. Currently, the company has a Zacks Rank #2. In the last 60 days, one earnings estimate moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings rose 1.1% in the same period. The company's expected earnings growth rates for the current quarter and year are 35.3% and 22.7%, respectively.

BG Staffing, Inc.  provides temporary staffing services in the United States. Currently, the company has a Zacks Rank #1. In the last 60 days, two earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings rose 23.5% in the same period. The stock's expected earnings growth rates for the current quarter and year are 17.1% and 61.4%, respectively.

Evolution Petroleum Corporation  engages in the acquisition, exploitation, and development of properties for the production of crude oil and natural gas, onshore in the United States. Currently, the company has a Zacks Rank #2. In the last 60 days, two earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings rose 7.1% in the same period. The company's expected earnings growth rates for the current quarter and year are 160% and 80%, respectively. You can see  the complete list of today's Zacks #1 Rank stocks here .

Kamada Ltd.  develops, produces, and markets specialty plasma-derived protein therapeutics. Currently, the company has a Zacks Rank #2. In the last 60 days, one earnings estimate moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings rose 3.7% in the same period. The stock's expected earnings growth rate for the current year is 47.4%.

Farmers & Merchants Bancorp, Inc.  operates as the bank holding company for The Farmers & Merchants State Bank that provides commercial banking, retail banking, and other financial products and services to individuals and small businesses in Northwest Ohio and Northeast Indiana. Currently, the company has a Zacks Rank #2. In the last 60 days, 10 earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings rose 3.1% in the same period. The company's expected earnings growth rates for the current quarter and year are 14.3% and 19.6%, respectively.

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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 http://www.zacks.com/performance  for information about the performance numbers displayed in this press release.


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Farmers & Merchants Bancorp Inc. (FMAO): Free Stock Analysis Report

American River Bankshares (AMRB): Free Stock Analysis Report

Kamada Ltd. (KMDA): Free Stock Analysis Report

Evolution Petroleum Corporation, Inc. (EPM): Free Stock Analysis Report

BG Staffing Inc (BGSF): Free Stock Analysis Report

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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.



This article appears in: Investing , Stocks
Referenced Symbols: FMAO , AMRB , KMDA , EPM , BGSF



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