Beat the Market Like Zacks: Walmart, Novo Nordisk, Procter & Gamble in Focus

Last week, all of the three widely followed indexes closed in the red. The S&P 500, Dow Jones Industrial Average and the Nasdaq Composite declined 0.3%, 0.9% and 1.2%, respectively.

Market participants were eagerly awaiting Fed Chair Jerome Powell’s Congressional testimony to gauge the Fed’s rate-cut outlook. Powell said that they were looking to start cutting rates, but it will be subject to further assessment of where inflation is at and might not be anytime soon. There was an early-week tech slump that dragged the market down and a mid-week resurgence based on reports of a robust job market and encouraging earnings numbers.

The focus continues to be on the central bank, though, and market participants are currently not expecting an interest rate cut before June 2024.

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

As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. 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:

Ocular Therapeutix and Solid Biosciences Surge Following Zacks Rank Upgrade

Shares of Ocular Therapeutix, Inc. OCUL have gained 126.8% (versus the S&P 500’s 8.8% increase) since it was upgraded to a Zacks Rank #2 (Buy) on January 8.

Another stock, Solid Biosciences Inc. SLDB, which was also upgraded to a Zacks Rank #2 on January 8, has returned 101.5% since then.

Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. 

A hypothetical portfolio of Zacks Rank #1 (Strong Buy) stocks returned +20.63% in 2023 vs. +24.83% for the S&P 500 index and +15% for the equal-weight S&P 500 index. The portfolio of Zacks Rank #1 stocks is an equal-weight portfolio, while the S&P 500 index is a market-cap-weighted index that has been notably distorted by the concentrated performance of mega-cap stocks in 2023.

We are not trying to cherry-pick here. But since this Zacks Model portfolio, consisting of Zacks Rank #1 stocks, is an equal-weight portfolio, the equal-weight S&P 500 index is the appropriate benchmark for comparison. Looked at this way, this portfolio has handily outperformed the index.

The Zacks Model Portfolio - consisting of Zacks Rank #1 stocks – has outperformed the S&P index by more than 13 percentage points since 1988 (Through January 1st, 2024, the Zacks # 1 Rank stocks generated an annualized return of +24.18% since 1988 vs. +10.88% for the S&P 500 index).You can see the complete list of today’s Zacks Rank #1 stocks here >>>

Check Ocular’s historical EPS and Sales here>>>

Check Solid Biosciences’ historical EPS and Sales here>>>

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Recommendation Upgrades Vaxart and ACM Research Higher 

Shares of Vaxart, Inc. VXRT and ACM Research, Inc. ACMR have advanced 108.5% (versus the S&P 500’s 7.2% rise) and 47.1% (versus the S&P 500’s 6.8% rise) since their Zacks Recommendation was upgraded to Outperform on January 9 and January 12, 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 Stocks Sea Limited, Novo Nordisk Shoot Up

Shares of Sea Limited SE, which belongs to the Zacks Focus List, have gained 61.5% over the past 12 weeks. The stock was added to the Focus List on March 26, 2020. Another Focus-List holding, Novo Nordisk A/S NVO, which was added to the portfolio on March 7, 2023, has returned 37% over the past 12 weeks. The S&P 500 has advanced 11.7% over this period. 

The 50-stock Zacks Focus List model portfolio returned +21.72% in 2023 (through November 30) vs. +20.79% for the S&P 500 index and +6.32% for the equal-weight S&P 500 index. In 2022, the portfolio produced -15.2% vs. the S&P 500 index’s -17.96%.

Since 2004, the Focus List portfolio has produced an annualized return of +11.07% through November 30, 2023. This compares to a +9.49% annualized return for the S&P 500 index in the same time period.

On a rolling one-, three- and five-year annualized basis, the Zacks Focus List returned +13.49%, +9.21%, and +14.05% vs. +13.82%, +9.74% and +12.51% for the S&P 500 index, respectively.

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 >>

Zacks ECAP Stocks Walmart and AutoZone Make Significant Gains

Walmart Inc. WMT, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 18.1% over the past 12 weeks. AutoZone, Inc. AZO has followed Walmart with 17.2% returns.

The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy and Hold stocks, returned +12.17% in 2023 vs. +26.28% for the S&P 500 index. The portfolio returned -4.7% in 2022 vs. the S&P 500 index’s -17.96%.

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 Stocks Colgate-Palmolive Company and Procter & Gamble Outshine Peers

Colgate-Palmolive Company CL, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 14.4% over the past 12 weeks. Another ECDP stock, The Procter & Gamble Company PG, has climbed 11.4% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance.

Check Colgate-Palmolive’s dividend history here>>>

Check Procter & Gamble’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 Zacks Earnings Certain Dividend Portfolio (ECDP) returned -0.9% in 2023 vs. +26.28% for the S&P 500 index) and +8.11% for the Dividend Aristocrats ETF (NOBL). The portfolio returned -2.3% in 2022 vs. -17.96% for the S&P 500 index and -8.34% for NOBL.

Click here to access this portfolio on Zacks Advisor Tools

Zacks Top 10 Stocks — Sprouts Farmers Market Delivers Solid Returns

Sprouts Farmers Market, Inc. SFM, from the Zacks Top 10 Stocks for 2024, has jumped 31.7% year to date compared to a 7.7% increase for the S&P 500 Index.

The Top 10 portfolio returned +25.15% in 2023 vs. +26.28% for the S&P 500 index. Since 2012, the Top 10 portfolio has produced a cumulative return of +1060.9% through the end of 2023 vs. +360.1% for the S&P 500 index.

On a rolling one-, three- and five-year annualized basis, the Zacks Top 10 portfolio returned +25.15%, +14.13%, and +29.3% vs. +26.28%, +10.23% and +15.61% for the S&P 500 index, respectively.

Since 2012, the Zacks Top 10 portfolio has returned an annualized return of +22.67% through the end of 2023 vs. +13.56% for the S&P 500 index.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2023. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

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

Novo Nordisk A/S (NVO) : Free Stock Analysis Report

Procter & Gamble Company (The) (PG) : Free Stock Analysis Report

Walmart Inc. (WMT) : Free Stock Analysis Report

Colgate-Palmolive Company (CL) : Free Stock Analysis Report

Sea Limited Sponsored ADR (SE) : Free Stock Analysis Report

AutoZone, Inc. (AZO) : Free Stock Analysis Report

ACM Research, Inc. (ACMR) : Free Stock Analysis Report

Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report

Ocular Therapeutix, Inc. (OCUL) : Free Stock Analysis Report

Solid Biosciences Inc. (SLDB) : Free Stock Analysis Report

VAXART, INC. (VXRT) : Free Stock Analysis Report

To read this article on Zacks.com click here.

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.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.