The Zacks Analyst Blog Highlights: CAI, HIBB, NLS, ALRS and SPH

For Immediate Release

Chicago, IL – September 22, 2020 – 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 CAI International Inc. CAI, Hibbett Sports Inc. HIBB, Nautilus Inc. NLS, Alerus Financial Corp. ALRS and Suburban Propane Partners L.P. SPH.

Here are highlights from Monday’s Analyst Blog:

5 Top Small-Cap Stocks to Counter Severe Volatility

Wall Street has been suffering from extreme volatility since the beginning of September. The magnitude of day-to-day fluctuations in stock prices in September is next to market fluctuations in March when coronavirus-led lockdowns were imposed all over the world.

However, a closer look at Wall Street reveals that small-cap stocks have suffered relatively less than large-cap and mid-cap stocks month to date. In fact, several small-cap stocks have gained so far this month. A handful of these stocks with a favorable Zacks Rank is likely to rally further in the near future.

Small Caps Outperform Peers in September  

Month to date, all the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are down 2.7%, 5.2% and 8.3%, respectively. These three stock indexes are predominantly large-cap specific indexes. The mid-cap centric S&P 400 Index declined 3.2% so far this month.

However, the small-cap centric Russell 2000 Index has dropped only 1.6% in this period. Another small-cap specific S&P 600 Index declined 3.2%. Therefore, September's volatility so far has a lesser impact on small-cap stocks compared with mid and large caps.

Small Business Optimism Index Rebounds in August

On Sep 8, the National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index rose 1.4 point to 100.2 in August from 98.8 in July. The index came in at 100.6 in June. The decline in July was mainly due to the resurgence of coronavirus in the United States. However, the index is yet to reach its pre-pandemic level of 104.5 in February.

August data, based on 751 companies, showed that seven of the 10 components of the index improved last month while two declined and one remained unchanged. Notably, last month's data was the first one after the termination of the payroll protection aid to small businesses in July.

According to NFIB's chief economist Bill Dunkelberg "We are seeing areas of improvement in the small business economy, as job openings and plans to hire are increasing, but many small businesses are still struggling and are uncertain about what the future will hold."

Small Businesses Are Vital

Small corporates create a significant amount of jobs in the U.S. economy. More than 50% of the newly created jobs in the private sector originate here. These people constitute a large part of customers for big businesses.

Moreover, small companies are a major part of the supply chain management systems of large companies for innovative and technologically superior inputs. Additionally, small businesses more often than not form a vital cog in corporate America's customer base.

The U.S. economy will gradually return to the pre-pandemic level as more parts of it reopen. Consequently, further reopening of the economy is likely to result in greater momentum for small businesses.

Our Top Picks

We have narrowed down our search to five small-cap stocks that have popped in this month with strong growth potential and robust earnings estimate revisions. Each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CAI International Inc.operates as a transportation finance and logistics company in the United States, Switzerland, France, Korea, Singapore, rest of Asia, rest of Europe and internationally. It operates through two segments, Container Leasing and Logistics.

The company has an expected earnings growth rate of 38.5% for the current year. The Zacks Consensus Estimate for the current year has improved 43.4% over the last 60 days.

Hibbett Sports Inc. is engaged in the retail of athletic-inspired fashion products including athletic footwear, athletic and fashion apparel, and sports equipment and related accessories. It operates in two segments, Lawson and Bolt.

The company has an expected earnings growth rate of 86.3% for the current year (ending January 2021). The Zacks Consensus Estimate for the current year has improved 14% over the last 30 days.

Nautilus a fitness solutions company, which designs, develops, sources, and markets cardio and strength fitness products, and related accessories for consumer and commercial use in the United States, Canada and internationally. It operates in two segments, Direct and Retail.

The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved more than 100% over the last 60 days.

Alerus Financial Corp.provides various financial services to businesses and consumers in the United States. It operates through four segments: Banking, Retirement and Benefit Services, Wealth Management, and Mortgage.

The company has expected earnings growth of 2.6% for the current year. The Zacks Consensus Estimate for the current year has improved 37.1% over the last 60 days.

Suburban Propane Partners L.P. is engaged in the retail marketing and distribution of propane, fuel oil, and refined fuels. It operates in four segments: Propane, Fuel Oil and Refined Fuels, Natural Gas and Electricity, and All Other.

The company has expected earnings growth of 43.8% for the current year (ending September 2021). The Zacks Consensus Estimate for the current year has improved 19.8% over the last 60 days.

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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

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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 information about the performance numbers displayed in this press release.

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Hibbett Sports, Inc. (HIBB): Free Stock Analysis Report
Suburban Propane Partners, L.P. (SPH): Free Stock Analysis Report
Nautilus Group, Inc. The (NLS): Free Stock Analysis Report
CAI International, Inc. (CAI): Free Stock Analysis Report
ALERUS FINL CP (ALRS): Free Stock Analysis Report
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