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This week, Zacks Equity Strategist Mayur Thaker, CFA discusses:

• Current market valuation and whether we may be in a bubble. For this analysis, Mayur uses Zacks Research System (ZRS) to get a number of perspectives on current market expectations and whether it may be overvalued.

• First, he looks at standard market metrics including P/E F12M, Price/Free Cash Flow, EBIT Margin, and Shiller P/E. By these standards, Mayur believes the market, while high, is not in the bubble territory we saw in 2000.

• The story gets more complicated when these multiples are compared to the cost of capital In this analysis, Mayur shows that stocks are very expensive relative to 10-year Treasury yields, and that growth expectations are quite high. Watch this week’s video to learn whether Mayur considers the market to be in a bubble—and how he believes investors should position their portfolios.

This week, Zacks Chief Equity Strategist and Economist John Blank, PhD discusses:

• Top stocks in the Medical sector, a large and diverse area of the economy which includes drug manufacturers as well as medical care and medical product companies. In this webinar, John defines “top” stocks using three screening metrics: market capitalization, number of analysts following the stock, and largest percent change in F1 EPS estimate (the most important element used in assigning a Zacks Rank to stocks).

• Using this framework, John then examines key metrics for these leading names, using Zacks charting to illustrate comparisons of the most relevant trends for these companies. To point out strengths and weaknesses among these stocks, he looks at metrics ranging from Revenue F12M, EPS F12M, and Return on Equity to R&D as % of Sales, and DuPont analysis. John also spends some time discussing the role of the FDA in the pharma industry.

• Because he uses 3 types of screening metrics, John’s review of Medical players includes both large and relatively small companies, and both familiar and less well-known names. Among the tickers he discusses are Eli Lilly (LLY), UnitedHealth Group (UNH), Soligenix (SNGX), GoodRx Holdings (GDRX), Astrana Health (ASTH), Progyny (PGNY), and many others. Don’t miss this in-depth analysis from Zacks’ Chief Equity Strategist!

This week, Zacks Equity Strategist Mayur Thaker, CFA discusses:

• An equity investing style that falls outside the ‘growth’ and ‘value’ buckets: quality-oriented investing. In Mayur’s opinion, quality is the single most important consideration in stock picking. But how do you define it? In this webinar, Mayur walks through the 4 factors that comprise the Zacks definition of quality: high and durable earnings linearity, earnings growth, return on invested capital, and free cash flow conversion.

• Mayur explains what each of these 4 factors means in terms of a company’s quality. He offers a pair of examples of quality companies, both of which are members of the Zacks Earning Certain Portfolio (ECP): CGI Inc. (CGI) and Gartner Inc. (IT). These companies are both technology-oriented, and provide excellent illustrations of what it means to be a quality company.

• To further elucidate this definition of quality, Mayur presents a series of charts that show historical performance for each stock. The charts make clear that these companies deliver “high and durable” earnings growth, return on invested capital, and free cash flow conversion. Go beyond growth and value—discover how quality stocks can deliver long-term shareholder value. Don’t miss this week’s webinar!

This week, Zacks Equity Strategist Mayur Thaker, CFA discusses:

• The latest entry in his regular series of macro updates. This week, Mayur discusses the growing number of valuation metrics that are warning we are entering territory not seen since 2000, and cautions that they could indicate evidence of a market bubble as we experienced back then. Although the more traditional valuation measures remain reasonable, Mayur offers 4 metrics that suggest we are entering bubble territory.

• In addition, Mayur still has his eye on a number of macroeconomic indicators that continue to signal a recession ahead. Manufacturing gauges have been in recession for 16 months; the 10y – 2y UST yield curve has been inverted for 21 months; excess savings is well below trend; leading employment indicators are entering contraction; and credit card delinquencies are rising, to name just a few warning signs.

• How should investors react to these conditions? Mayur believes that the currently strong EPS estimates, signs of disinflation, and easing long-term yields offer a ‘Goldilocks’ blend of conditions that continue to fuel a powerful market rally. However, he advises investors to watch for three key metrics to know when to shift to a very defensive position. Watch this week’s webinar to find out what they are, and to get Mayur’s ideal defensive capital allocation for 2024.

This week, Zacks Chief Equity Strategist and Economist John Blank, PhD discusses:

• Top stocks in the Retail-Wholesale sector, a wide-ranging area of the economy which includes both brick-and-mortar and online enterprises, and also food/drug and non-food companies. In this webinar, John defines “top” stocks using three screening metrics: market capitalization, number of analysts following the stock, and largest percent change in F1 EPS estimate (the most important element used in assigning a Zacks Rank to stocks).

• Using this framework, John then examines key metrics for these leading names, using Zacks charting to illustrate comparisons of the most relevant trends for these companies. To point out strengths and weaknesses among these stocks, he looks at metrics ranging from Total Return Performance, Revenue F12M, EPS F12M, and Return on Equity to Net Margin, Total Debt/Capital to EPS Consensus and EPS Surprise, to EBIT, Total Assets, Total Liabilities, and many more.

• John’s review of Retail-Wholesale players includes both large and relatively small companies, US-based firms and those headquartered in Europe and the Far East, and both familiar and less well-known names. Among the tickers he discusses are Walmart (WMT), Chipotle (CMG), Target (TGT), Sainsbury’s (JSAIY), Fiverr (FVRR), and many others. Don’t miss this in-depth analysis from Zacks’ Chief Equity Strategist!

This week, Zacks Chief Equity Strategist and Economist John Blank, PhD discusses:

• Top stocks in the Consumer Discretionary sector, which includes apparel, appliances, home furnishings, leisure services, media, consumer electronics and more. For this webinar, John defines “top” stocks using three screening metrics: market capitalization, number of analysts following the stock, and largest percent change in F1 EPS estimate (the most important element used in assigning a Zacks Rank to stocks).

• Using this framework, John then examines key metrics for these leading names, using Zacks charting to illustrate comparisons of the most relevant trends for these companies. To point out strengths and weaknesses among these stocks, he looks at metrics ranging from Revenue F12M, EPS F12M, and Return on Equity to Net Margin, Total Debt/Capital to EPS Consensus and EPS Surprise, to EBIT, Total Assets, Total Liabilities, and many more.

• John’s review of Consumer Discretionary players includes both large and relatively small companies, US-based firms and those headquartered in Europe, Japan and China, and both familiar and less well-known names. Among the tickers he discusses are Netflix (NFLX), Lululemon (LULU), Oriental Land Company (OLCLY), Marriott (MAR), Roblox (RBLX), Naspers (NPSNY), and many others. Don’t miss this in-depth analysis from Zacks’ Chief Equity Strategist!

This week, Zacks Equity Strategist Mayur Thaker, CFA discusses:

• 3M Company (MMM), an iconic American company and member of the Zacks Earnings Certain Portfolio (ECP). Last summer, Mayur discussed why this company was a good value for investors, despite a pair of lawsuit settlements totaling more than $18 billion (previous video linked below). This week, he looks at some of the positive company metrics that he believes make 3M an outstanding value opportunity.

• While P/E multiples for S&P 500 and NASDAQ companies are often more than 20x, Mayur points out that, with a P/E hovering around 10, 3M’s multiple is usually only found in a dying company. However, that is not the case with 3M, and in this video he highlights why this is a vibrant and growing enterprise.

• Mayur walks through key metrics that underline the true value of the company, including Free Cash Flow per Share, Return on Invested Capital, and others. Also, while the two lawsuits are certainly an issue, he also points out that the planned spin-off of the Healthcare division of the company will unlock more than $10 billion, and offset the lawsuit settlement costs. Don’t miss this fascinating examination of the true value of a classic American brand.

This week, Zacks Chief Equity Strategist and Economist John Blank, PhD discusses:

• More on the Zacks approach to asset allocation, plus an overview of top stocks in the Consumer Staples sector. John writes the Zacks Monthly Investing Update and Asset Allocation report, and the first half of this week’s webinar is the conclusion of his series on asset allocation, specifically looking at Zacks ETF model portfolio cumulative and annualized returns at various weights as well as portfolios formed from other mutual funds and ETFs.

• John then shifts gears to look at top picks in the Consumer Staples sector, which includes food, beverages, publishing, soaps/cosmetics, tobacco, and miscellaneous. John defines “top” stocks using three screening metrics: market capitalization, number of analysts following the stock, and largest percent change in F1 EPS estimate (the most important element used in assigning a Zacks Rank to stocks).

• Using this framework, John then examines key metrics for these leading names, using our charts to compare the most relevant trends for these companies, including Revenue F12M, EPS F12M, Return on Equity, Earnings Pureness, Capital Expenditure, and many more. His discussion includes both household names like Procter & Gamble (PG) and Hershey (HSY), and less familiar stocks such as United Natural Foods, Inc. (UNFI) and Mondelez International Inc. (MDLZ). Don’t miss this informative double feature from Zacks’ Chief Equity Strategist!

This week, Zacks Equity Strategist Mayur Thaker, CFA discusses:

• The latest entry in his series of macro updates. Mayur still believes that we are headed toward a recession in 2024, and he cites a plethora of metrics that support his thesis: Manufacturing gauges have been in recession for 15 months; the 10y – 2y UST yield curve has been inverted for 20 months; and many other signals flashing red. He also focuses on indicators that imply that the job market is much weaker than it appears—including cyclical employment in its 7th consecutive month of YoY contraction, full-time YoY job growth at its slowest outside of recessionary periods, and average weekly hours in rapid decline consistent with recession, among other alarming trends.

• What do these macroeconomic indicators mean for stocks? Mayur points out that the S&P 500 forward P/E is significantly higher than previous 5% environments, and that the direction of leading fundamental indicators (including the rising cost of capital), at the margin, implies negative pressure to S&P earnings. This means analysts will mark down FY 2024 EPS forecasts. Finally, Mayur offers his ideal defensive capital allocation for the low-growth environment he sees ahead.

• However, Mayur notes that there is initial evidence that S&P 500 earnings growth put in a trough around Q3 2023 and is beginning to re-accelerate. Combined with continued disinflation and easing long-term bond yields, the market has exhibited extraordinary momentum leading to a major breakout from the 2021 top. His conclusion: While recession is still the likely outcome, it may not be as imminent as he originally thought. Mayur offers two signals to look out for to potentially time the beginning of a major downturn more accurately.

This week, Zacks Chief Equity Strategist and Economist John Blank, PhD discusses:

• More on the Zacks approach to asset allocation in 2024. John writes the Zacks Monthly Investing Update and Asset Allocation report, and this is the second part of his series on this critical topic. In this week’s webinar, he focuses on the concepts of risk and return in building asset allocations. The slides he presents in both webinars are essential to understanding these concepts, and John tells viewers how to get these slides and charts for free from Zacks.

• John begins by defining the various types of risk and return and, importantly, key measures of portfolio returns and risks including Information Coefficient, Information Ratio, Sortino and Sharpe Ratios, Skewness and Kurtosis, and others. John also outlines types of broad risk (natural events, economy, politics, etc.) as well as important investing concepts including the Efficient Frontier, Capital Market Line (CML) and Capital Allocation Line (CAL).

• John then reviews the returns for the family of Zacks ETF Model Portfolios. He presents the annual returns by class, correlation coefficient matrix, and variance-covariance matrix, as well as charts detailing monthly returns since 2010 for various weights in hypothetical portfolios. Don’t miss this expert review of risk and return factors in the asset allocation process from one of the industry’s leading strategists!