Chicago, IL – February 27, 2024 – 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: Universal Technical Institute UTI, SunCoke Energy SXC, Healthcare Services Group HCSG, First Bank FRBA and American Public Education APEI.
Here are highlights from Monday’s Analyst Blog:
Small Businesses' Highest Confidence in Years: Stocks to Buy
Small business owners are expressing a more positive outlook on the economy, with confidence reaching its highest level since President Joe Biden took office in 2021, as quoted on CNBC. According to the latest quarterly data from the CNBC|SurveyMonkey Small Business Survey, economic confidence among small business owners is on the upswing.
Against this upbeat backdrop, investors can play top-ranked stocks like Universal Technical Institute, SunCoke Energy, Healthcare Services Group, First Bank and American Public Education.
Positive Economic Sentiment
About 28% of small business owners now view the current state of the economy as "excellent" or "good," marking a considerable increase from the previous quarters and a notable jump from the previous year. This surge in optimism represents the highest level of confidence recorded since the inception of the CNBC|SurveyMonkey survey in Q2 of 2022.
Encouraging Trends
The Small Business Confidence Index, with a reading of 47 out of 100, has touched its peak since President Biden took office in Q1 of 2021. Despite lingering challenges such as inflation, recent data indicates a growing sense of confidence among consumers and small business owners regarding the economic landscape.
Inflation Poses Challenges but Fed Policy Productive
While optimism is on the rise, inflation remains a nagging concern for small business owners, with nearly a third identifying it as the most significant risk to their businesses. However, there is a cautious sense of optimism regarding inflation and overall costs, with confidence in the Federal Reserve's ability to control inflation successfully.
Will Fed Cut Rates in Late 2024?
While large-cap stocks are hitting all-time highs, attention has turned to the Federal Reserve's stance on interest rates. While a parade of Fed officials has hinted at future rate cuts, they differ on the timing of such moves. Despite indications of impending cuts, investors are now reassessing their expectations, with Goldman Sachs revising its projections downward (per a Yahoo Finance article).
The consensus now points to three rate cuts for 2024, down from the previous expectations of six, as inflation data and cautious Fed comments prompt a change in market forecasts. The Fed may start cutting rates in late 2024.
Stocks to Buy
Against this backdrop, below we highlight a few small-cap stocks that are currently must-buys. These small-cap stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Moreover, these stocks have seen positive earnings estimate revision for the upcoming quarter in the past month. These stocks have a lower P/E than the S&P 500 (i.e., 23.01X). These stocks have the best VGM Score of A.
Universal Technical Institute – Zacks Rank #1; P/E: 21.48X
The company provides technical education training in automotive, diesel, collision repair and refinishing, motorcycle, marine and personal watercraft technologies. The stock has seen a 25% increase in earnings estimate for the upcoming quarter in the past 30 days.
SunCoke Energy– Zacks Rank #2; P/E: 12.60X
SunCoke Energy, Inc. is a producer of metallurgical coke in the Americas. The company acquires, owns, and operates the coke-making and coal-mining operations. Its coke-making facilities are in the United States and Brazil. Its earnings estimate for the March quarter has jumped from $0.12 to $0.22 in the past month.
Healthcare Services Group – Zacks Rank #2; P/E: 14.11X
Healthcare Services Group, Inc. provides housekeeping, laundry, linen, facility maintenance and food services to the healthcare industry, including nursing homes, retirement complexes, rehabilitation centers and hospitals.
First Bank – Zacks Rank #1; P/E: 7.55X
First Bank is a state-chartered bank with five full-service branches. It provides personal and business banking services in New Jersey. The bank offers checking, savings and money market accounts, auto and home loans, home equity line of credit, fixed-rate home equity loans, lines of credit, term loans, commercial mortgages, letters of credit, merchant services, and construction finance. The bank's earnings estimate for the upcoming quarter has gone up by 3 cents to $0.43 in the past month.
American Public Education – Zacks Rank #2; P/E: 19.87X
American Public Education, Inc. is an online and campus-based postsecondary education provider. The company serves approximately 108,400 students through three subsidiary institutions. The earnings estimate of the company for the upcoming quarter has risen 7.7% in the past month.
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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 https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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