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Wall Avenue’s nightmare continues because it completed a disappointing August. U.S. inventory markets rallied within the first half of final month as a part of the bull run that began in mid-June. Nonetheless, the positive factors of the primary half had been greater than offset by a pointy decline within the second half. Lastly, the Dow, the S&P 500 and the Nasdaq Composite declined 4.1%, 4.2% and 4.6%, respectively, in August.
Traders are extremely anxious about market’s habits in September, which is traditionally the worst-performing month on Wall Avenue. This yr, the state of affairs is extra severe because the U.S. financial system is affected by record-high inflation, an especially hawkish Fed and the specter of a near-term recession.
Regardless of these headwinds, we take a contra view selecting 5 shares with a positive Zacks Rank which have robust momentum for September. These shares have popped prior to now month and have extra upside left. The businesses are —- Marathon Petroleum Corp. (MPC – Free Report) , Ulta Magnificence Inc. (ULTA – Free Report) , HF Sinclair Corp. (DINO – Free Report) , ShockWave Medical Inc. (SWAV – Free Report) and Paylocity Holding Corp. (PCTY – Free Report) .
Momentum More likely to Proceed
Momentum investing requires the continued appraisal of shares, guaranteeing that an investor doesn’t choose a beaten-down identify or overlook a thriving one. Momentum traders purchase excessive on anticipation {that a} inventory will solely ascend within the brief to intermediate time period. Subsequently, momentum shares with a positive Zacks Rank are prone to turn out to be an excellent mixture of investments.
Furthermore, the above-mentioned corporations have seen optimistic earnings estimate revisions within the final 30 days, indicating that market individuals predict robust enterprise alternatives for these corporations for the remainder of 2022.
Out Prime Picks
We now have narrowed our search to 5 large-cap (market capital > $10 billion) momentum shares which have stable upside left for September. Every of our picks carries a Zacks Rank #1 (Sturdy Purchase) and has a Momentum Rating of A or B. You’ll be able to see the entire record of as we speak’s Zacks #1 Rank shares right here.
The chart under exhibits the worth efficiency of our 5 picks prior to now month.
Picture Supply: Zacks Funding Analysis
Marathon Petroleum is poised for additional worth positive factors primarily based on a slew of positives. MPC’s $21 billion gross sales of its Speedway retail enterprise offered it with a much-needed money infusion. The deal additionally comes with a 15-year gasoline provide settlement beneath which Marathon Petroleum will provide 7.7 billion gallons of gasoline per yr to 7-Eleven, thus guaranteeing a gradual income stream.
MPC’s publicity to extra steady money flows from the logistics phase diversifies the earnings stream and presents a buffer in opposition to the unstable refining enterprise. Consequently, Marathon Petroleum is primed for vital capital appreciation and is considered as a most well-liked downstream operator to personal now.
Marathon Petroleum has an anticipated earnings progress charge of greater than 100% for the present yr. The Zacks Consensus Estimate for current-year earnings has improved 0.7% during the last 7 days. The inventory worth has superior 7.6% prior to now month.
HF Sinclair operates as an unbiased vitality firm. DINO produces and markets gasoline, diesel gasoline, jet gasoline, renewable diesel, specialty lubricant merchandise, specialty chemical substances, specialty and modified asphalt, and others.
HF Sinclair additionally owns and operates refineries situated in Kansas, Oklahoma, New Mexico, Utah, Washington, and Wyoming, and markets its refined merchandise principally within the Southwest United States and Rocky Mountains, Pacific Northwest, and in different neighboring Plains states.
HF Sinclair has an anticipated earnings progress charge of greater than 100% for the present yr. The Zacks Consensus Estimate for current-year earnings has improved 12.2% during the last 7 days. The inventory worth has appreciated 7.9% prior to now month.
Ulta Magnificence has been benefiting from its omnichannel energy. Additionally, the skincare class has been gaining from customers’ rising curiosity in self-care. ULTA’s stable efficiency was backed by the robust execution of its methods and stable visitor demand, with the latter gaining from thrilling model launches.
Additionally, elevated in-person actions and journey have been resulting in the revival of the wonder class demand. All main classes delivered double-digit comp gross sales progress. Encouragingly, Ulta Magnificence raised its fiscal 2022 view.
Ulta Magnificence has an anticipated earnings progress charge of 18.6% for the present yr. The Zacks Consensus Estimate for current-year earnings has improved 5.8% during the last 7 days. The inventory worth has gained 6.8% prior to now month.
ShockWave Medical is optimistic relating to the continued medical acceptance and penetration of IVL, as evident from its robust leads to the final reported quarter. SWAV’s outcomes had been pushed by the rising adoption of coronary IVL in america.
Continued gross sales drive growth led to progress in america, whereas enchancment in worldwide revenues over the prior yr highlighted the influence of pandemic restoration and better adoption in present geographies.
ShockWave Medical has an anticipated earnings progress charge of greater than 100% for the present yr. The Zacks Consensus Estimate for current-year earnings has improved 27.2% during the last 7 days. The inventory worth has jumped 34.4% prior to now month.
Paylocity Holding is benefiting from the rising adoption of its options amongst shoppers with lower than 50 staff. Wholesome momentum in PCTY’s core and higher finish of the market is a tailwind. The discharge of the Studying Administration System and Group portal, which garnered optimistic suggestions from shoppers, is encouraging.
The addition of on-demand pay to Paylocity Holding’s portfolio is prone to increase consumer wins going ahead. PCTY’s common investments in technological upgrades, together with product innovation, will proceed to spice up its high line.
Paylocity Holding has an anticipated earnings progress charge of 10.2% for the present yr (ending June 2023). The Zacks Consensus Estimate for current-year earnings has improved 14.7% during the last 30 days. The inventory worth has climbed 14% prior to now month.
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