Earnings help Zim rise to top industrial gainer of the week as outlook plummets Chart
The select industrial sector (XLI) was in the red for the second week (-2.35%) in a row, for the week ending March 17. This week’s industry winners (in our segment) include some logistics service providers, while losers seen names of airlines.
The SPDR S&P 500 Trust ETF (TO SPY) +1.06% won, driven by technology and communication, amid the worst financial crisis since 2008. In the United States, Signature Bank and Silicon Valley Bank were taken over by US regulators due to liquidity problems, while Credit Suisse in Switzerland received a $54 billion lifeline from its Swiss National Bank. Meanwhile, markets are expecting a 25 basis point rate hike from the Federal Reserve at its next monetary policy meeting.
The top five gainers in the industrials sector (stocks with a market capitalization of over $2 billion) all gained more than +5% everyone this week. Since the beginning of the year, all these five have been in the green.
ZIM Integrated Shipping Services (New York stock market :ZIM) +22.53%. The Israeli shipping company, which was among the decliners two weeks ago, surged forward to take this week’s top spot on the back of his Q4 earnings to show. On Monday, the company’s shares rose (+6.59%) in the fourth trimester earnings beat and positive outlook while reporting quarterly report of $6.40/share dividend. The next day, the title jumped even more (March 14 +10.35%).
ZIM has a quantitative SA rating – which takes into account factors such as momentum, profitability and valuation, among others – of Plug. The stock has a factor rating of A+ for profitability but F for growth. The average Wall Street analyst rating is consistent with a Plug its own rating, in which 3 out of 7 analysts consider the stock as such. YTD, +39.50%.
ZTO Express (Caymans) (ZTO) +10.53%. The Chinese logistics service provider landed among the winners for the second consecutive week. The stock soared +7.94% Thursday despite Q4 results missing estimates.
The quantitative SA rating on ZTO is Buy, with a score of A for Profitability B- for Momentum. The average Wall Street analyst rating is strong buy, where 16 out of 22 analysts mark the stock as such. YTD, +5.88%.
The chart below shows YTD price-yield performance of the top five winners and SP500:
FedEx (FDX) +9.50%. The stock of FedEx, its logistics counterpart, rose +7.97% March 17 after its Q3 earnings show that cost reduction efforts have stimulated performance. The Memphis, Tennessee-based company also raised its forecast for fiscal year 2023, prompting several analysts to improve the stock.
The SA Quant Rating on FDX is Plug, with a score of C for Momentum and Valuation. The average rating of Wall Street analysts differs from one Buy rating, in which 12 out of 29 analysts consider the stock a strong buy. YTD, +27.20%.
Rentokil Initial (OTR) +7.39%. British pest control service provider Rentokil saw its shares climb the most this week on Thursday (+9.71%) after FY22 income increased by about 25% year-on-year. Quantitative SA rating on RTO is Plugwhich contrasts with the average Wall Street analyst rating of Buy. YTD, +7.01%.
Canadian Pacific Railway (CP) +5.69%. The Surface Transportation Commission approved CP’s acquisition of Kansas City Southern on Wednesday, driving up inventory. The average Wall Street analyst rating on CP is Buywhile the SA Quant Rating is Plug. YTD, +3.62%.
This week’s top five declines among industrial stocks (market cap over $2 billion) all lost more than -14% each. Since the start of the year, 3 of these 5 stocks have been in the red.
Industries Chart (New York stock market :GTLS) -22.09%. The Ball Ground, Ga.-based cryogenic solutions provider slipped to its lowest this week on Friday (-12.38%) after providing the updated 2023 fiscal year outlook including the recently completed acquisition of Howden, which apparently disappointed investors.
The SA Quant rating on GTLS is Sell with a score of F for Profitability and D for Momentum. The rating contrasts sharply with the average Wall Street analyst rating of strong buy, where 12 out of 15 analysts consider the stock as such. YTD, -10.67%.
Herc Holdings (IRH) -16.27%. The Florida-based company – which rents out earth-moving machinery, trucks and other equipment – saw its shares sink the most this week on Monday (-9.35%). The SA quantitative rating on HRI is Plug, with a score of B- for Valuation and C for Momentum. The average Wall Street analyst rating is Buy, where 6 out of 10 analysts consider the stock a strong buy. YTD, -19.59%.
The chart below shows YTD price-yield performance of the five worst decliners and XLI:
United Airlines (LAU) -15.56%. Market turmoil appeared to weigh on the airline industry as the sector (JETS) decreases suddenly on Monday. Shares of UAL, which also fell the previous week, fell for three consecutive days this week, starting on Monday after providing a pessimistic outlook for the first quarter of 2023.
The quantitative rating SA on UAL is strong buy, with a score of A+ for Profitability and A for Growth. The average Wall Street analyst rating has a Buy rating, in which 7 of 21 analysts label the stock as Strong Buy. YTD, +14.16%.
Terex (TEXAS) -14.88%. Stocks fell -8.80% Friday after Bank of America downgraded the heavy machinery manufacturer’s stock to Buy Neutral. The SA Quant Rating on TEX is strong purchasewhile the average Wall Street analyst rating is Buy. YTD, +6.06%the only stock other than UAL that is in the green among the five worst performers this week.
Alaska Air Group (ALK) -14.77%. Another airline stock, which suffered a similar fate to UAL, having declined the previous week and falling three days in a row from Monday. The Seattle-based company cut its margin forecast for the first quarter in a context of rising fuel costs. The SA Quant rating on ALK is Buywhile the average Wall Street analyst rating is strong purchase. YTD, -8.50%.