Chicago, IL – September 23, 2024 – Stocks in this week’s article are American Airlines AAL, Alaska Air Group ALK, Warner Bros. Discovery WBD, Dana DAN and Best Buy Co. BBY.
5 Broker-Loved Stocks to Buy on Fed Rate Cut
On Sept. 18, 2024, the Federal Reserve cut interest rates by 50 basis points in response to the cooling inflation scenario. This was the first time that interest rates were slashed since March 2020. While a 25-basis-point rate cut was more or less assured, the 50-basis-point rate cut highlights the Fed's increasing focus on bolstering the job market. The Fed signaled that it will cut the rate by another half a percentage point in the current year.
The economy is likely to benefit from this considerable rate cut. Given this brightening scenario, investors should design a winning portfolio of broker-friendly stocks for impressive returns. Brokers are deemed to be experts in the field of investing. Stocks such as American Airlines, Alaska Air Group, Warner Bros. Discovery, Dana and Best Buy Co. should grace their portfolios.
We have designed a screening process to shortlist stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of broker information, it has been included. The price/sales ratio takes care of the company's top line, making the strategy a well-rounded one.
Here are five of the 10 stocks that made it through the screening:
American Airlines is based in Fort Worth, TX. A gradual increase in air travel demand (particularly for leisure) is aiding AAL. However, high operating costs are hurting its bottom line.
The Zacks Consensus Estimate for third-quarter 2024 earnings has been unchanged at 4 cents per shareover the past 90 days. AAL currently carries a Zacks Rank #3 (Hold).You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here
Alaska Air is based in Seattle, WA. The uptick in air travel demand is aiding the airline. The carrier's shareholder-friendly attitude bodes well.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has been revised 8.8% upward. The Zacks Consensus Estimate for 2025 earnings has been revised 2.9% upward over the past 60 days. ALK currently carries a Zacks Rank #3.
Warner Bros. Discovery benefits from impressive streaming subscriber growth, driven by an expanding content portfolio. The company's focus on sports streaming, particularly live sports, is another tailwind.
WBD currently carries a Zacks Rank #3. The Zacks Consensus Estimate for WBD's current-quarter earnings indicates growth in excess of 100% from the year-ago actual.
Dana is a provider of power conveyance and energy-management solutions for vehicles and machinery in North America, Europe, South America and the Asia Pacific. The company is headquartered in Maumee, OH.
DAN currently carries a Zacks Rank #3. The Zacks Consensus Estimate for DAN's 2024 earnings has been revised 30.7% upward over the past 60 days.
Best Buy retails technology products in the United States and Canada. The companyis benefitting from an uptick in retail sales. Best Buy's initiatives to invest in systems and boost omni-channel capabilities should certainly lift its profit margins.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has been revised 2.5% upward. The company currently carries a Zacks Rank #3.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2339066/5-broker-loved-stocks-to-keep-an-eye-on-post-feds-huge-rate-cut
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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