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Zacks.com Featured Highlights Include: AllianceBernstein, Vipshop, Calavo Growers, BMC Stock And USANA Health Sciences

Published 02/13/2020, 09:41 PM
Updated 07/09/2023, 06:31 AM

For Immediate Release

Chicago, IL – February 14, 2020 – Stocks in this week’s article are AllianceBernstein Holding L.P. (NYSE:AB) , Vipshop Holdings Ltd. (NYSE:VIPS) , Calavo Growers Inc. (NASDAQ:CVGW) , BMC Stock Holdings Inc. (NASDAQ:BMCH) and USANA Health Sciences Inc. (NYSE:USNA) .

Buy 5 Top-Ranked DuPont-Tested Stocks Amid Virus Scare

Though the Wall Street is near a record level, fears of coronavirus are not sparing the investment world. Rise in severity of the disease may derail market momentum. Thus, fears of a correction are understandable. Since market watchers are still predicting decent gains in equities in 2020, it would be wise to bet on quality stocks right now.

Return on equity is one of the most coveted metrics by investors. The metric enables investors to differentiate between a profit-churner and a profit-burner. It is a profitability ratio that measures the earnings that a company generates from its equity.

To shortlist these gems, one can look at the DuPont (NYSE:DD) technique to analyze basic ROE at an advanced level. Here is how DuPont breaks down ROE into its different components:

ROE = Net Income/Equity

Net Income / Equity = (Net Income / Sales) * (Sales / Assets) * (Assets / Equity)

ROE = Profit Margin * Asset Turnover Ratio * Equity Multiplier

Why Use DuPont?

Although one can’t play down the importance of normal ROE calculation, the fact remains that it doesn’t always provide a complete picture. The DuPont analysis, on the other hand, allows investors to assess the elements that play a dominant role in any change in ROE.

It can help investors to segregate companies having higher margins from those having high turnover. For example, high-end fashion brands generally survive on high margin as compared with retail goods, which rely on higher turnover.

In fact, it also sheds light on the company’s leverage status, which can go a long way in selecting stocks poised for gains. A lofty ROE could be due to the overuse of debt. Thus, the strength of a company can be misleading if it has a high debt load.

So, an investor confined solely to an ROE perspective may be confused if he or she has to judge between two stocks of equal ratio. This is where DuPont analysis wins over and spots the better stock.

Investors can simply do this analysis by taking a look at the company’s financials.However, looking at financial statements of each company separately can be a tedious task. Screening tools like Zacks Research Wizard can come to your rescue and help you shortlist the stocks that look impressive with a DuPont analysis.

For the rest of this Screen of the Week article please visit Zacks.com at:https://www.zacks.com/stock/news/763799/buy-5-topranked-duponttested-stocks-amid-virus-scare

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.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.

Strong Stocks that Should Be in the News

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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.



AllianceBernstein Holding L.P. (AB): Free Stock Analysis Report

USANA Health Sciences, Inc. (USNA): Free Stock Analysis Report

Vipshop Holdings Limited (VIPS): Free Stock Analysis Report

Calavo Growers, Inc. (CVGW): Free Stock Analysis Report

BMC Stock Holdings, Inc. (BMCH): Free Stock Analysis Report

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