Best stocks to invest in – Brutal Earnings Season? Hide Out in These 5 Blue Chip Stocks



Best stocks to invest in


Welcome to Episode #13 of the Zacks Market Edge Podcast.


Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.


In this episode, Tracey is joined by Zacks’ Director of Research Sheraz Mian to discuss the fourth quarter earnings outlook. Sheraz is Zacks’ expert on the earnings outlook. His Earnings Trends articles appear every week on Zacks.com. Be sure to check out the articles every week to get updates on earnings estimates.


Alcoa (AA) has already reported so the earnings season has now officially started. Earnings estimates for the fourth quarter have been sliding since October. Total earnings for the S&P 500 are expected to be down 7.4% from the fourth quarter last year. Revenue is forecast to be down 4.7% year over year as well.


But is it all the energy sector’s fault? Energy’s earnings are expected to be down 67% year over year with revenues falling 37.9%.



Unfortunately, the earnings gloom extends beyond energy with four other sectors expected to have double digit earnings declines in the fourth quarter. Anyone watching the commodities rout, won’t be surprised at the dismal outlook for these sectors.


But there are still 3 sectors that are supposed to see growth. Is the favored tech sector one of them?


China is also on the minds of investors. Will S&P 500 companies be warning about weakness in China or is the Chinese economy better than many believe?


Nike (NKE) has already reported earnings and it didn’t have any revenue problem in China. Starbucks (SBUX) also recently announced it was planning an additional 500 stores in China, on top of the 2,000 it already has there, as it remains bullish on that market.


Is success in China really a case-by-case basis?


For investors, this earnings season looks to be a tricky one.


Tracey and Sheraz discuss how to manage it, including 5 stocks that have solid track records of beating the Zacks Consensus Estimate over the last 5 years. For example, blue chip companies General Electric (GE) and L Brands (LB) have perfect earnings surprise records. Neither has missed in 5 years.


Who else has a perfect earnings surprise track record over the last 5 years that you should watch this earnings season?


Listen to this week’s podcast to find out.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
ALCOA INC (AA): Free Stock Analysis Report
 
NIKE INC-B (NKE): Free Stock Analysis Report
 
GENL ELECTRIC (GE): Free Stock Analysis Report
 
L BRANDS INC (LB): Free Stock Analysis Report
 
STARBUCKS CORP (SBUX): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

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