Get 4 issues of our weekly Top Stock Analyzer, includes our featured stock each week.

ONLY $9.99

Market Commentary

January 13th, 2018

For the Q4 as a whole, total earnings are expected to be up +8.8% from the same period last year on +6.9% higher revenues. The revisions trend for Q4 estimates has been very favorable, with earnings estimates holding up a lot better relative to other comparable periods. Earnings growth is expected to be positive for 13 of the 16 FATI sectors, with double-digit growth for the Energy, Technology, Construction, Industrial Products, Basic Materials and Autos sectors.

The big banks will most likely be taking headline-grabbing charges related to the impact of tax law changes on deferred tax assets and the ‘deemed’ repatriation of foreign earnings; the latter being a factor in Tech sector earnings. But all of these will be one-time non-cash charges that will have no bearing on core earnings.

For full-year 2017, total earnings for the S&P 500 index are expected to be up +7.7% on +5.3% higher revenues. Index earnings are expected to be up +12.3% in 2018 and +9.6% in 2019.

Earnings expectations do not reflect any tax law changes at this stage. Given the direct and indirect favorable impact of tax cuts on corporate profitability, estimates will most likely be going up following the enactment of the legislation.

Featured Recommendation

Reinsurance Group of America Corp.  $163.65   (RGA)

Reinsurance Group of America, Inc. is primarily engaged in life reinsurance and international life and disability insurance on a direct and reinsurance basis. In addition, the company provides reinsurance of non-traditional business including asset-intensive products and financial reinsurance.
.
. Target Price $180.02

FATI® Market Rankings

Ranking Market Cap 1 Mth 3 Mth 6 Mth 9 Mth 12 Mth RSR % Stocks Up % Stocks Dwn YTD Return
1 Small Caps 4.0% 7.0% 14.0% 21.0% 22.0% 4 12.0% 28.0%
2 Mega Caps 4.0% 7.0% 12.0% 18.0% 22.0% 4 11.0% 33.0%
3 Micro Caps 6.0% 6.0% 11.0% 18.0% 18.0% 4 15.0% 26.0%
4 Large Caps 4.0% 7.0% 12.0% 18.0% 22.0% 4 12.0% 39.0%
5 Mid Caps 4.0% 7.0% 12.0% 18.0% 20.0% 4 12.0% 30.0%
6 Nano Caps 5.0% 7.0% 10.0% 14.0% 12.0% 3 20.0% 23.0%
FATI® S&G Index 3.97%

FATI ® Sector Rankings

Sector 1 Mth 3 Mth 6 Mth 9 Mth 12 Mth RSR % Groups Up % Groups Dwn YTD Return
Basic Materials 9% 15% 27% 27% 24% 7 20.0% 40.0%
Oil & Energy 13% 14% 17% 11% 2% 7 0.0% 42.0%
Construction 6% 16% 23% 28% 32% 6 0.0% 0.0%
Industrial Products 8% 9% 15% 26% 23% 5 16.0% 33.0%
Retail/Wholesale 4% 15% 14% 13% 11% 5 0.0% 50.0%
Aerospace 5% 6% 18% 33% 35% 5 0.0% 0.0%
Auto/Tire 7% 6% 19% 33% 29% 5 0.0% 100.0%
Transportation 7% 10% 14% 19% 18% 5 0.0% 0.0%
Business Services 6% 5% 9% 8% 4% 4 0.0% 0.0%
Consumer Discretionary 2% 9% 12% 19% 22% 3 50.0% 0.0%
Medical 5% 7% 8% 22% 27% 3 0.0% 66.0%
Multi-Conglomerates 4% 6% 9% 20% 17% 3 0.0% 100.0%
Computer/Tech 3% 5% 10% 22% 27% 2 0.0% 28.0%
Finance 2% 3% 7% 12% 12% 2 0.0% 71.0%
Consumer Staples  0% 6% 5% 8% 12% 2 0.0% 33.0%
Utilities -4% -4% 1% 3% 7% -1 50.0% 50.0%
FATI® S&G Index 3.97%

Long Trades

Ticker %Chg EPS F1 EPS Grth % F1 EPS Grth % F2 # Anlst in F1  Con. Est. P/E using  F1 Est Mkt Cap Millions FATI Score Next EPS Report Date
Market
SPX 0 37.4 48.22 2 19.08 0.97
Large Cap
MFC 3.55 38.78 44.22 5 10.69 $43,159 3.6 20180207
PFG 5.29 29.82 38.83 3 12.56 $21,428 1.7 20180129
RGA 13.52 26.31 36.11 3 13.34 $10,561 1.57 20180129
Mid Caps
EWBC 10.18 42.5 56.13 9 15.91 $9,731 4.87 20180125
KAR 1.96 26.09 46.36 8 20.51 $7,206 4.44 20180220
SNV 17.19 69.04 78.28 10 15.23 $6,090 4.37 20180123
MTG 18.8 45.2 61.28 4 10.52 $5,603 4.11 20180118
FII 22.19 34.98 37.93 4 12.83 $3,546 3.29 20180125
FCFS 2.76 33.71 55.12 4 21.59 $3,324 1.9 20180201
PLCE 4.34 44.84 57.02 4 20.13 $2,755 0.3 20180314
ONB 6.71 23.65 37.78 6 14.17 $2,494 4.06 20180123
FCB 14.77 59.67 89.27 4 15.18 $2,446 3.66 20180123
TRMK 12.15 28.97 36.28 4 15.4 $2,288 2.8 20180123

Short Trades

Ticker %Chg EPS F1 EPS Grth % F1 EPS Grth % F2 # Anlst in F1  Con. Est. P/E using  F1 Est Mkt Cap Millions FATI Score Next EPS Report Date
Market
SPX 0 37.4 48.22 2 19.08 0.97
Mid Caps
KEX -3.47 -8.47 4.96 5 31.19 $4,465 6.8 20180131
Small Caps
EGOV -1.25 -5.95 -9.52 4 22.09 $1,156 3.43 20180131

GREEN – Favored Stock
RED – EPS Report ALERT

FATI Score – Measures the dispersion of earnings estimates of analysts. The lower the score the the lower the earnings uncertainty. Scores of 12 or lower are only considered for long trades.

 

Recent Featured Recommendations

Rec. Date Ticker LONG / SHORT % G/L S&P 500 % +/- S&P 500 H/L Price Target Price 8% Stop Price Next EPS Date
1/5/18 MAS $44.46 3.49% 1.55% 1.94% $46.01 $48.91 $40.90 2/8/18
1/12/18 RGA $163.65 0.00% 0.00% 0.00% $163.65 $180.02 $150.56 1/29/18

YELLOW – Target Attained