Latest news with #earningsgrowth
Yahoo
17 hours ago
- Business
- Yahoo
The 'Magnificent 7' are outperforming other stocks again — here's why
The S&P 500 (^GSPC) just logged its best May in more than 30 years in large part due to the return of dominance from the "Magnificent Seven" tech stocks. Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia (NVDA) combined for 62% of the S&P 500's advance in May. Nvidia and Tesla led the gains, rising more than 20% in the month. Overall, six of the seven stocks outperformed the S&P 500's 6.2% gain for May, with Apple ending the month as the lone laggard. DataTrek Research co-founder Nicholas Colas wrote in a note to clients that Big Tech's recent outperformance shows "this important slice of the US equity market has genuine momentum." "The fact that capital is rotating back into US large cap Tech/Big Tech is further proof that the market has finally found its footing," he added. There are several factors that have been driving these stocks higher. But perhaps chief among them is that Big Tech continues to churn out stronger earnings growth than the rest of the S&P 500. In the recently reported first quarter, the Magnificent Seven group of stocks grew earnings by a combined 27.7% compared to the same quarter a year ago, well above the 9.4% growth seen from the other 493 members of the index, per FactSet senior earnings analyst John Butters. The Big Tech companies surprised analysts more too. In aggregate, Magnificent Seven earnings growth beat Wall Street's estimates by 11.7%, compared to the 4.6% beat for the other 493 companies. Citi US equity strategist Drew Pettit told Yahoo Finance that this helps explain why the Magnificent Seven have been outperforming other stocks amid the run higher in the market over the past month. The Roundhill Magnificent Seven ETF (MAGS) has risen about 11% over the past month, roughly doubling the S&P 500's percentage return in that same time period. "With the tariff concern and some of the macro hesitancy, like investment hesitancy and buying hesitancy, you're back to growth," Pettit said. "When valuations aren't cheap versus history for anything, might as well go to the place that's got some [earnings] upside." Read more: How to protect your money during economic turmoil, stock market volatility Charles Schwab senior investment strategist Kevin Gordon pointed out that Big Tech also led the market lower during the sell-off that began in late February and carried through April. "Tech and the Magnificent Seven, in general, got hit the hardest," Gordon said. "So it's not surprising to see them bounce the hardest as well." Another reason for the Magnificent Seven's surge is that investors have favored large-cap stocks in the most recent market rally. When investors are concerned about a rise in bond yields, as has been the case over the past several weeks with the 30-year Treasury yield (^TYX) briefly pressing near levels not seen since the great financial crisis, large-cap stocks have outperformed. This has Pettit and the strategy team continuing to describe a preference toward a "growth is defensive trade." He said as long as rates stay elevated and the 10-year Treasury yield (^TNX) hasn't fallen closer to 4%, "there's only one game in town," and it's growth. Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
2 days ago
- Business
- Bloomberg
Why the S&P 500 Is Cruising Through Policy Upheaval
If you are wondering why the S&P 500 Index has held up so well in the past two months, look no further than the technology and communications sectors, which collectively account for nearly half of the index by weighting. For all the wild and headline-grabbing swings in trade policy since early April, analysts have continued to project more than 14% earnings growth in those combined sectors this year — an outlook that really hasn't budged. Wall Street isn't ignoring the potential risks from tariffs and a consumer slowdown, analysts just think that America's innovation superstars will partially offset any damage. And reasonably so. Artificial intelligence posterchild Nvidia Corp. said Wednesday that it had $44.1 billion in revenue in the latest quarter, up an extraordinary 69% from a year earlier. Microsoft Corp., the index's biggest company by weighting, posted a 20% increase in cloud revenue last quarter, showing why its software-heavy model leaves it relatively insulated from tariffs. And Netflix Inc., which successfully hiked subscription prices recently, said revenue jumped 12.5%, reaffirming the resilience of its business model.
Yahoo
3 days ago
- Business
- Yahoo
Investing in Servcorp (ASX:SRV) five years ago would have delivered you a 204% gain
When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For instance, the price of Servcorp Limited (ASX:SRV) stock is up an impressive 125% over the last five years. It's also up 15% in about a month. So let's assess the underlying fundamentals over the last 5 years and see if they've moved in lock-step with shareholder returns. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. Over half a decade, Servcorp managed to grow its earnings per share at 9.9% a year. This EPS growth is slower than the share price growth of 18% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth. You can see below how EPS has changed over time (discover the exact values by clicking on the image). It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. It might be well worthwhile taking a look at our free report on Servcorp's earnings, revenue and cash flow. As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Servcorp the TSR over the last 5 years was 204%, which is better than the share price return mentioned above. This is largely a result of its dividend payments! It's good to see that Servcorp has rewarded shareholders with a total shareholder return of 46% in the last twelve months. And that does include the dividend. That gain is better than the annual TSR over five years, which is 25%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Servcorp you should be aware of. If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: most of them are flying under the radar). Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Australian exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
4 days ago
- Business
- Yahoo
US Foods Seeing Inflows
USFD is a food distributor, offering frozen and dry food and non-food products to over 250,000 customers throughout the U.S. The company operates multiple food brands and has more than 160 in-person locations for customers to shop. In addition to food, the company also offers its customers e-commerce, technology, and business solutions. As for earnings, USFD's first-quarter fiscal 2025 report showed adjusted EBITDA growing over 9% and adjusted diluted per-share earnings increasing 26%. Net sales jumped by 4.5%, to $9.4 billion. Also, USFD grew its business across its portfolio, including growth in total case volume, independent restaurants, health care, and hospitality. Also, the company authorized a share repurchase program of $1 billion. It's no wonder USFD shares are up 16% this year – and they could rise more. MoneyFlows data shows how Big Money investors are betting heavily on the forward picture of the stock. Institutional volumes reveal plenty. In the last year, USFD has enjoyed strong investor demand, which we believe to be institutional support. Each green bar signals unusually large volumes in USFD shares. They reflect our proprietary inflow signal, pushing the stock higher: Plenty of discretionary names are under accumulation right now. But there's a powerful fundamental story happening with US Foods. Institutional support and a healthy fundamental backdrop make this company worth investigating. As you can see, USFD has had strong sales and earnings growth: 3-year sales growth rate (+8.8%) 3-year sales EPS rate (+63.4%) Source: FactSet Also, EPS is estimated to ramp higher this year by +19.3%. Now it makes sense why the stock has been powering to new heights. USFD has a track record of strong financial performance. Marrying great fundamentals with our proprietary software has found some big winning stocks over the long term. US Foods has been a top-rated stock at MoneyFlows. That means the stock has unusual buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis. It's made the rare Outlier 20 report multiple times in the last nine years. The blue bars below show when USFD was a top pick…rising with Big Money support: Tracking unusual volumes reveals the power of money flows. This is a trait that most outlier stocks exhibit…the best of the best. Big Money demand drives stocks upward. The USFD rally isn't new at all. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio. Disclosure: the author holds no position in USFD at the time of publication. If you are a Registered Investment Advisor (RIA) or are a serious investor, take your investing to the next level and follow our free weekly MoneyFlows insights. This article was originally posted on FX Empire Monster's Comeback Continues Product Performance, Big Money Lift Exelixis US Public Debt Trajectory and Interest Payments Set to Worsen and Exceed Sovereign Peers Market Outlook: Crypto Trading Urban Outfitters Seeing Inflows Should You Invest in European Stocks Now? Sign in to access your portfolio
Yahoo
4 days ago
- Business
- Yahoo
Those who invested in Daldrup & Söhne (ETR:4DS) five years ago are up 409%
Long term investing can be life changing when you buy and hold the truly great businesses. While not every stock performs well, when investors win, they can win big. Don't believe it? Then look at the Daldrup & Söhne Aktiengesellschaft (ETR:4DS) share price. It's 409% higher than it was five years ago. This just goes to show the value creation that some businesses can achieve. Also pleasing for shareholders was the 27% gain in the last three months. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report. So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. During the five years of share price growth, Daldrup & Söhne moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains. Given that the company made a profit three years ago, but not five years ago, it is worth looking at the share price returns over the last three years, too. We can see that the Daldrup & Söhne share price is up 90% in the last three years. During the same period, EPS grew by 47% each year. This EPS growth is higher than the 24% average annual increase in the share price over the same three years. So you might conclude the market is a little more cautious about the stock, these days. You can see how EPS has changed over time in the image below (click on the chart to see the exact values). It is of course excellent to see how Daldrup & Söhne has grown profits over the years, but the future is more important for shareholders. This free interactive report on Daldrup & Söhne's balance sheet strength is a great place to start, if you want to investigate the stock further. It's good to see that Daldrup & Söhne has rewarded shareholders with a total shareholder return of 35% in the last twelve months. However, the TSR over five years, coming in at 38% per year, is even more impressive. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 2 warning signs for Daldrup & Söhne that you should be aware of before investing here. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on German exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
