The week saw the Federal Reserve raise interest rates by 0.75 percentage points for the second consecutive time to fight inflation, but the market reacted positively when Fed Chairman Jerome Powell tried to strike a warmongering/dovish balance.
Meanwhile, Frontier won by missing out on an acquisition of Spirit, and earnings became the deciding factor for this week’s list decliners.
For the week ending July 30, 10 of the 11 S&P 500 sectors gained. The SPDR S&P 500 Trust ETF (SPY) was in the green for the second consecutive week (+4.28%). However, since the beginning of the year, the ETF is -13.26%. The Industrial Select Sector SPDR (XLI) also recorded gains (+5.74%) for the second consecutive week. Since the start of the year, XLI has been in the red -9.61%.
The top five gainers in the industrials sector (stocks with a market capitalization of over $2 billion) all gained more than +22% everyone this week. However, since the beginning of the year, only one of these five titles is in the green.
Frontier Group (NASDAQ:ULCC) +30.22%. Frontier stock jumped +20.50% on July 28 after JetBlue announced an agreement to buy Spirit Airlines for $3.8 billion. The day before, Spirit had terminated its merger agreement with Frontier. On the same day, Frontier also released its quarterly results, which saw first-quarter revenue beat analysts’ estimates. SA contributor Dhierin Bechai wrote that Frontier’s results were hit by higher-than-expected costs.
The SA quantitative rating on stocks is Buy, which takes into account factors such as valuation and profitability, among other things. The average Wall Street analyst rating is also Buy, where 3 out of 6 analysts rate the stock as Strong Buy. Since the beginning of the year, the stock is on the rise +6.71%the only one in this week’s top five to be in the green for that span.
Still Wire (WIRE) +26.65%. The Texas-based company’s stock gained throughout the week, the most on July 26 +10.61%, the day after the release of second-quarter results. The stock hit its highest level in six weeks, as revenue rose +12.6% year-on-year. Both the SA Quantitative Rating and the Average Wall Street Analyst Rating have a strong Buy rating on the stock. Since the beginning of the year, the title has fallen -3.24%.
The chart below shows the year-to-date price-yield performance of the top five winners and the SP500:
Ameresco (CDMA) +26.06%. The Framingham, Mass.-based renewable energy solutions provider earned the most on July 28 (+10.72%) this week. However, the stock was among the five worst performers in Q2 (-44%) and since the beginning of the year, has lost -29.74%. The quantitative SA rating on the stock is Hold, with profitability having a D-factor rating and growth with an A-factor rating. The rating contrasts with the average Wall Street analyst buy rating, in which 8 analysts on 12 qualify it as a strong buy.
Enovix (ENVX) +23.56%. The Fremont, Calif.-based lithium-ion battery maker’s stock was back among the top five gainers after two months. Stocks rose the most on July 29 (+12.31%), but since the beginning of the year, more than 50% of the value of the shares has been wiped out (-51.17%). The SA quantitative rating on the stock is Hold, with profitability having a D-factor rating and valuation with an F-factor rating. However, the average Wall Street analyst rating differs and gives the stock a rating of strong buy, with an average price target of $24.75.
Bloom Energy (BE) +22.46%. The San Jose, Calif.-based company, which provides a power generation platform, soared among solar and green energy stocks after Sen. Joe Manchin and Majority Leader Chuck Schumer announced a surprise deal including $369 billion for “energy and climate change”. The average Wall Street analyst rating on BE is buy, which contradicts a quantitative SA rating of hold. Since the beginning of the year, the title has fallen -7.75%.
This week’s top five declines among industrial stocks (market cap over $2 billion) all lost more than -ten% each. Since the start of the year, four of these five stocks have been in the red.
Ascending work (NASDAQ:UPWK) -17.95%. The Santa Clara, Calif.-based company that provides an online job market saw its shares tumble on July 28 (-16.68%) a day after its Q2 despite a Q2 beaten on ambiguous prospects. The stock was in the top five declines two weeks ago, but was among the top 5 gainers (in this segment) for June.
The quantitative SA rating on the stock is Hold, with profitability having a factor rating of D+ while valuation has a factor rating of F. The rating contrasts with the average buy rating from Wall Street analysts, in which 4 out of 11 analysts give is a strong buy rating. YTD, UPWK had declined -45.67%.
Stanley Black & Decker (SWK) -15.88%. SWK fell after second-quarter results missed analysts’ expectations, and the New Britain, Connecticut-based company cut its FY22 outlook and announced the implementation of a program cost-cutting aimed at saving $1 billion by the end of 2023. Year-to-date, the stock has fallen -48.40%.
The SA quantitative rating on the stock is Sell, with Profitability having a D+ factor rating and Momentum having a D- factor rating. The average Wall Street analyst rating differs and marks it as buy, in which 6 out of 19 analysts give the stock a strong buy rating.
The chart below shows the year-to-date price-yield performance of the five worst declines and XLI:
Hayward (HAYW) -13.81%. The Berkeley Heights, New Jersey-based pool equipment maker was on the denial list for the second week in a row. HAYW fell after second-quarter revenue and GAAP EPS missed analysts’ estimates. Since the beginning of the year, the stock has lost -55.51%, the most among the five worst this week. The average Wall Street analyst rating is Buy, which contrasts with Hold’s SA Quant Rating.
Trans Union (TRU) -10.43%. Shares of the Chicago-based company were also hit by disappointing quarterly results. Second-quarter revenue fell short of analysts’ expectations and TransUnion guided its third-quarter and fiscal 22 outlook below consensus. The company, which provides risk and information solutions, also saw a downgrade from BofA Securities over similar concerns. Since the beginning of the year, the title has fallen -33.18%. The quantitative SA rating on TRU is Hold, different from the average Wall Street analyst buy rating.
FTI Council (FCN) -10.16%. The stock lost -9.05% on July 28 after second-quarter adjusted EPS missed estimates, despite revenue beating expectations. However, since the beginning of the year, the title has won +6.61%, the only one among this week’s decliners to be in the green for this period. The Washington, DC-based company was the best-performing industrial stock (in this segment) in the second quarter. The average Wall Street analyst rating is Strong Buy, while the SA Quant rating is Buy.