Charles Schwab, Barrick Gold, Broadcom, Braskem S.A. and Campbell Soup highlighted as Zacks Bull and Bear of the Day

For Immediate Release

Chicago, IL – January 17, 2017 –Zacks Equity Research highlights Charles Schwab Corporation ( NYSE:SCHW – Free Report ) as the Bull of the Day and Barrick Gold ( NYSE:ABX – Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Broadcom Limited (NASDAQ: AVGO – Free Report ), Braskem S.A. (NYSE: BAK – Free Report ) and Campbell Soup Company (NYSE: CPB – Free Report ).

Here is a synopsis of all five stocks:

Bull of the Day :

The Charles Schwab Corporation ( NYSE:SCHW – Free Report ) is a $55 billion investment services firm with $2.73 trillion in client assets. The firm's evolution from a discount broker to a full-service wealth management institution explains that enormous asset base.

Schwab looks poised for 26% EPS growth this year based on rising analysts earnings estimates. And the 15.6% revenue growth estimate fueling those projected profits is probably a big part of the reason shares are pushing highs not seen since the year 2000.

Wall Street analysts are forecasting that the broker to hit a record $8.66 billion on the top line this year. That math is driven by three factors: interest rates, deregulation, and the natural climb in trading accounts and volume in a strong bull market.

Financial Sector Takes Flight

The financial sector definitely got a face lift since the election for two obvious reasons. First, the yield curve steepened as long-term Treasuries sold off fast and furious.

And this rise in interest rates is generally good for banks and other financial institutions who benefit from a greater net interest margin on their borrowing and lending activities.

Second, there was the overwhelming sense that the new administration would do serious damage to financial regulations like Dodd-Frank, thus clearing the way for unencumbered dealings between investment banking and commercial banking, as well as the removal of other shackles.

Since the election, while the broad S&P 500 index is up just over 6%, the financial sector as represented by the SPDR ETF (XLF ) is up nearly 18%.

Banks big and small have lead the charge for the most part for the two benefits mentioned.

Brokers Make Bank

But did you know that investment broker-dealers also benefit from rising yields? That's because in addition to income from stock lending and margin interest, they hold lots of assets in customer cash balances that they can earn interest on every night.

For the brokers, it also helps that the strong bull market is making new all-time highs and driving more stock trading commissions and newly funded accounts.

Bear of the Day :

The last time I picked on a gold miner was January 5 when my target was Randgold. Today it's Barrick Gold ( NYSE:ABX – Free Report ) whose 2017 EPS estimates have fallen 10% in the past 60 days from $1.02 to $0.91, pushing the stock into the cellar of the Zacks Rank.

And only two weeks ago the Zacks Industry Rank for the gold miners was in the bottom 24% at #201 out of 265. Today, that industry rank has dropped to the bottom 11% at #239, with other names likeNewmont Mining,Goldcorp and Anglogold Ashanti joining the chorus of Zacks #5 Rank Strong Sells.

As I wrote in early January...

It's no surprise that gold miner earnings and shares should have taken a breather from their terrific rally in the first half of 2016 as the price of the yellow metal, as measured by the SPDR Gold Shares ETF (GLD), started topping this summer and dropping this autumn.

What may be a surprise for gold investors is if the drop continues as interest rates rise and the dollar pushes higher.

But longer term, gold may not have fully lost its luster. If gold prices stabilize around $1200, as many investment bank forecasts project, then demand for the barbarous relic could remain steady as a store of diversification, if not value, and a hedge against any given currency.

Several miners will eventually be in demand themselves in this case as their costs of production are much lower than $1200. For some, gross margins are in the high double digits.

The Rank Is Short-Term

If gold cannot recover the $1200 level, this will continue to be reflected in the Zacks Rank for the miners as their EPS estimates should continue to fall.

So if you are in the market for gold's diggers, watch their costs and their earnings trajectory. The Zacks Rank will keep you informed on the latter.

Additional content:

3 ROE Stocks to Buy Before Trump Takes Office

As Donald Trump is set to take the oath for the U.S. Presidency later this week, the equity market is poised to continue the second longest bull run in history. Focusing on 2017, the equity markets are likely to be in cruise control as the sweeping policy changes proposed by Trump take effect with Fed’s interest rate hike. However, investors remain skeptic about the bullish prospects and anticipate higher inflation to hit the markets sooner than later.

Amid such an equivocal scenario, investors are often on the lookout for ‘cash cow’ stocks that will enable them to rake in higher returns.

However, singling out cash-rich stocks alone does not make for a solid investment proposition unless they are backed by attractive efficiency ratios like return on equity (ROE). A high ROE ensures that the company is reinvesting its cash at a high rate of return.

ROE: A Key Metric

ROE = Net Income/Shareholders’ Equity

ROE helps investors distinguish between profit-generating companies from profit burners and is useful for determining the financial health of a company. In other words, this financial metric enables investors to identify stocks that diligently deploy cash for higher returns.

Moreover, ROE is often used to compare the profitability of a company with other firms in the industry – the higher, the better. It measures how well a company is increasing its profits without investing new equity capital in the business and portrays management efficiency in rewarding shareholders with attractive risk-adjusted returns.

Screening Parameters

In order to shortlist stocks that are cash rich with high ROE, we have added Cash Flow greater than $1 billionand ROE greater than X-Industry as our primary screening parameters. In addition, we have taken a few other criteria into consideration to arrive at a winning strategy.

Price/Cash Flow less than X-Industry: This metric measures how much investors pay for one dollar of free cash flow. A lower ratio indicates that investors need to pay less for a better cash flow generating stock.

Return on Assets (ROA) greater than X-Industry: This metric determines how much profit a company earns for every dollar of asset, which includes cash, accounts receivable, property, equipment, inventory and furniture. Of course, the higher the ROA, the better.

5-Year EPS Historical Growth greater than X-Industry: This criterion indicates that continued earnings momentum has translated into solid cash strength.

Zacks Rank less than or equal to 2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform irrespective of the market environment.

Here are five of the nine stocks that qualified the screen:

Broadcom Limited (NASDAQ:AVGO – Free Report ) : Based in Singapore, Broadcom Limited is a premier designer, developer and global supplier of a broad range of analog semiconductor devices as well as digital, mixed-signal and optoelectronics components and subsystems. This Zacks Rank #1 stock has a trailing four-quarter average earnings surprise of 6.4% and long-term earnings growth expectation of 13.6%.

Braskem S.A. (NYSE:BAK – Free Report ) : Braskem is the leading thermoplastic resins (polyethylene, polypropylene and PVC) producer in the Americas and the largest producer of polypropylene in the U.S. This Zacks Rank #1 stock has a trailing four-quarter average earnings surprise of 107.8%. You can see the complete list of today’s Zacks #1 Rank stocks here .

Campbell Soup Company (NYSE:CPB – Free Report ) : Based in Camden, NJ, Campbell is a worldwide manufacturer and marketer of high-quality, branded convenience food products. The stock has modest long-term earnings growth expectation of 5.6%. Campbell carries a Zacks Rank #2.

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About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

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The Charles Schwab Corporation (SCHW): Free Stock Analysis Report
 
Barrick Gold Corporation (ABX): Free Stock Analysis Report
 
Broadcom Limited (AVGO): Free Stock Analysis Report
 
Braskem S.A. (BAK): Free Stock Analysis Report
 
Campbell Soup Company (CPB): Free Stock Analysis Report
 
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