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The Zacks Analyst Blog Highlights: China Petroleum & Chemical, Canon, PetroChina, POSCO and Wipro

Zacks Equity Research
Nordic American Tankers (NAT) needs investors to pay close attention to the stock based on moves in the options market lately.

For Immediate Release

Chicago, IL – November 10, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include China Petroleum & Chemical Corporation SNP, Canon Inc. CAJ, PetroChina Co. Ltd. PTR, POSCO PKX and Wipro Limited WIT.

Here are highlights from Thursday’s Analyst Blog:

5 Stocks to Buy as Asian Markets Flirt with Record Highs

On Nov 9, Asia’s stocks gave up some of their early gains after breaching a decade-old record, early in the trading session. The Nikkei 225 also raced passed its highest level in nearly 25 years before ending the day lower, likely due to profit taking. Despite a slightly underwhelming outcome for Asia’s markets by the end, the day’s events still serve to illustrate the strength in the region’s equities.

A combination of factors, including rapid improvement in the global economy, encouraging earnings and soft monetary policies has been boosting Asia’s stocks over the current year. Given that most of these factors remain in place, it makes good sense to bet on stocks from Asia at this time.

Earnings Growth, Global Economic Recovery Powering Asia’s Stocks

During the year, key economies across the world. The largest contributions have come from tech stocks, with the likes of Alibaba and Tencent providing the biggest impetus to the MSCI Asia Pacific Index. The index briefly broke above the record set during November 2007, before closing the day only 0.2% higher.

Even so, the index is still up 27.2% year to date, ahead of several of the world’s key benchmarks. For instance, the S&P 500 has gained around 16% during the same period while the STOXX 600 has increased nearly 20% in U.S. dollar terms.

Further, the recovery in developed economies has benefited the export oriented countries of Asia. According to Bloomberg, companies listed on the MSCI Asia Pacific index are projected to post average earnings growth of 13% during the current quarter. This is nearly twice as much as projections for the S&P 500, despite the fact that the index has breached several milestones this year.

Hang Seng, Kospi, Nikkei Among Region’s Big Winners

The Nikkei 225 briefly moved above the 23,000 mark for the first time in 25 years before ending the day 0.2% lower. Encouraging earnings results and a resilient economy have helped Japan’s benchmark index breach multiple records over this year. The softening of the Yen and prime minister Abe’s resounding victory in the recently held snap poll have added to the factors powering the index consistently higher. Meanwhile, other benchmarks across the region, ranging from India to South Korea are also lingering close to record levels.

On Tuesday, the S&P/ASX 200, Australia’s benchmark index, moved above 6,000 for the first time since the beginning of the 2008 crisis. Additionally, Hong Kong’s Hang Seng is up nearly 33% year to date and has emerged as Asia’s best performing index. Meanwhile, South Korea’s benchmark Kospi index has gained 26% year to date.

Our Choices

Despite temporary reverses, Asia’s stocks have had an exceedingly good run this year. A global economic revival has powered strong earnings growth which has helped the region’s indexes set multiple records over this period.

Investing in Asia’s stocks represents a profitable opportunity at this point. However, picking winning stocks may be difficult.

This is where our VGM score comes in. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM score.

We have narrowed down our search to the following stocks based on a good Zacks Rank and VGM score.

China Petroleum & Chemical Corporation (SNP) or Sinopec with its head office in Beijing, China, is one of the largest petroleum and petrochemical companies in Asia.

Sinopec has a Zacks Rank #1 (Strong Buy) and a VGM Score of B. The company has expected earnings growth of 59.1% for the current year The Zacks Consensus Estimate for the current year has improved by 5.8% over the last 30 days.

Canon Inc. (CAJ) is an industry leader in professional and consumer imaging equipment and information systems. The company is based in Tokyo, Japan.

Canon has a VGM Score of B. The company has expected earnings growth of 49.9% for the current year. The Zacks Consensus Estimate for the current year has improved by 20.3% over the last 30 days. The stock has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

PetroChina Co. Ltd. (PTR) is the largest integrated oil company in China.

PetroChina has a Zacks Rank #2 (Buy) and a VGM Score of A. The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved by 7.3% over the last 30 days.

POSCO (PKX) is one of the largest steel producers in the world on the basis of output. The company is based in Pohang, South Korea.

POSCO has a Zacks Rank #2 and a VGM Score of A. The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved by 8.4% over the last 30 days.

Wipro Limited (WIT) is an information technology and consulting company with worldwide operations. The company is based in Bengaluru, India.

Wipro has a Zacks Rank #2 and a VGM Score of B. Its earnings estimate for the current year has improved by 1.3% over the last 30 days.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.


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