For those looking to find strong Retail-Wholesale stocks, it is prudent to search for companies in the group that are outperforming their peers. Herbalife Ltd (HLF) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Retail-Wholesale peers, we might be able to answer that question.
Herbalife Ltd is one of 210 companies in the Retail-Wholesale group. The Retail-Wholesale group currently sits at #12 within the Zacks Sector Rank. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst.
The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. Herbalife Ltd is currently sporting a Zacks Rank of #2 (Buy).
The Zacks Consensus Estimate for HLF's full-year earnings has moved 2.4% higher within the past quarter. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.
Based on the latest available data, HLF has gained about 31.7% so far this year. At the same time, Retail-Wholesale stocks have lost an average of 2.6%. As we can see, Herbalife Ltd is performing better than its sector in the calendar year.
Alibaba (BABA) is another Retail-Wholesale stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 56.5%.
For Alibaba, the consensus EPS estimate for the current year has increased 6.4% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Looking more specifically, Herbalife Ltd belongs to the Retail - Pharmacies and Drug Stores industry, which includes 2 individual stocks and currently sits at #3 in the Zacks Industry Rank. This group has gained an average of 20.6% so far this year, so HLF is performing better in this area.
On the other hand, Alibaba belongs to the Internet - Commerce industry. This 37-stock industry is currently ranked #75. The industry has moved -3.5% year to date.
Going forward, investors interested in Retail-Wholesale stocks should continue to pay close attention to Herbalife Ltd and Alibaba as they could maintain their solid performance.
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This article originally published on Zacks Investment Research (zacks.com).
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