CLMB or QXO: Which Is the Better Value Stock Right Now?

The S&P 500 Index today is down -0.16%, the Dow Jones Industrials Index is down -0.09%, and the Nasdaq 100 Index is down -0.30%.

Stocks today are mostly lower on some profit-taking as today’s strength in US economic news may keep the Fed from aggressively cutting interest rates. Also, long liquidation ahead of this afternoon’s speech from Fed Chair Powell is weighing on stock prices. The 10-year T-note yield rose to a 4-1/2 month high today before turning lower after weekly initial unemployment claims fell more than expected to a 5-1/2 month low, and October producer prices rose more than expected, hawkish factors for Fed policy.

Some positive corporate news today is bullish for stocks. Walt Disney is up more than +10% after reporting better-than-expected Q4 adjusted EPS and raising its adjusted EPS growth forecast for fiscal 2025. Also, chip stocks are climbing today after ASML Holding NV affirmed its long-term guidance. In addition, airline stocks are moving higher today, as Barclays said a convergence in improving fundamentals and investor sentiment may drive a “powerful” rally for airline stocks next year.

US weekly initial unemployment claims fell -4,000 to a 5-1/2 month low of 217,000, showing a stronger labor market than expectations of 220,000.

US Oct PPI final demand rose +2.4% y/y, stronger than expectations of +2.3% y/y. Oct PPI ex-food and energy rose +3.1% y/y, stronger than expectations of +3.0% y/y.

Stocks have rallied sharply over the past week, with the S&P 500, Dow Jones Industrials, and the Nasdaq 100 posting new record highs on speculation President-elect Trump will boost corporate profits through tax cuts and reduced regulation.

The markets are looking ahead to today’s comments from Fed Chair Powell, who will speak on the economic outlook this afternoon at an event at the Dallas Fed. Also, Friday’s report on retail sales will be looked at to see if consumer spending is holding up. Oct retail sales are expected to be up +0.3% m/m, and Oct retail sales ex-autos are also expected to be up +0.3% m/m. In addition, the Q3 earnings season is wrapping up, with more than 50 companies scheduled to report quarterly results this week.

Of the 85% of companies in the S&P 500 that have released Q3 earnings so far, 75% surpassed the estimates, slightly below the 3-year average. According to Bloomberg Intelligence, companies in the S&P 500 have reported an average +8.4% y/y increase in quarterly earnings in Q3, more than double the preseason forecast.

The markets are discounting the chances at 82% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets today are mixed. The Euro Stoxx 50 is up +1.88%. China's Shanghai Composite Index closed down -1.73%. Japan's Nikkei Stock 225 fell to a 1-week low and closed down -0.48%.

Interest Rates

December 10-year T-notes (ZNZ24) today are up +7 ticks. The 10-year T-note yield is down -2.6 bp to 4.426%. Dec T-notes today recovered from a 4-1/2 month low and moved higher, and the 10-year T-note yield fell back from a 4-1/2 month high of 4.481%. Short covering emerged in T-notes today on carryover strength in German bunds after the dovish account of the ECB’s Oct 16-17 policy meeting sparked a rally in 10-year German bunds.

T-notes today initially moved lower on US economic news that showed Oct producer prices rose more than expected, and after weekly jobless claims fell more than expected to a 5-1/2 month low, hawkish factors for Fed policy. Also, anticipation that President-elect Trump’s pro-growth policies could quicken inflation continues to weigh on T-note prices.

European government bond yields today are mixed. The 10-year German bund yield is down -3.5 bp to 2.355%. The 10-year UK gilt yield is down -2.5 bp to 4.495%.

Eurozone Sep industrial production fell -2.0% m/m, weaker than expectations of -1.4% m/m and the biggest decline in 8 months.

ECB Vice President Guindos said the economic "recovery we were anticipating in the Eurozone is not happening with the intensity we expected."

The account of the ECB's Oct 16-17 meeting was seen as dovish as policymakers see inflation continuing to decline, saying "there was wide agreement that the incoming data since the September meeting had increased confidence in an ongoing disinflation process and that inflation would converge to the medium-term target."

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 28% for a -50 bp rate cut at the same meeting.

US Stock Movers

Super Micro Computer is down more than -12% to lead losers in the S&P 500 and Nasdaq 100 after the company delayed another quarterly 10-Q filing as it continue to search for a new accounting firm.

Cisco Systems is down more than -1% after forecasting 2025 revenue of $55.3 billion-$56.3 billion, the midpoint below the consensus of $55.88 billion.

Capri Holdings is down more than -3% after announcing it mutually agreed to terminate its merger with Tapestry.

Ibotta is down more than -13% after forecasting Q4 revenue of $100 million-$106 million, below the consensus of $1110.38 million.

Tetra Tech is down more than -6% after forecasting 2025 net revenue of $4.57 billion-$4.77 billion, the midpoint below the consensus of $4.68 billion.

Kilroy Realty is down more than -1% after Scotiabank downgraded the stock to underperform from sector perform with a price target of $38.

Walt Disney is up more than +10% to lead gainers in the S&P 500 and Dow Jones Industrials after reporting Q4 adjusted EPS of $1.14, above the consensus of $1.10, and said it sees high-single-digit adjusted EPS growth in fiscal 2025, above the consensus of +4%.

Tapestry is up more than +10% after announcing it was ending a $8.5 billion planned merger with Capri Holdings Ltd due to US antitrust regulators’ objections.

Chip stocks are moving higher today after ASML Holding NV affirmed its long-term guidance and pledged “growing dividends and share buybacks.” As a result, ASML Holding NV is up more than +4% to lead gainers in the Nasdaq 100, and GlobalFoundries is up more than -2%. Also, Applied Materials , Lam Research , Qualcomm , Micron Technology , Marvell Technology , and Intel are up more than +1%.

Airline stocks are climbing today after Barclays said a convergence in improving fundamentals and investor sentiment may drive a “powerful” rally for airline stocks next year. As a result, American Airlines Group , Alaska Air Group , Delta Air Lines , and United Airlines Holdings are up more than +1%.

Charles Schwab is up more than +3% after reporting core new net assets brought to the company by new and existing clients for October was $24.6 billion.

CNH Industrial NV is up more than +6% after activist investor David Einhorn revealed a new position in the company.

Beazer Homes USA is up more than +16% after reporting Q4 revenue of $806.2 million, stronger than the consensus of $777.8 million.

QXO Inc is up more than +2% after Finepoint Capital reported a position in the company that amounts to 6.3% of QXO’s outstanding shares.

Earnings Reports (11/14/2024)

Advance Auto Parts Inc (AAP), Applied Materials Inc (AMAT), Globant SA (GLOB), Post Holdings Inc (POST), Walt Disney Co/The (DIS).

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On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

Investors interested in Business Services stocks should always be looking to find the best-performing companies in the group. Climb Global Solutions (CLMB) 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 Business Services peers, we might be able to answer that question.

Climb Global Solutions is one of 307 individual stocks in the Business Services sector. Collectively, these companies sit at #5 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Climb Global Solutions is currently sporting a Zacks Rank of #1 (Strong Buy).

Over the past 90 days, the Zacks Consensus Estimate for CLMB's full-year earnings has moved 26.2% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.

Our latest available data shows that CLMB has returned about 121.7% since the start of the calendar year. In comparison, Business Services companies have returned an average of 27.2%. This means that Climb Global Solutions is performing better than its sector in terms of year-to-date returns.

Another Business Services stock, which has outperformed the sector so far this year, is Pentair plc (PNR). The stock has returned 46.2% year-to-date.

The consensus estimate for Pentair plc's current year EPS has increased 0.6% over the past three months. The stock currently has a Zacks Rank #2 (Buy).

Looking more specifically, Climb Global Solutions belongs to the Technology Services industry, which includes 164 individual stocks and currently sits at #64 in the Zacks Industry Rank. Stocks in this group have gained about 55.1% so far this year, so CLMB is performing better this group in terms of year-to-date returns.

Pentair plc, however, belongs to the Waste Removal Services industry. Currently, this 17-stock industry is ranked #204. The industry has moved +23.7% so far this year.

Going forward, investors interested in Business Services stocks should continue to pay close attention to Climb Global Solutions and Pentair plc as they could maintain their solid performance.

Zacks Investment Research

While "the trend is your friend" when it comes to short-term investing or trading, timing entries into the trend is a key determinant of success. And increasing the odds of success by making sure the sustainability of a trend isn't easy.

Often, the direction of a stock's price movement reverses quickly after taking a position in it, making investors incur a short-term capital loss. So, it's important to ensure that there are enough factors -- such as sound fundamentals, positive earnings estimate revisions, etc. -- that could keep the momentum in the stock going.

Our "Recent Price Strength" screen, which is created on a unique short-term trading strategy, could be pretty useful in this regard. This predefined screen makes it really easy to shortlist the stocks that have enough fundamental strength to maintain their recent uptrend. Also, the screen passes only the stocks that are trading in the upper portion of their 52-week high-low range, which is usually an indicator of bullishness.

There are several stocks that passed through the screen and

Climb Global Solutions

(CLMB) is one of them. Here are the key reasons why this stock is a solid choice for "trend" investing.

A solid price increase over a period of 12 weeks reflects investors' continued willingness to pay more for the potential upside in a stock. CLMB is quite a good fit in this regard, gaining 37.2% over this period.

However, it's not enough to look at the price change for around three months, as it doesn't reflect any trend reversal that might have happened in a shorter time frame. It's important for a potential winner to maintain the price trend. A price increase of 13% over the past four weeks ensures that the trend is still in place for the stock of this computer software reseller.

Moreover, CLMB is currently trading at 96.7% of its 52-week High-Low Range, hinting that it can be on the verge of a breakout.

Looking at the fundamentals, the stock currently carries a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises -- the key factors that impact a stock's near-term price movements.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here

Another factor that confirms the company's fundamental strength is its Average Broker Recommendation of #1 (Strong Buy). This indicates that the brokerage community is highly optimistic about the stock's near-term price performance.

So, the price trend in CLMB may not reverse anytime soon.

In addition to CLMB, there are several other stocks that currently pass through our "Recent Price Strength" screen. You may consider investing in them and start looking for the newest stocks that fit these criteria.

This is not the only screen that could help you find your next winning stock pick. Based on your personal investing style, you may choose from over 45 Zacks Premium Screens that are strategically created to beat the market.

However, keep in mind that the key to a successful stock-picking strategy is to ensure that it produced profitable results in the past. You could easily do that with the help of the Zacks Research Wizard. In addition to allowing you to backtest the effectiveness of your strategy, the program comes loaded with some of our most successful stock-picking strategies.

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Zacks Investment Research