Zacks Investment Ideas Highlights: Dell Technologies and Fair Isaac Corp

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For immediate release

Chicago, IL – February 11, 2022 – Zacks Investment Ideas features today features the following: Dell Technologies, Inc. DELL and Fair Isaac Corp. FICO.

Inflation and volatility: navigating this seesaw market

Major indexes opened sharply lower on Thursday on the heels of a worse-than-expected consumer price index (CPI). US inflation continued its steep ascent in January as prices for a wide range of goods and services soared amid ongoing supply chain issues and shortages. The indices managed to pare most of the losses from morning to midday.

This morning, the Bureau of Labor Statistics released its monthly CPI data point which showed an annual gain of 7.5%, beating the 7.3% rise predicted by leading economists. The gain represented the fastest pace for the inflationary measure dating back to 1982. The widely-watched gauge climbed 0.6% from December, reflecting a broad-based rise that included higher energy and food costs.

Even excluding more volatile food and energy prices, core CPI rose 6% in January from the same period a year ago, also marking a 40-year high.

During corrections, the market has a way of pulling investors back, only to prove the majority wrong and keep falling. I can’t count on two hands how many times I’ve seen the bottom was over the past two weeks. And while the bottom of this recent market move may have been hit in January, making these kinds of predictions is a fool’s game. We’ll leave that to the bottom fishers.

We will stick to the plan and identify key values ​​in this difficult environment. There are a lot of missteps in this market, and when they do, it is best to be cautious and limit any further trade initiation. It’s time to get more aggressive when investments are working and volatility remains calm – that’s not the case right now, as the popular VIX volatility indicator climbed 10% this morning.

The stock market is dynamic and things can change quickly, so we need to be prepared to change our outlook as new data comes in and things progress. Let’s take a look at two top stocks that are outperforming the market. Both stocks are part of the Zacks Computer and Technology sector, which ranks in the top 38% of all Zacks sectors.

Digging deeper, these stocks are contained within the Zacks Computers – Computer Services industry group, which is also ranked in the top 38% of all Zacks-ranked industries. Quantitative research studies have historically illustrated that approximately half of a stock’s future price appreciation is due to its industry group. By investing in stocks in the top 50% of all industries ranked by Zacks, we can significantly improve our investment success.

Dell Technologies, Inc.

Dell Technologies develops, markets and sells information technology solutions and products worldwide. DELL operates through three segments: Infrastructure Solutions Group (ISG), Client Solutions Group (CSG) and VMware. The Company’s ISG segment primarily provides storage solutions, servers and networking products. The CSG segment offers desktops, workstations, laptops, displays and projectors.

The VMware segment produces computing solutions for DELL’s diverse customer base, providing a cloud-based platform that enables its customers to gain strategic advantage. Dell Technologies was founded in 1984 and is based in Round Rock, TX.

DELL has an impressive track record of surprise earnings, beating estimates in every quarter for the past three years. The IT provider recently reported November Q3 EPS of $2.37, a surprise +1.72% from the consensus estimate of $2.33. DELL has delivered an average earnings surprise of +17.93% over the past four quarters, contributing to the stock’s 52.39% run over the past year.

What Zacks’ model reveals

The Zacks Earnings ESP (Expected Surprise Prediction) seeks to identify companies that have recently experienced positive earnings estimate revision activity. This technique has proven to be very useful. In fact, combining a No. 3 or higher Zacks ranking with a positive earnings ESP, stocks produced a positive surprise 70% of the time according to our 10-year backtest.

With a Zacks Rank #3 (Hold) and an Earnings ESP of +4.88%, another earnings beat could be in the cards for DELL when the company reports on February 24.and.

Even with last year’s price rally, DELL is trading at a relatively undervalued PER of 9.03 compared to the industry average (23.09). Looking to 2022, the Zacks consensus estimate shows analysts expecting EPS to rise 8.25% to $8.66. Sales are expected to increase 12.92% to $106.49 billion.

Just Isaac Corp.

Fair Isaac Corp. is a global developer of software, data management and analytics products that empower businesses to automate processes. The company operates in the Americas, Europe, the Middle East, Africa and Asia. FICO’s solutions and technologies for managing enterprise data enable its customers to increase sales, reduce fraud losses and manage risk more effectively.

FICO markets its products and services through its direct sales organization, indirect channels as well as online. Fair Isaac was founded in 1956 and is based in Bozeman, MT.

Zacks No. 2 (buy) stock, FICO has exceeded earnings estimates in each of the past seven quarters. The software developer recently announced its fiscal first quarter earnings which once again exceeded consensus estimates. Quarterly EPS came in at $3.70, providing a positive surprise of 8.2% from the Zacks consensus estimate of $3.42. FICO published a surprise average earnings for the last four quarters of +18.7%. The stock is up more than 20% year-to-date, easily outperforming major indices.

Analysts covering FICO have raised their EPS estimates for fiscal 2022 by 1.85% in the past 60 days. Zacks’ consensus estimate is now $15.97, which would represent growth of 22.19% from 2021. FICO’s next earnings report is due May 4.and.

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

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In addition to the investment ideas discussed above, would you like to know our top 10 picks for all of 2022?

From its creation in 2012 to 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% vs. +348.7% for the S&P 500. Now our research director has combed through 4,000 companies covered by the Zacks Ranking and selected the top 10 tickers to buy and keep. Don’t miss your chance to enter…because the sooner you do, the better your chances of winning.

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Dell Technologies Inc. (DELL): Free Inventory Analysis Report

Fair Isaac Corporation (FICO): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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