Zacks Market Edge highlights: EXAS, ZM, TSLA, ABBV, ZOM

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CHICAGO, IL – January 12, 2023 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Each week, guests will join Tracey to discuss the top investing topics in stocks, bonds, and ETFs and how they affect your life. To listen to the podcast, click here:

The stocks behind the popular ETFs for 2022

Welcome to Episode #343 of the Zacks Market Edge Podcast.

  • (0:45) – 2022 Money Flow Analysis: Should You Buy Back Cathy Wood?
  • (5:15) – What is Kathy Wood currently buying?
  • (14:05) – Increased Income in ETFs: Should You Add Exposure to Your Portfolio?
  • (22:50) – Will the energy sector continue to outperform?
  • (32:30) – Episode Briefing: ARKK, SCHD, JEPI, DBMF, PFIX, XOP, EXAS, ZM, TSLA, ROKU, SQ

Each week, guests will join host and Zacks stock strategist, Tracey Ryniec to discuss the top investing topics in stocks, bonds, and ETFs and how they affect your life.

This week, Tracy is joined by Zacks, Director of ETF Research, Nina Mishra, to talk about Cathie Wood’s Ark and her flagship ETF as well as other hugely popular ETFs.

Wood’s flagship fund, the ARK Innovation ETF, was the only Ark Invest ETF to see positive cash flows in 2022. It saw $1.2 billion in inflows over the year. But $1.8 billion came in the first seven months of 2022 with $600 million flowing in the last five months. Are investors souring on ARKK?

The shares are down 65.6% in the last year and now have a 5-year yield of 3.5%.

Beloved investors are in for 2022

On the flip side, the JPMorgan Equity Premium Income ETF was one of the most popular ETFs in 2022 for inflows. It owns 125 shares and is currently paying a 12-month yield of 9.64%.

Over the past year, stocks have fallen 3.5% but that outperforms the S&P 500 which is down 16% over the same period.

The key to each of the ETFs was the underlying stock in the portfolio. What stocks are behind the curtain of these two exchange-traded funds?

5 stocks behind the popular ETFs for 2023

1. Exact Sciences Corp. (EXAS)

In 2023, Exact Sciences is the largest company in Cathie Wood’s ARKK ETF, not Tesla. It represents 9.7% of the portfolio.

The exact sciences have been choppy in the past five years. During the developing stock boom, Exact Sciences was one of the big winners. But Exact Sciences is down 54% in the last two years and is up just 14.2% over the past five years.

But in January 2023, Exact Sciences announced that it would be profitable for the full year of 2023. The stock rose 25% on the news.

Is Exact Science Turning the Corner?

2. Zoom in the video (ZM)

Zoom Video is the second largest contract in the ARK Innovation ETF. It is a position of 9.4%.

Zoom Video has been a winner for the pandemic as people have been working from home. The stock went up. But once we reopened, stocks crashed. Zoom Video has fallen 79.7% in the past two years.

Is Zoom Video a Deal or a Trap in 2023??

3 – Tesla (TSLA)

Tesla is now the third largest company in ARKK. It used to be the largest position in the pioneering Cathy Wood Fund.

But Tesla shares have fallen 59.5% in the past two years. It is now just a 6.9% position.

But with that fall, Tesla shares are now getting cheaper. It is trading with a forward P/E of 24.5. Earnings are expected to rise by 78% in 2022 and another 22% in 2023.

Will Tesla oversold start in 2023?

4. AbbVie (ABBV)

AbbVie is the top 10 holding company of the JPMorgan Equity Premium ETF. It shouldn’t come as a surprise. It has been a favorite of income investors for years.

AbbVie pays a dividend of 3.5%. The stock is cheap, with a forward EPS of 13.8.

Shares have rallied in the past year, gaining 18.4%. But earnings are expected to decline by 15.6% in 2023.

Is the gathering over at AbbVie?

5. Exxon Mobil Corp. (xom)

Exxon Mobil is also a top 10 holding company in the JPMorgan Equity Premium ETF. This is not surprising since she has consistently paid out a dividend over many years.

ExxonMobil currently pays a dividend of 3.3%.

It was one of the best-performing stocks in 2022, with shares up 57% year over year. Yet it’s still cheap, with a forward P/E of 10.4.

But Exxon’s profits are expected to drop 25% in 2023.

Should oil majors like ExxonMobil still be on your shortlist or is the bullish news already priced in?

What else do you need to know about ETF investing to kick off 2023?

Listen to this week’s podcast to find out.

[In full disclosure, Tracey owns shares of ABBV in her personal portfolio.]

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Zacks Names “Single Best Pick to Double”

Out of thousands of stocks, each of the 5 Zacks experts picked their favorite to skyrocket +100% or more in the coming months. Out of these five, Research Director Shiraz Mian selects one with the most explosive upside of all.

It’s a little-known chemical company, up 65% year-over-year, but it’s still cheap. With relentless demand, skyrocketing earnings estimates for 2022, and $1.5 billion in stock buybacks, retail investors could jump in at any time.

This company could rival or beat other recent Zacks stocks that are set to double like Boston Beer Company which is up +143.0% in just over 9 months and NVIDIA which is booming +175.9% in one year.

FREE: See our top stocks and 4 runners-up >>

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Exxon Mobil Corporation (XOM): Free Stock Analysis Report

Tesla, Inc. (TSLA): Free stock analysis report

AbbVie Inc. (ABBV): Free stock analysis report

Exact Sciences Corporation (EXAS): Free Inventory Analysis Report

Zoom Video Communications, Inc. (ZM): Free stock analysis report

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