Beat the Market the Zacks Way: Credo, Victoria's Secret, Bank of America in Focus

2026.08.03 12:28 (GMT+0)

Beat the Market the Zacks Way: Credo, Victoria's Secret, Bank of America in Focus

U.S. markets were volatile but encouraging last week, as investors balanced upbeat corporate earnings with slowing growth and persistent inflation concerns. Markets ended the week on a positive note, with major benchmark indexes the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite gaining 0.67%, 0.77%, and 1.36%, respectively. Falling oil prices early in the week, driven by hopes of progress in U.S.-Iran talks, helped improve market sentiment and reduced concerns about rising energy costs.

The economic data painted a mixed picture. Durable goods orders rose just 0.3% in June, well below expectations, and consumer confidence slipped to 90.8 in July from 92.2 in June, suggesting that Americans remain cautious despite a generally healthy economy. The biggest event came on Wednesday when the Federal Reserve kept interest rates unchanged at 3.5-3.75%. While the decision was widely expected, policymakers acknowledged that inflation remains a challenge, especially after recent geopolitical tensions pushed up energy prices. Second-quarter GDP grew 1.5%, down from 2.1% in the first quarter, signaling slower economic growth.

Even so, there were reasons for optimism. Annual PCE inflation eased to 3.7% in June from 4.1% in May, while core PCE slowed to 3.3%. Consumer spending, the backbone of the U.S. economy, still increased 0.3%, showing that households continue to spend despite higher borrowing costs. Weekly jobless claims remained low at 197,000, pointing to a labor market that is still holding up well. The personal saving rate slipped to 2.7%, indicating consumers are dipping deeper into their savings. Strong technology earnings also lifted investor confidence, suggesting the economy continues to show resilience despite ongoing challenges.

Regardless of market conditions, we, here at Zacks, provide investors with unbiased guidance on how to beat the market.

As usual, Zacks Research guided investors over the past three months with its time-tested methodologies. Given the prevailing market uncertainty, you may want to look at our feats to prepare better for your next action.

Here are some of our key achievements:

Credo Technology and Lenovo Following Zacks Rank Upgrade

Shares of Credo Technology Group Holding Ltd CRDO have gained 32.5% (versus the S&P 500’s 1.1% increase) since it was upgraded to a Zacks Rank #1 (Strong Buy) on May 19.

Another stock, Lenovo Group Limited LNVGY, which was upgraded to a Zacks Rank #1 on May 27, has returned 30.9% (versus the S&P 500’s 0.5% decrease) since then.

Zacks Rank, our short-term rating system, has earnings estimate revisions at its core. Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

A portfolio of Zacks # 1 Rank stocks has outperformed the S&P 500 index by 5.7 percentage points this year. Through July 6^th this year, the Zacks # 1 Rank portfolio returned +15.3%, which compares to a +9.7% gain for the S&P 500 index and a +12.6% gain for the equal-weight version of the index in the same time period.

Since its inception in 1988, this portfolio of Zacks # 1 Rank stocks has outperformed the market by 12.4 percentage points. The average annual return for this portfolio of Zacks # 1 Rank stocks since inception in 1988 was +23.9% through July 6^th, which compared to a +11.6% gain for the S&P 500 index and a +11.4% gain for the equal-weight version of the index.

You can see the complete list of today’s Zacks Rank #1 stocks here >>>

Check Credo Technology’s historical EPS and Sales here>>>

Check Lenovo’ historical EPS and Sales here>>>

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Zacks Recommendation Upgrades Victoria's Secret and Movado

Shares of Victoria's Secret VSXY and Movado Group, Inc. MOV have advanced 63.3% (versus the S&P 500’s 1.5% decrease) and 7.3% (versus the S&P 500’s 1% decrease) since their Zacks Recommendation was upgraded to Outperform on June 2 and May 29, respectively.

While the Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon, the Zacks Recommendation aims to predict performance over the next 6 to 12 months. However, just like the Zacks Rank, the foundation for the Zacks Recommendation is trends in earnings estimate revisions.

The Zacks Recommendation classifies stocks into three groups — Outperform, Neutral and Underperform. While these recommendations are determined quantitatively, our analysts have the flexibility to override them for the 1100+ stocks they closely follow based on their better judgment of factors such as valuation, industry conditions and management effectiveness than the quantitative model.

Zacks Focus List Stocks Axon, Bank of America Shoot Up

Shares of Axon Enterprise, Inc. AXON, which belongs to the Zacks Focus List, have gained 31.2% over the past 12 weeks. The stock was added to the FocusList on June 3, 2020. Another Focus List holding, Bank of America Corporation BAC, which was added to the portfolio on January 9, 2017, has returned 16.4% over the past 12 weeks. The S&P 500 has advanced 3.6% over this period.

The 50-stock Focus List portfolio returned +13.12% in the first half of 2026 (through June 30^th, 2026) vs. +10.21% for the S&P 500 index and +12.14% for the equal-weight version of the index.

The portfolio returned +22.1% in 2025 vs. +17.9% for the S&P 500 index and +11.4% for the equal-weight version of the index.

The Zacks Focus List portfolio returned +18.41% in 2024 vs. +25.04% for the S&P 500 index and +13% for the equal-weight S&P 500 index. The portfolio had returned +29.54% in 2023 vs. +26.28% for the S&P 500 index and +13.61% for the equal-weight S&P 500 index. In 2022, the portfolio returned -15.2% vs. the S&P 500 index’s -17.96%.

Through June 30^th 2026, the portfolio’s rolling returns on a one-year, three-year, five-year, ten-year, and since 2004 have been +26.93% (vs. +22.33% for the S&P 500 index), +22.23% (vs. +20.62%), +12.80% (vs. +13.41%), +16.65% (vs. +15.51%) and +12.48% vs. (+10.94%), respectively.

Unlock all of our powerful research, tools and analysis, including the Focus List, Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. Gain full access now >>

Zacks ECAP Stocks Automatic Data Processing and Mettler-Toledo International Surge

Automatic Data Processing, Inc. ADP, a component of our Earnings Certain Admiral Portfolio (ECAP), has jumped 24.4% over the past 12 weeks. Mettler-Toledo International MTD has followed Automatic Data Processing with 11.8% returns.

The Zacks Earnings Certain Admiral Portfolio (ECAP), which consists of 30 concentrated, ultra-defensive, long-term Buy-and-Hold stocks, returned -9.4% in the first half of 2026 (through June 30^th) vs. +10.2% for the S&P 500 index.

For 2025, the portfolio returned -1.67% vs. +17.9% gain for the S&P 500 index. For the year 2024, the portfolio returned +16.26% vs. +24.89% for the S&P 500 index (SPY ETF). In 2023, the portfolio returned +12.17% vs. +26.28% for the S&P 500 index. The portfolio returned -4.7% in 2022 vs. the S&P 500 index’s -17.96%.

The ECAP and many other model portfolios are available as part of Zacks Advisor Tools, a cloud-based solution to access Zacks award-winning stock, mutual fund and ETF research. Click here to schedule a demo.

Zacks ECDP Stocks Quest Diagnostics and Hormel Foods Outperform Peers

Quest Diagnostics Incorporated DGX, which is part of our Earnings Certain Dividend Portfolio (ECDP), has returned 20.9% over the past 12 weeks. Another ECDP stock, Hormel Foods Corporation HRL, has also climbed 17.3% over the same time frame. Of course, the inclination of investors toward quality dividend stocks to secure an income stream amid heightened market volatility contributed to this performance.

Check Quest Diagnostics‘ dividend history here>>>

Check Hormel Foods' dividend history here>>>

With an extremely low beta and a history of minimum earnings variability over the last 20+ years, this 25-stock portfolio helps to significantly mitigate risk.

The Zacks Earnings Certain Dividend Portfolio (ECDP) returned -1.7% in the first half of 2026 (through June 30^th) vs. +10.2% for the S&P 500 index and +9.03% for the Dividend Aristocrats ETF ( NOBL).

The portfolio returned -0.6% in 2025 vs. a +6.8% gain for the Dividend Aristocrats ETF. For the full year 2024, the portfolio returned +6.95% vs. +24.89% for the S&P 500 index and +6.72% for NOBL. The portfolio returned -0.9% in 2023 vs. +26.28% for the S&P 500 index and +8.11% for NOBL. The portfolio returned -2.3% in 2022 vs. -17.96% for the S&P 500 index and -8.34% for NOBL.

Click here to access this portfolio on Zacks Advisor Tools.

Zacks Top 10 Stock Monolithic Power Systems Delivers Solid Returns

Monolithic Power Systems, Inc. MPWR, from the Zacks Top 10 Stocks for 2026, has jumped 52.3% since the list was released on January 5, 2026, compared with the S&P 500 index’s 9.4% increase during this period.

The Top 10 portfolio returned +26.83% in the first half of 2026 (through June 30^th) vs. +9.97% for the S&P 500 index and +11.35% for the equal-weight version of the index.

The Top 10 portfolio returned +22.6% in 2025 vs. +17.9% for the S&P 500 index and +11.4% for the equal-weight version of the index.

The Top 10 portfolio returned +62.98% in 2024, vs. +25.04% for the S&P 500 index and +13% for the equal-weight version of the index. The portfolio had returned +25.15% in 2023 vs. +26.28% for the S&P 500 index.

Through the end of June 2026, the Top 10 portfolio has produced a cumulative return of +3,185.6% since 2012 vs. +629.1% for the S&P 500 index and +464.3% for the equal-weight version of the index. The portfolio has produced an average annual return of +26.9% in the period 2012 through June 30^th, 2026 vs. +13.5% for the S&P 500 index and +11.2% for the equal-weight version of the index.

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This article originally published on Zacks Investment Research (zacks.com).

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