One of the greatest strengths of Adam’s Green Zone Power Ratings system is its ability to identify synergy…
More than just a corporate buzzword, synergy is something that happens when multiple factors start working in a stock’s favor — leading to potentially massive gains in a very short period of time.
This kind of synergy is hard for an investor to identify on our own.
After all, it’s human nature to focus on one story, on one critical factor at a time.
So we hear about a positive earnings report and expect shares to soar, or we witness a disastrous product launch and expect shares to tumble.
Except that doesn’t always happen because the real story just isn’t that simple.
In some (very rare) cases, multiple factors can align to deliver a bigger windfall than anyone expected.
This is precisely the case with today’s Chart of the Week…
Jumping Off the Green Zone Charts
Each week, Adam and I pore over mountains of data to compile our updated Green Zone database.
That means we’re inevitably skimming the scores of thousands of individual stocks, looking at them like the skyline out of the window of a jet at 50,000 feet.
And every now and then, we see a stock that jumps out at us like it’s Mount Everest on the horizon.
Equitable Holdings Inc. (EQT) is a New York-based financial services company specializing in individual retirement, group retirement and investment management.
A week ago, EQT was rated 22 out of 100 on the Green Zone Power Ratings system. The chart below shows where each of its factor ratings sat in orange.
Look where each of the six factors is now, just a week later (in green below):
Overall, the stock jumped from 22 to 77 … in one week!
You can see why it stood out to us.
Naturally, our next question was — how?
A Fundamental Boost
It’s rare to see such a massive move play out across multiple factors so quickly.
Looking at the side-by-side metrics from one week to the next, the biggest jumps are in Quality (22 to 60) and Growth (12 to 96).
Coincidently, Equitable Holdings released its quarterly and annual earnings call on February 5, and the results were very strong:
- Net income of $899 million in the fourth quarter of 2024 compared to -$698 million in 2023.
- Q4 earnings per share of $1.57 in 2024 compared to $1.33 in 2023.
- Annual earnings per share of $5.93 in 2024 compared to $4.59 in 2023.
That news goes a long way to show why EQT jumped 84 points in its Growth rating.
On Quality, EQT also blows the doors off the insurance industry averages on several metrics.
The company’s return on equity is 210.6%, compared to the peer average of just 13.5%. Its return on investment (22%) is double its industry average (11%).
Just looking at EQT’s stock chart reveals impressive momentum:
EQT Up 80% From August 2024 Low
From its August 2024 low, the stock has risen 80% to reach a new 52-week high.
But, if you just looked at the chart, you wouldn’t be able to tell if that momentum was sustainable.
That’s where the Green Zone Power Ratings system comes in.
The big picture suggests EQT is coming off strong earnings growth, so as the stock price goes higher, it’s still worth buying because it’s an even better value now, given the growth in its fundamentals.
Looking at the data and drilling deep into a few factors that stand out tells us a lot more about EQT and the company than just its stock chart.
That’s all from me today.
Safe trading,
Matt Clark, CMSA®
Chief Research Analyst, Money & Markets
