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Every week the government and other entities release economic reports that cover all areas of the economy; from retail sales and housing to international trade and consumer sentiment.
In fact, on virtually any given day there could be anywhere from one to a handful of reports.
And while the financial media does cover them, they usually focus on headline numbers without doing a deeper dive.
This is unfortunate because, often, within these reports exists money making details that can quickly be uncovered with just an extra few minutes of reading.
For example: in the Employment Situation report, it details what sectors saw the most new jobs or labor force expansion, and which ones contracted.
I remember getting into several restaurant stocks in 2011 that took off after the report cited that the 'food services and drinking places' (that's apparently how the government refers to restaurants) were one of the largest creators of jobs that month. But the headline number and the obligatory one-or-two-sentence write ups on many news sites missed the best part of the story by not going the extra mile (or paragraph).
Well here we are again, with more stock picking insight straight from last week's Employment Situation report. Last week it showed that some of the biggest job creation came from these five industries:
1) Professional and Business Services
2) Computer System Design
3) Management and Technical Consulting Services
4) Health Care and Social Services
5) Leisure and Hospitality Services (mostly from 'food and drinking places' once again, i.e., restaurants)
The reason why I like this report for stock picking is because if an industry is hiring lots of new people, then that must mean there's lots of new activity to warrant it. And business activity usually means more money and profits for those companies and their stocks.
Once these reports point you in the right direction, you can then plug in the appropriate sectors and industries to capitalize on this information and find the best stocks within those groups.
In another article, I'll go over some winning ways to do top/down analysis to zero-in on the best stocks within a larger group.
But for now, once you uncover these not so hidden clues, go to any screener and locate the sector or industry of interest. Then consider looking for Zacks #1 Ranks (Strong Buy) or Zacks #2 Ranks (Buy); market beating growth rates; below industry valuations; and upward earnings estimate revisions.
Here are five stocks from some of the sectors singled out as the biggest job creators in last week's Employment report:
- Snapshot Report
Dunkin' Brands Group, Inc.
( MANH - Snapshot Report ) Manhattan Associates, Inc.
( RDWR - Snapshot Report ) Radware Ltd.
( SEM - Snapshot Report ) Select Medical Holdings Corp.
( TW - Snapshot Report ) Towers Watson & Co.
Profitable stock ideas can come at any time and any place. But instead of waiting for the next great stock to fall into your lap, you can actively search for them. And by reading a few extra reports and then putting those ideas into a capable screener, you'll soon be amazed and some of your newest picks. And you'll feel pretty smart after finding them too.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your trial to the Research Wizard today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks portfolios and strategies are available at: http://www.zacks.com/performance.
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