Back to top

Investment Ideas

Stocks with a Zacks #1 Rank (Strong Buy) have a high probability of outperforming the market over the next 1-3 months. In fact, since 1986, a portfolio of Zacks #1 Ranks, have shown an average annual return of 26% per year, which is nearly triple that of the S&P 500.

This series is meant to 'show' you how the Zacks Rank can get you in and keep you in on the most profitable ones.

Hint: it's all about earnings estimates revisions. (See below.)

Short-Term Trading Example: Brown Shoe Company

Brown Shoe Company (BWS - Snapshot Report) is a small-cap value stock in the Shoes & Related Apparel industry that markets footwear in the United States, Canada and China through their retail stores named Famous Footwear, Naturalizer and Dr. Scholls, to name a few.

This popular brand-name shoe company quickly became a top performing stock as it more than tripled the market's return with a 24% gain within three short months.

On June 29, 2012, BWS received a Zacks #1 Rank, distinguishing itself as a stock poised to outperform. Between 6/29/12 when it was trading at $12.91 and 9/21/12 when it closed at $16.11, BWS rewarded investors with a 24.79% gain in just under 3 short months compared to the market’s 7.19%.

During that time, their 12 Month Forward Earnings Estimates continuously climbed higher from $1.02 to $1.11, producing a spectacular 433% positive EPS surprise, and marking a path for higher prices to follow.

In fact, during that entire time, the earnings estimates didn’t go down once, making for a worry free return. As you can see, rising earnings estimates and rising prices go hand in hand.

And the Zacks Rank makes these stocks easy to find.

Want More of Our Best Recommendations?

Zacks' Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Then each week he hand-selects the most compelling trades and serves them up to you in a new program called Zacks Confidential.

Learn More>>

Kevin Matras is our world-class research expert who has developed more than 30 market-beating strategies using the Zacks Rank. He also directs our service that combines the Zacks Rank with the best strategies for today’s uncertain market, the Zacks Options Trader.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%