Back to top

Anatomy of Success

Stocks with a Zacks Rank #1 (Strong Buy) are picked to outperform the market over the next 1-3 months. But, many of these short-term outperformers can turn into longer-term positions, resulting in even more impressive gains.

In the example below, we show you how to identify the top stocks ready to develop into the best uptrends. Hint: it's all about the earnings estimate revisions.

Texas Capital Bancshares (TCBI - Analyst Report)

Texas Capital Bancshares was one of those stocks that looked set to outperform over a 1-3 month timeframe, but then continued to outperform for many more months to come.

TCBI is a mid-cap blend (growth and value) stock in the Financial Industry. As a regional bank headquartered in Texas, it's not one of those stocks with a national presence or name recognition. In fact, if you didn't live in Texas, you'd be hard pressed to have ever heard of it.

But many of your favorite stocks were likely new to you at some point. The trick is getting these onto your radar screen so you become aware of them. And having the confidence that when they do, they are worthy of taking a position.

On December 9, 2011, TCBI was singled out as a top stock when it received a Zacks Rank #1. Even as many investors were still shunning financial stocks, this one stood out from the others, ready to outperform.

Between 12/9/11, when it was trading at $31.77, and 9/28/12, when it closed at $49.71, TCBI rewarded investors with a 71.71% gain in just 14 months compared to the market's 20.12%, for more than a 51% excess return!

During that time, their 12 Month Forward Earnings Estimates climbed from $2.20 to $3.16, which was a 43.64% increase, and the clear catalyst for TCBI‘s stellar gains.

Once you're in a stock destined for greatness it's important to not get bucked off. To be sure, there were both positive news stories and negative news stories throughout TCBI's run-up. And the broader market had its up and downs. But their earnings estimates kept pointing higher, giving investors plenty of reason to push the stock up, and keeping you on board the entire time.

You too can find your next big winner, and stay in it by following their earnings estimate revisions and the Zacks Rank.

Click here to find more Zacks Rank #1 stocks.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: http://www.zacks.com/performance.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

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 Zacks.com. 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
FELCOR LODG… FCH 10.47 +3.46%
OLD DOMINIO… ODFL 63.48 +1.18%
VASCO DATA… VDSI 13.57 +0.67%
AMEDISYS IN… AMED 20.18 +0.10%
LENOVO GROU… LNVGY 27.07 +0.04%