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Anatomy of Success

You never know which stock will be your next big winner. I'm talking about a 100% or 200% return or more. But there's a good chance it will be a Zacks Rank #1, Strong Buy.

Those types of triple-digit returns don't come around every day. And they can be tough to find. But, there's one common theme that these spectacular gainers all seem to have in common - and that's upward earnings estimate revisions.

Simply put, stocks with rising earnings estimates outperform the market. And those with the biggest upward earnings estimate trends are the ones that go up the most.

There's no better way to find stocks with the best upward earnings estimate revisions than to look for stocks with a Zacks Rank #1.


SouFun Holdings (SFUN - Snapshot Report)

On July 5th, 2013, SouFun was just that type of stock, having been upgraded to a Zacks Rank #1, Strong Buy.

Even though they are a large-cap growth stock traded on the NYSE since 2010, this real estate and home furnishings Internet company based in China is not as well-known as other large-cap stocks here in the US.

For many, their first introduction to SFUN was when it became a Zacks Rank #1. But it very quickly became many investors' favorite stock.

Within the next 3 months, their earnings estimate revisions were raised 13 times in a row, which propelled the stock higher by 106.90%.

But SFUN was not done. While still maintaining a top Zacks Rank, they saw their earnings estimates raised another 15 times over the next 3 months, which sent prices even higher, bringing the total gains for the stock to a whopping 255.18% return over a short 6 month period.

At the time of this writing (1/20), SFUN is a Zacks Rank #2, Buy, which continues to tell investors that this stock should continue to outperform the market over the next 1-3 months.



Chart: courtesy of Zacks Research Wizard


Picking up a 100% return or more can seem like magic sometimes, as if all the stars had to perfectly align in order to produce such a move and for you to have gotten in there.

But there was nothing magical about getting on board this one. And getting into SFUN 250% ago wouldn't have felt any different than getting into any other stock. However, by getting into a Zacks Rank #1 stock with upward earnings estimate revisions (as this one was), there's always a good chance that it could turn into a triple-digit gainer.

Of course, once you're in, you would've had to stay in and not gotten bucked off. But, as you can see from the chart above, with 2 positive surprises and 28 upward earnings estimate revisions in a row (each one essentially predicting this stock should outperform the market), it would have been an effortless win and definitely a standout performance in anybody's portfolio.

To create more opportunities for these types of returns in your own account, it all begins with buying stocks with a Zacks Rank #1, Strong Buy. The earnings estimate revisions will do the rest.

Click here to find more Zacks Rank #1, Strong Buys.

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

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