About ABR Rank in Industry
You should always place your money in the best stocks in the best industries. When you understand the value of brokerage research, then you will start that journey by first exploring the Industry Rank by ABR list to find those top industries. Step two leads you here, to the ABR Rank in Industry, where you will find the most attractive stocks in those hot industries.
What is the ABR?
As the name implies the ABR will show you the Average of Brokerage Recommendations on a given stock. The benefit is that you quickly get a snapshot of where Wall Street stands on a stock without having to read a mountain of research reports.
How is the ABR Created for an Individual Stock?
Each brokerage research report carries with it some form of recommendation. The brokerage firms may use different lingo for their rating systems (like saying Outperform instead of Buy), but they can all be properly sorted into our 5 level classification system that is now the industry standard. Each of the 5 classifications has a value associated with it to help compute the ABR. Below we show you an example of a stock with 10 brokerage recommendations and how it adds up into the ABR.
| Recommendation | Value | # of Brokerage Recommendations | Combined Value |
|---|---|---|---|
| Strong Buy | 1 | 2 | 2 |
| Buy | 2 | 3 | 6 |
| Hold | 3 | 3 | 9 |
| Sell | 4 | 1 | 4 |
| Strong Sell | 5 | 1 | 5 |
| Total | 10 | 26 | |
| ABR | 2.60 |
The lower the ABR number, the more favorable Wall Street is on the company. Over the years we have found only modest value in knowing the current ABR for a stock. What is much more powerful is the direction the ABR is moving. Stocks with improving ABRs will outperform the market and visa versa for those with eroding ABR's.
How do you know these are the best stocks? The top rated stocks on this list have the highest percentage of Buy recommendations from the brokerage firms. This means that the highly respected analysts at these firms feel very strongly about the future prospects of these industries. But also that the stock brokers at these firms will persuade clients that these are the best places to invest. This adds up to a very powerful marketing machine that generally leads to superior investment results.
How to Read the ABR Rank in Industry Table
Here is a snapshot of the ABR Rank in Industry table. Below you will find column by column descriptions of how to interpret this information. Note that you can resort the table by clicking on any of the column headings.
ABR Rank in Industry: BLDG-HEAVY CNST
Rank  |
1-WeekChange | Company | Symbol | Current ABR | Previous ABR | Upgrades 1-Week |
Downgrades 1-Week |
|---|---|---|---|---|---|---|---|
| 1 | 0 | FOSTER WHL | FWLT | 1.00 | 1.00 | 0 | 0 |
| 2 | 0 | LAYNE CHRIS | LAYN | 1.00 | 1.00 | 0 | 0 |
| 3 | 0 | PERINI CORP | PCR | 1.00 | 1.00 | 0 | 0 |
| 4 | 0 | DYCOM INDS | DY | 1.67 | 1.67 | 0 | 0 |
| 5 | +4 | WASHINGTON | WGII | 1.67 | 2.00 | 1 | 0 |
| 6 | -1 | CHICAGO BRI | CBI | 1.88 | 1.88 | 0 | 0 |
| 7 | -1 | JACOBS ENGI | JEC | 1.89 | 1.89 | 0 | 0 |
| 8 | -1 | MASTEC INC | MTZ | 2.00 | 2.00 | 0 | 0 |
| 9 | -1 | QUANTA SER | PWR | 2.00 | 2.00 | 0 | 0 |
| 10 | -1 | GRANITE CO | GVA | 2.20 | 2.20 | 0 | 0 |
Rank: Here you will find how the individual stocks rank in the industry based upon the current ABR. If multiple stocks share the same ABR then they will also have the same rank on the page and be displayed in alphabetical order. See above how three firms are tied in 1st place with an ABR of 1.00.
1-Week Change: How much higher or lower is the rank this week versus last. As noted above, the direction of change is usually more predictive of future stock performance than the absolute rank level. You want to be investing in highly ranked stocks showing solid week over week improvement.
Company Name: Self explanatory
Ticker: Click on the ticker to get the current quote and other research information.
Current ABR: Calculated for the stock as noted earlier in this article. Click on the ABR to see the Broker Recommendations research page for the stock.
Previous ABR: Display of the stock's ABR from 1 week ago to highlight magnitude of ABR change week over week.
Upgrades 1-Week: If the ABR improved it is most likely due to some recommendation upgrades (Ex. Stock is raised from a Hold to Strong Buy). Here you get to see the level of that activity in the past week. Sometimes the ABR improves without an upgrade because a brokerage firm with a poor recommendation drops its coverage and that is removed from the ABR calculation.
Downgrades 1-Week: Same concept as upgrades, but here you see number of recommendations downgraded over the week.
Frequently Asked Question
Q: What is the difference between the Average Brokerage Recommendation (ABR) and Zacks Rank?
A: Both of these concepts share the same purpose, which is to highlight the stocks most likely to outperform the market. First they differ in how they rank the stocks; ABR versus the Zacks Rank. Both methods have value and should lead to better stock selection. However, it is fair to say that the Zacks Rank has a superior history of performance. We think it is prudent for investors to discover both rankings for a stock to improve their odds of success.
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