Table of Contents
- Zacks and the Zacks Rank
- Who Are Institutional Investors?
- Where Do Earnings Estimates Come From?
- Consensus Estimates
- The Zacks Rank
- The Four Factors behind the Zacks Rank
- Zacks Rank Performance
- How the Zacks Rank Predicts Price Movement
- Price Spikes and the Zacks Rank
- Why a Stock May Lose Its #1 Rank
- Integrating the Zacks Rank into Investment Strategies
- The Difference Between The Zacks Rank and Zacks Recommendation
- The Difference Between ABR and The Zacks Rank
- Limitations of the Zacks Rank
- Where to View the Zacks Rank
- Additional Resources from Zacks
The Zacks Rank:
Harnessing the Power of Earnings Estimate Revisions
Earnings estimate revisions are the most powerful force impacting stock prices. Stocks with rising earnings estimates, as a group, have materially outperformed the S&P 500 year-after-year. Similarly, stocks with falling earnings estimates have underperformed the S&P 500 year-after-year.
Zacks has made the process of identifying stocks with changing earnings estimates easy and very profitable. Since 1988, a portfolio constructed of Zacks #1 Rank stocks has generated an average annual return of 26%. Even during the 2000-2002 bear market, the strategy generated positive returns.
This short guide explains how earnings estimates are created and, more importantly, how investors can use revisions in earnings estimates to invest more profitably.1
"I can honestly say that I have never felt as confident in my trading, nor have I been as profitable, as I have by using Zacks."
Kurt Petrich
Norfalk, VA
(A version of this guide formatted for printing is also available.)
Next: Zacks & the Zacks Rank
