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Why This 1 Business Services Stock Could Be a Great Addition to Your Portfolio

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Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.

The Zacks Premium service makes this easier. It features daily updates of the Zacks Rank and Zacks Industry Rank; full access to the Zacks #1 Rank List; Equity Research reports; and Premium stock screens like the Earnings ESP filter. All of these can help you quickly identify what stocks to buy, what to sell, and what are today's hottest industries.

It also includes the Focus List, a long-term portfolio of top stocks that have all the elements to beat the market.

Breaking Down the Zacks Focus List

If you could, wouldn't you jump at the chance for access to a curated list of stocks to kickstart your investing journey?

That's what the Zacks Focus List, a portfolio of 50 stocks, offers investors. Not only does it serve as a starting point for long-term investors, but all stocks included in the list are poised to outperform the market over the next 12 months.

What makes the Focus List even more helpful is that each selection is accompanied by a full Zacks Analyst Report, which explains the reasoning behind every stock's selection and why we believe it's a good pick for the long-term.

The portfolio's past performance only solidifies why investors should consider it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500's return of 9.38%. Cumulatively, the portfolio has returned 2,519.23% while the S&P returned 854.95%. Returns are for the period of February 1, 1996 to March 31, 2021.

Focus List Methodology

When stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.

Brokerage analysts are in charge of determining a company's growth and profitability expectations, or earnings estimates. These analysts work together with company management to evaluate all factors that may affect future earnings, like interest rates, the economy, and sector and industry optimism.

Earnings estimate revisions are very important, since investors also need to take into consideration what a company will earn in the future.

When a stock receives upward earnings estimate revisions, it will likely get even more positive changes in the future. For instance, if an analyst raised their earnings outlook last month, they'll probably do so again this month, and other analysts will follow.

Harnessing the power of earnings estimate revisions is where the Zacks Rank comes in. The Zacks Rank is a unique, proprietary stock-rating model that utilizes changes to a company's quarterly earnings expectations to help investors build a winning portfolio.

Four primary factors make up the Zacks Rank: Agreement, Magnitude, Upside, and Surprise. Each is given a raw score that's recalculated every night and compiled into the Rank, and with this data, stocks are then classified into five groups, ranging from "Strong Buy" to "Strong Sell."

The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.

Since stock prices respond to revisions, it can be very profitable to buy stocks with rising earnings estimates. By buying Focus List stocks, then, you're likely getting into companies whose future earnings estimates will be raised, potentially leading to price momentum.

Focus List Spotlight

Incorporated in 2007 as a Delaware stock corporation and headquartered in San Francisco, CA, Visa Inc. (V - Free Report) operates retail electronic payments network worldwide. The company went public in March 2008 via an initial public offering (IPO).

On May 30, 2017, V was added to the Focus List at $94.67 per share. Shares have increased 136.66% to $224.05 since then, and the company is a #2 (Buy) on the Zacks Rank.

For fiscal 2021, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.04 to $5.82. V boasts an average earnings surprise of 9%.

Moreover, analysts are expecting V's earnings to grow 15.5% for the current fiscal year.

Another standout Focus List stock you could consider is Celanese Corp. (CE - Free Report) . Celanese is a global hybrid chemical company that produces chemical substances and materials; about 95% of Celanese's products rank either first or second in their respective markets.

CE is a #2 (Buy)-ranked stock, and shares have gained over 100.94% since being added to the portfolio.

Three analysts have raised their earnings outlook for the current fiscal year. Celanese’s bottom line is now expected to rise about 122% year-over-year; the Zacks Consensus Estimate has increased $0.20 to $16.98 per share. Additionally, CE has an average earnings surprise of 15.9%.

Reveal Winning Stocks

Unlock all of our powerful research, tools and analysis, including the Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. You'll quickly identify which stocks to buy, hold and sell, and target today's hottest industries, to help improve the performance of your portfolio. Gain full access now >>


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Visa Inc. (V) - free report >>

Celanese Corporation (CE) - free report >>

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