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5 Stocks to Keep Tabs on Post Recent Broker Upgrade
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Notwithstanding the emergence of new variants of COVID-19, the U.S. stock market has had a solid run in 2021. This year’s trading is in its last leg, with only a few days of the last month remaining. Year to date, the major stock indexes, such as the Dow, the S&P 500 and the Nasdaq Composite have rallied 17.3%, 24.3% and 17.8%, respectively.
Investors would like to take advantage of this impressive stock market performance and add suitable promising stocks to their respective portfolios for handsome returns. However, with multiple stocks flooding the market, it is quite a daunting task for an individual investor to add appropriate stocks to the portfolio.
Consequently, seeking advice from experts in the field of investment is prudent.
Who Are the Experts & Why
The “experts” in the field of investment are brokers. They are equipped with detailed knowledge about the space.
Brokers, irrespective of their types (sell-side, buy-side or independent), have at their disposal a lot more information on a company and its prospects than individual investors. To attain their objective, they go through minute details of the publicly available financial documents apart from attending company conference calls and other presentations.
Estimate revisions by brokers serve as an important pointer regarding the price of a stock. In fact, a rating upgrade generally leads to stock price appreciation. Similarly, the price of a stock may plummet following a rating downgrade.
Winning Strategy
The above write-up clearly suggests that by following broker actions, one can arrive at a winning portfolio of stocks. Keeping this in mind, we designed a screen to shortlist stocks based on improving analyst recommendations and upward revisions of earnings estimates over the last four weeks.
Also, since the price/sales ratio is a strong complementary valuation metric in the presence of analyst information, it is included. The price/sales ratio takes care of the company’s top line, making the strategy foolproof.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75: This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks.
% change in Q (1) est. (4 weeks) = Top #10: This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter.
To ensure that the strategy is a winning one, covering all bases, we have added the following screening parameters:
Price-to-Sales = Bot%10: The lower the ratio the better, companies meeting this criteria are in bottom 10% of our universe of over 7,700 stocks with respect to this ratio.
Price greater than 5: A stock trading below $5 will not likely create significant interest for most investors.
Average Daily Volume greater than 100,000 shares over the last 20 trading days: Volume has to be significant to ensure that these are easily traded.
Market value ($ mil) = Top #3000: This gives us stocks that are the top 3000 if one judges by market capitalization.
Com/ADR/Canadian= Com: This eliminates the ADR and Canadian stocks.
Here are five of the 10 stocks that made it through the screen:
Boise, ID-based Boise Cascade Company (BCC - Free Report) , which makes wood products and distributes building materials in the United States as well as Canada, currently sports a Zacks Rank #1 (Strong Buy). BCC is aided by factors like favorable commodity wood products, pricing and a robust construction activity. You can see the complete list of today’s Zacks #1 Rank stocks here.
Boise Cascade’s bottom line outshined the Zacks Consensus Estimate in each of the last four quarters, the average being 45.5%. BCC’s fourth-quarter 2021 earnings are expected to increase 23.8% from the year-ago reported figure. Shares of BCC have gained 40.1% so far this year.
Caleres (CAL - Free Report) : This Saint Louis-based company, currently flaunting a Zacks Rank of 1, engages in the retail and wholesale of footwear. Strong performance of its Famous Footwear and Brand Portfolio segments is driving the top line.
Caleres has an excellent track record considering its earnings per share. The bottom line outshined the Zacks Consensus Estimate in each of the last four quarters, the average being in excess of 100%. Shares of CAL have soared above 44% so far this year.
Centene Corporation (CNC - Free Report) : Centene is a well-diversified, multi-national healthcare company that primarily provides a set of services to the government-sponsored healthcare programs. Centene's leading position in the industry is largely supported by its prudent operating performance, strong inorganic growth and solid fundamentals.
The Zacks Consensus Estimate for current-year earnings has been revised 0.4% upward over the past 30 days. Shares of CNC have gained 38.8% so far this year. CNC currently carries a Zacks Rank #3 (Hold).
Irving, TX-based Commercial Metals Company (CMC - Free Report) manufactures, recycles and markets steel and metal products, related materials and services. CMC currently carries a Zacks Rank #2 (Buy).
Commercial Metals is poised to gain on robust steel demand, stemming from elevated spending on residential and construction sector in North America and recovery in the manufacturing sector. CMC’s earnings outshined the Zacks Consensus Estimate in three of the last four quarters (missing estimates in the remaining one). Shares of CMC have gained 61.5% so far this year.
BJ's Wholesale Club Holdings (BJ - Free Report) emerged a preferred destination for shoppers when it comes to essentials and other items. Sturdy membership trends, assortment initiatives, enhanced digital capabilities and a robust real-estate pipeline are likely to help drive growth.
BJ's Wholesale Club’s bottom line outshined the Zacks Consensus Estimate in each of the last four quarters, the average being 17.7%. Shares of BJ have gained 81.8% so far this year. BJ currently carries a Zacks Rank of 2.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Image: Shutterstock
5 Stocks to Keep Tabs on Post Recent Broker Upgrade
Notwithstanding the emergence of new variants of COVID-19, the U.S. stock market has had a solid run in 2021. This year’s trading is in its last leg, with only a few days of the last month remaining. Year to date, the major stock indexes, such as the Dow, the S&P 500 and the Nasdaq Composite have rallied 17.3%, 24.3% and 17.8%, respectively.
Investors would like to take advantage of this impressive stock market performance and add suitable promising stocks to their respective portfolios for handsome returns. However, with multiple stocks flooding the market, it is quite a daunting task for an individual investor to add appropriate stocks to the portfolio.
Consequently, seeking advice from experts in the field of investment is prudent.
Who Are the Experts & Why
The “experts” in the field of investment are brokers. They are equipped with detailed knowledge about the space.
Brokers, irrespective of their types (sell-side, buy-side or independent), have at their disposal a lot more information on a company and its prospects than individual investors. To attain their objective, they go through minute details of the publicly available financial documents apart from attending company conference calls and other presentations.
Estimate revisions by brokers serve as an important pointer regarding the price of a stock. In fact, a rating upgrade generally leads to stock price appreciation. Similarly, the price of a stock may plummet following a rating downgrade.
Winning Strategy
The above write-up clearly suggests that by following broker actions, one can arrive at a winning portfolio of stocks. Keeping this in mind, we designed a screen to shortlist stocks based on improving analyst recommendations and upward revisions of earnings estimates over the last four weeks.
Also, since the price/sales ratio is a strong complementary valuation metric in the presence of analyst information, it is included. The price/sales ratio takes care of the company’s top line, making the strategy foolproof.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75: This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks.
% change in Q (1) est. (4 weeks) = Top #10: This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter.
To ensure that the strategy is a winning one, covering all bases, we have added the following screening parameters:
Price-to-Sales = Bot%10: The lower the ratio the better, companies meeting this criteria are in bottom 10% of our universe of over 7,700 stocks with respect to this ratio.
Price greater than 5: A stock trading below $5 will not likely create significant interest for most investors.
Average Daily Volume greater than 100,000 shares over the last 20 trading days: Volume has to be significant to ensure that these are easily traded.
Market value ($ mil) = Top #3000: This gives us stocks that are the top 3000 if one judges by market capitalization.
Com/ADR/Canadian= Com: This eliminates the ADR and Canadian stocks.
Here are five of the 10 stocks that made it through the screen:
Boise, ID-based Boise Cascade Company (BCC - Free Report) , which makes wood products and distributes building materials in the United States as well as Canada, currently sports a Zacks Rank #1 (Strong Buy). BCC is aided by factors like favorable commodity wood products, pricing and a robust construction activity. You can see the complete list of today’s Zacks #1 Rank stocks here.
Boise Cascade’s bottom line outshined the Zacks Consensus Estimate in each of the last four quarters, the average being 45.5%. BCC’s fourth-quarter 2021 earnings are expected to increase 23.8% from the year-ago reported figure. Shares of BCC have gained 40.1% so far this year.
Caleres (CAL - Free Report) : This Saint Louis-based company, currently flaunting a Zacks Rank of 1, engages in the retail and wholesale of footwear. Strong performance of its Famous Footwear and Brand Portfolio segments is driving the top line.
Caleres has an excellent track record considering its earnings per share. The bottom line outshined the Zacks Consensus Estimate in each of the last four quarters, the average being in excess of 100%. Shares of CAL have soared above 44% so far this year.
Centene Corporation (CNC - Free Report) : Centene is a well-diversified, multi-national healthcare company that primarily provides a set of services to the government-sponsored healthcare programs. Centene's leading position in the industry is largely supported by its prudent operating performance, strong inorganic growth and solid fundamentals.
The Zacks Consensus Estimate for current-year earnings has been revised 0.4% upward over the past 30 days. Shares of CNC have gained 38.8% so far this year. CNC currently carries a Zacks Rank #3 (Hold).
Irving, TX-based Commercial Metals Company (CMC - Free Report) manufactures, recycles and markets steel and metal products, related materials and services. CMC currently carries a Zacks Rank #2 (Buy).
Commercial Metals is poised to gain on robust steel demand, stemming from elevated spending on residential and construction sector in North America and recovery in the manufacturing sector. CMC’s earnings outshined the Zacks Consensus Estimate in three of the last four quarters (missing estimates in the remaining one). Shares of CMC have gained 61.5% so far this year.
BJ's Wholesale Club Holdings (BJ - Free Report) emerged a preferred destination for shoppers when it comes to essentials and other items. Sturdy membership trends, assortment initiatives, enhanced digital capabilities and a robust real-estate pipeline are likely to help drive growth.
BJ's Wholesale Club’s bottom line outshined the Zacks Consensus Estimate in each of the last four quarters, the average being 17.7%. Shares of BJ have gained 81.8% so far this year. BJ currently carries a Zacks Rank of 2.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.