We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Check 5 Broker-Friendly Stocks for Returns Amid Market Chaos
Read MoreHide Full Article
With inflation remaining sky-high in the United States, markets have been gripped by extreme volatility this year so far. To combat the surging inflation in the country, the Fed adopted a hawkish stance. Per the latest available data, the Consumer Price Index (CPI) inflation for September 2022 was up 8.2% year over year. The core CPI (excluding volatile food and energy items) increased 6.6% year over year in September compared with 6.5% in August.
As a result of this high reading, the Fed, which has already raised its core interest rate of 3% year to date, is likely to continue its interest-raising policy. Higher interest rates flare up the cost of borrowing, thus increasing the possibility of an economic slowdown.
This gloomy scenario and the uncertain path ahead are well reflected in the double-digit year-to-date declines in the Dow Jones Industrial Average, Nasdaq composite and the S&P 500 indexes. Despite the current turmoil, turning one’s back on equities is never advisable. So what’s the way forward?
One way is to adhere to broker advice. Broker-friendly stocks like American Airlines (AAL - Free Report) , Delta Air Lines (DAL - Free Report) , CVR Energy (CVI - Free Report) , Bunge Limited (BG - Free Report) and Cardinal Health (CAH - Free Report) are worth having a look at for healthy returns.
Why Broker Advice is the Need of the Hour
In the absence of proper guidance, individual investors may end up selecting wrong stocks for their portfolio. This might waste their hard-earned money, which they invested in the stock markets.
As brokers indulge in extensive research on stocks under their coverage, they have access to much detailed information on a company. To this end, they attend company conference calls/presentations and scrutinize every piece of document available in the public domain. After thorough research, brokers recommend (buy, sell or hold) a stock. Naturally, individual investors should avail of brokers’ handy tips while designing a winning basket of stocks.
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 northward 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 a 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 added the following screening parameters:
Price-to-Sales = Bot%10: The lower the ratio the better, companies meeting this criteria are in the 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 passed the screen test:
American Airlines is based in Fort Worth, TX. The gradual increase in air-travel demand (particularly for leisure) is aiding AAL. However, high fuel costs are hurting the bottom line.
Over the past 60 days, the stock has seen the Zacks Consensus Estimate for 2022 earnings being revised 10.9% upward. AAL currently carries a Zacks Rank #3 (Hold).
Delta, currently carrying a Zacks Rank of 3, is based in Atlanta, GA. DAL is being bolstered by the uptick in demand for air travel (particularly for leisure). High fuel costs are, however, a bane.
Delta’s earnings outshined the Zacks Consensus Estimate in two of the last four quarters (missing the mark in the remaining two quarters). The average beat is 7.9%.
CVR Energy is an independent refiner and marketer of high-value transportation fuels. CVI is also a producer of ammonia and urea ammonia nitrate fertilizers. CVI's petroleum business includes full-coking sour crude refinery in Coffeyville, KS. Its efforts to reward its shareholders underline its strong financial position. The robust Nitrogen Fertilizer unit is supporting growth.
CVR Energy, currently carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.30% over the past 60 days.
Bunge : Headquartered in St. Louis, MO, Bunge operates as an agribusiness firm, delivering essential food, feed and fuel across the globe. BG is reportedly the world’s leader in oilseed processing, and a leading producer and supplier of specialty plant-based oils and fats.
Bunge delivered a trailing four-quarter earnings surprise of 50.7%, on average. BG has a long-term earnings growth expectation of 6.7%. It currently carries a Zacks Rank of 3.
Cardinal Health is being well-served by its pharmaceutical segment. Its diversified product portfolio bodes well. CAH’s acquisition-driven strategy is encouraging as well.
Cardinal Health is currently Zacks #3 Ranked. The Zacks Consensus Estimate for CAH’s current-year earnings has risen 2.7% year over year from the 2021 actuals.
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 backtest 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: Bigstock
Check 5 Broker-Friendly Stocks for Returns Amid Market Chaos
With inflation remaining sky-high in the United States, markets have been gripped by extreme volatility this year so far. To combat the surging inflation in the country, the Fed adopted a hawkish stance. Per the latest available data, the Consumer Price Index (CPI) inflation for September 2022 was up 8.2% year over year. The core CPI (excluding volatile food and energy items) increased 6.6% year over year in September compared with 6.5% in August.
As a result of this high reading, the Fed, which has already raised its core interest rate of 3% year to date, is likely to continue its interest-raising policy. Higher interest rates flare up the cost of borrowing, thus increasing the possibility of an economic slowdown.
This gloomy scenario and the uncertain path ahead are well reflected in the double-digit year-to-date declines in the Dow Jones Industrial Average, Nasdaq composite and the S&P 500 indexes. Despite the current turmoil, turning one’s back on equities is never advisable. So what’s the way forward?
One way is to adhere to broker advice. Broker-friendly stocks like American Airlines (AAL - Free Report) , Delta Air Lines (DAL - Free Report) , CVR Energy (CVI - Free Report) , Bunge Limited (BG - Free Report) and Cardinal Health (CAH - Free Report) are worth having a look at for healthy returns.
Why Broker Advice is the Need of the Hour
In the absence of proper guidance, individual investors may end up selecting wrong stocks for their portfolio. This might waste their hard-earned money, which they invested in the stock markets.
As brokers indulge in extensive research on stocks under their coverage, they have access to much detailed information on a company. To this end, they attend company conference calls/presentations and scrutinize every piece of document available in the public domain. After thorough research, brokers recommend (buy, sell or hold) a stock. Naturally, individual investors should avail of brokers’ handy tips while designing a winning basket of stocks.
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 northward 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 a 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 added the following screening parameters:
Price-to-Sales = Bot%10: The lower the ratio the better, companies meeting this criteria are in the 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 passed the screen test:
American Airlines is based in Fort Worth, TX. The gradual increase in air-travel demand (particularly for leisure) is aiding AAL. However, high fuel costs are hurting the bottom line.
Over the past 60 days, the stock has seen the Zacks Consensus Estimate for 2022 earnings being revised 10.9% upward. AAL currently carries a Zacks Rank #3 (Hold).
Delta, currently carrying a Zacks Rank of 3, is based in Atlanta, GA. DAL is being bolstered by the uptick in demand for air travel (particularly for leisure). High fuel costs are, however, a bane.
Delta’s earnings outshined the Zacks Consensus Estimate in two of the last four quarters (missing the mark in the remaining two quarters). The average beat is 7.9%.
CVR Energy is an independent refiner and marketer of high-value transportation fuels. CVI is also a producer of ammonia and urea ammonia nitrate fertilizers. CVI's petroleum business includes full-coking sour crude refinery in Coffeyville, KS. Its efforts to reward its shareholders underline its strong financial position. The robust Nitrogen Fertilizer unit is supporting growth.
CVR Energy, currently carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.30% over the past 60 days.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bunge : Headquartered in St. Louis, MO, Bunge operates as an agribusiness firm, delivering essential food, feed and fuel across the globe. BG is reportedly the world’s leader in oilseed processing, and a leading producer and supplier of specialty plant-based oils and fats.
Bunge delivered a trailing four-quarter earnings surprise of 50.7%, on average. BG has a long-term earnings growth expectation of 6.7%. It currently carries a Zacks Rank of 3.
Cardinal Health is being well-served by its pharmaceutical segment. Its diversified product portfolio bodes well. CAH’s acquisition-driven strategy is encouraging as well.
Cardinal Health is currently Zacks #3 Ranked. The Zacks Consensus Estimate for CAH’s current-year earnings has risen 2.7% year over year from the 2021 actuals.
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 backtest 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.