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5 Broker-Friendly Stocks to Rely On Amid Market Chaos
Year 2022 was marked by extreme turbulence and volatility. To combat the sky-high inflation, the Fed adopted a hawkish stance and raised interest rates multiple times during the course of the year. Despite moderating a little bit, inflation remains high in the United States. Consequently, further rate hikes in 2023 are likely.
The sky-high inflation apart, uncertainty due to the Russia-Ukraine war and the resurgence of COVID-19 cases, particularly in China, are further concerns. Despite the uncertainty, shunning equities is not an advisable option. We believe that investors should include broker-favorite stocks like American Airlines, Cleveland-Cliffs, Boise Cascade Co., Thor Industries and Caleres in their watchlist.
Brokers, irrespective of their types (sell-side, buy-side or independent), undertake thorough research of the stocks covered by them. They 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. Consequently, the opinion of brokers should act as a valuable guide for investors while deciding their course of action (buy, sell or hold) on a particular stock.
Movement of Earnings Estimates: A Solid Pointer
Since brokers follow the stocks in their coverage minutely, they revise their earnings estimates after carefully examining the pros and cons of an event for the concerned company. In fact, a rating upgrade or downgrade by brokers has the potential to immediately influence the price of the stock.
Given the expertise and know-how of brokers in investment matters, it is natural for investors to believe that there is a solid reason/logic behind brokers improving their recommendation on a particular stock. In fact, a rating upgrade generally leads to stock price appreciation and vice versa. Estimates can move north for a number of reasons — favorable earnings performance, bullish guidance, product launch or any favorable macro scenario.
To take care of the earnings performance, we have designed a screen based on improving analyst recommendations and upward estimate revisions over the last four weeks.
Ignore the Top Line at Your Peril
To design a winning strategy, it is not wise to consider only the bottom line only. In fact, according to some market watchers, a top-line outperformance is more creditable for a stock than mere earnings beat under some circumstances. Therefore, to make our strategy full-proof, one needs to address top-line concerns as well. We have considered the price/sales ratio, which serves as a strong complementary valuation metric, for screening 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.
Cleveland-Cliffs is a leading iron ore producer in the United States. It supplies differentiated iron ore pellets under long-term contracts to major blast furnace steel producers in North America. The Mining and Pelletizing operation gains from low-cost, high-quality iron ore pellet production with substantial logistics and transportation advantages to serve the Great Lakes steel market. The company should gain from its merger with AK Steel Holding Corporation.
Over the past 60 days, the Zacks Consensus Estimate for CLF’s 2023 earnings has been revised 54% upward. Cleveland-Cliffs currently sports a Zacks Rank #1.
Boise Cascade: Based in Boise, ID, BCC makes wood products and distributes building materials in the United States as well as Canada. Boise Cascade’s Building Materials Distribution and Wood Products segments are gaining strength from strong end-product demand as well as higher commodity product prices. It has also been increasing commodity offerings that will instill growth in the existing markets, underserved markets and across its entire national footprint.
Over the past 60 days, the Zacks Consensus Estimate for 2023 earnings has been revised 0.8% upward. BCC currently carries a Zacks Rank #3 (Hold).
Thor Industries is benefiting from its growth by acquisition strategy. The buyout of Germany-based EHG made Thor the largest recreational vehicle (RV) manufacturer in the world. Its cash flow generating ability also bodes well.
Over the past 30 days, the Zacks Consensus Estimate for 2023 earnings has been revised 0.8% upward. THO currently carries a Zacks Rank #3.
Caleres is a leading footwear retailer and wholesaler in the United States, China, Canada and Guam. The company operates through Famous Footwear and Brand Portfolio segments. This Saint Louis, MO-based company has been benefiting from the positive consumer demand trends and accelerated recovery in the footwear marketplace, aiding its sales.
The momentum in the Famous Footwear brand is expected to contribute meaningfully to sales growth. Strong performances of CAL’s emerging brands, including Vionic, Sam Edelman, Allen Edmonds and Blowfish Malibu, are expected to be growth drivers. Caleres has an excellent surprise history with its earnings having surpassed the Zacks Consensus Estimate in each of the last four quarters, the average being 26% CAL currently carries a Zacks Rank #3.
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Zacks.com featured highlights American Airlines, Cleveland-Cliffs, Boise Cascade, Thor Industries and Caleres
For Immediate Release
Chicago, IL – January 13, 2023 – Stocks in this week’s article are American Airlines (AAL - Free Report) , Cleveland-Cliffs (CLF - Free Report) , Boise Cascade Co. (BCC - Free Report) , Thor Industries (THO - Free Report) and Caleres (CAL - Free Report) .
5 Broker-Friendly Stocks to Rely On Amid Market Chaos
Year 2022 was marked by extreme turbulence and volatility. To combat the sky-high inflation, the Fed adopted a hawkish stance and raised interest rates multiple times during the course of the year. Despite moderating a little bit, inflation remains high in the United States. Consequently, further rate hikes in 2023 are likely.
The sky-high inflation apart, uncertainty due to the Russia-Ukraine war and the resurgence of COVID-19 cases, particularly in China, are further concerns. Despite the uncertainty, shunning equities is not an advisable option. We believe that investors should include broker-favorite stocks like American Airlines, Cleveland-Cliffs, Boise Cascade Co., Thor Industries and Caleres in their watchlist.
Brokers, irrespective of their types (sell-side, buy-side or independent), undertake thorough research of the stocks covered by them. They 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. Consequently, the opinion of brokers should act as a valuable guide for investors while deciding their course of action (buy, sell or hold) on a particular stock.
Movement of Earnings Estimates: A Solid Pointer
Since brokers follow the stocks in their coverage minutely, they revise their earnings estimates after carefully examining the pros and cons of an event for the concerned company. In fact, a rating upgrade or downgrade by brokers has the potential to immediately influence the price of the stock.
Given the expertise and know-how of brokers in investment matters, it is natural for investors to believe that there is a solid reason/logic behind brokers improving their recommendation on a particular stock. In fact, a rating upgrade generally leads to stock price appreciation and vice versa. Estimates can move north for a number of reasons — favorable earnings performance, bullish guidance, product launch or any favorable macro scenario.
To take care of the earnings performance, we have designed a screen based on improving analyst recommendations and upward estimate revisions over the last four weeks.
Ignore the Top Line at Your Peril
To design a winning strategy, it is not wise to consider only the bottom line only. In fact, according to some market watchers, a top-line outperformance is more creditable for a stock than mere earnings beat under some circumstances. Therefore, to make our strategy full-proof, one needs to address top-line concerns as well. We have considered the price/sales ratio, which serves as a strong complementary valuation metric, for screening 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 Zacks Consensus Estimate for AAL’s 2023 earnings has been revised 13.1% upward. American Airlines currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cleveland-Cliffs is a leading iron ore producer in the United States. It supplies differentiated iron ore pellets under long-term contracts to major blast furnace steel producers in North America. The Mining and Pelletizing operation gains from low-cost, high-quality iron ore pellet production with substantial logistics and transportation advantages to serve the Great Lakes steel market. The company should gain from its merger with AK Steel Holding Corporation.
Over the past 60 days, the Zacks Consensus Estimate for CLF’s 2023 earnings has been revised 54% upward. Cleveland-Cliffs currently sports a Zacks Rank #1.
Boise Cascade: Based in Boise, ID, BCC makes wood products and distributes building materials in the United States as well as Canada. Boise Cascade’s Building Materials Distribution and Wood Products segments are gaining strength from strong end-product demand as well as higher commodity product prices. It has also been increasing commodity offerings that will instill growth in the existing markets, underserved markets and across its entire national footprint.
Over the past 60 days, the Zacks Consensus Estimate for 2023 earnings has been revised 0.8% upward. BCC currently carries a Zacks Rank #3 (Hold).
Thor Industries is benefiting from its growth by acquisition strategy. The buyout of Germany-based EHG made Thor the largest recreational vehicle (RV) manufacturer in the world. Its cash flow generating ability also bodes well.
Over the past 30 days, the Zacks Consensus Estimate for 2023 earnings has been revised 0.8% upward. THO currently carries a Zacks Rank #3.
Caleres is a leading footwear retailer and wholesaler in the United States, China, Canada and Guam. The company operates through Famous Footwear and Brand Portfolio segments. This Saint Louis, MO-based company has been benefiting from the positive consumer demand trends and accelerated recovery in the footwear marketplace, aiding its sales.
The momentum in the Famous Footwear brand is expected to contribute meaningfully to sales growth. Strong performances of CAL’s emerging brands, including Vionic, Sam Edelman, Allen Edmonds and Blowfish Malibu, are expected to be growth drivers. Caleres has an excellent surprise history with its earnings having surpassed the Zacks Consensus Estimate in each of the last four quarters, the average being 26% CAL currently carries a Zacks Rank #3.
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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2038325/5-broker-friendly-stocks-to-rely-on-amid-the-market-chaos
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.