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Recent Analyst Upgrades Add Shine to These 5 Stocks
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The opinion of brokers is highly valued by investors while making their investment decisions. Brokers are well-equipped with the requisite know-how about the nitty gritties associated with the investment world. Individual investors, more often than not, do not have access to such detailed and well-researched information.
Broker Advice- An Invaluable Guide
Brokers, on the other hand, invest a lot of time in researching stocks under their coverage. Out of the three types of brokers (sell-side, buy-side and independent) present, sell-side analysts are the most common. They are employed by various brokerage firms to provide unbiased opinion on stocks. Meanwhile, buy-side analysts are employed by hedge funds, mutual funds and others while independent analysts directly sell their reports to investors.
Given their thorough understanding of the stock market, it is prudent for investors to pay heed to broker advice in order to design a winning portfolio. One of the tried and tested strategies is to maintain a well-diversified portfolio (i.e. including stocks from different industries) so that one rakes in solid returns irrespective of market conditions. However, the task is no mean feat given the plethora of stocks present in the market.
Thus, selecting the right stocks will require help from “experts” in the field. Such investment specialists attend conference calls, company presentations and also interact with the management.
Brokers revise their earnings estimates after carefully examining the pros and cons of an event for the concerned stock. Naturally, their stock related actions (upgrade or downgrade) serve as an invaluable guide as far as fixing target price of stock (s) is concerned.
Making the Most of Broker Opinions
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 have designed a screen to shortlist stocks based on improving analyst recommendation and upward revisions to 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 has been 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 the 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).
We have also added the following screening parameters to ensure that the strategy is a winning one:
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 (as 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 in the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com (This takes out the ADR and Canadian stocks).
Based in Columbus, OH and founded in 1967, Big Lots, Inc. (BIG - Free Report) is a broad-line closeout retailer in the U.S. The company offers products under various merchandising categories, which include Food, Consumables, Furniture, Seasonal, Soft Home, Hard Home, and Electronics & Accessories.This Zacks Rank #2 (Buy) company has an impressive track record with respect to earnings, having surpassed the Zacks Consensus Estimate in three of the last four quarters by an average of 8.02%.
Big 5 Sporting Goods Corp. (BGFV - Free Report) was founded in 1955 and is based in El Segundo, CA. This sporting goods retailer has seen a 24% rise in the Zacks Consensus Estimate for 2016 over the last 90 days to 57 cents. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Genco Shipping & Trading Ltd. (GNK - Free Report) : This Zacks Rank #2 company is based in New York and engages in ocean transportation of drybulk cargoes worldwide. The company reported a positive earnings surprise of 4.12% in the last quarter.
The Ridgefield, CT-based The Chefs' Warehouse, Inc. (CHEF - Free Report) is a distributor of specialty food products in the United States and Canada. The Zacks Rank #2 company has an impressive earnings growth rate projection (3-5 years) of 12.5%.
PCM, Inc. is a technology solutions provider to businesses, government and educational institutions and individual consumers. This Zacks Rank #3 company has seen the Zacks Consensus Estimate for 2016 surge over 16% over the last seven days to $1.83.
Here are five of the 10 stocks that made it through the screen:
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.
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Recent Analyst Upgrades Add Shine to These 5 Stocks
The opinion of brokers is highly valued by investors while making their investment decisions. Brokers are well-equipped with the requisite know-how about the nitty gritties associated with the investment world. Individual investors, more often than not, do not have access to such detailed and well-researched information.
Broker Advice- An Invaluable Guide
Brokers, on the other hand, invest a lot of time in researching stocks under their coverage. Out of the three types of brokers (sell-side, buy-side and independent) present, sell-side analysts are the most common. They are employed by various brokerage firms to provide unbiased opinion on stocks. Meanwhile, buy-side analysts are employed by hedge funds, mutual funds and others while independent analysts directly sell their reports to investors.
Given their thorough understanding of the stock market, it is prudent for investors to pay heed to broker advice in order to design a winning portfolio. One of the tried and tested strategies is to maintain a well-diversified portfolio (i.e. including stocks from different industries) so that one rakes in solid returns irrespective of market conditions. However, the task is no mean feat given the plethora of stocks present in the market.
Thus, selecting the right stocks will require help from “experts” in the field. Such investment specialists attend conference calls, company presentations and also interact with the management.
Brokers revise their earnings estimates after carefully examining the pros and cons of an event for the concerned stock. Naturally, their stock related actions (upgrade or downgrade) serve as an invaluable guide as far as fixing target price of stock (s) is concerned.
Making the Most of Broker Opinions
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 have designed a screen to shortlist stocks based on improving analyst recommendation and upward revisions to 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 has been 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 the 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).
We have also added the following screening parameters to ensure that the strategy is a winning one:
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 (as 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 in the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com (This takes out the ADR and Canadian stocks).
Based in Columbus, OH and founded in 1967, Big Lots, Inc. (BIG - Free Report) is a broad-line closeout retailer in the U.S. The company offers products under various merchandising categories, which include Food, Consumables, Furniture, Seasonal, Soft Home, Hard Home, and Electronics & Accessories.This Zacks Rank #2 (Buy) company has an impressive track record with respect to earnings, having surpassed the Zacks Consensus Estimate in three of the last four quarters by an average of 8.02%.
Big 5 Sporting Goods Corp. (BGFV - Free Report) was founded in 1955 and is based in El Segundo, CA. This sporting goods retailer has seen a 24% rise in the Zacks Consensus Estimate for 2016 over the last 90 days to 57 cents. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Genco Shipping & Trading Ltd. (GNK - Free Report) : This Zacks Rank #2 company is based in New York and engages in ocean transportation of drybulk cargoes worldwide. The company reported a positive earnings surprise of 4.12% in the last quarter.
The Ridgefield, CT-based The Chefs' Warehouse, Inc. (CHEF - Free Report) is a distributor of specialty food products in the United States and Canada. The Zacks Rank #2 company has an impressive earnings growth rate projection (3-5 years) of 12.5%.
PCM, Inc. is a technology solutions provider to businesses, government and educational institutions and individual consumers. This Zacks Rank #3 company has seen the Zacks Consensus Estimate for 2016 surge over 16% over the last seven days to $1.83.
Here are five of the 10 stocks that made it through the screen:
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.