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Recent Broker Rating Upgrades Make These 5 Stocks Attractive
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The Q1 earnings season is in its last leg with majority of the companies having already unveiled their quarterly financial numbers. The picture that has emerged so far is quite encouraging and the Q1 earnings season remains on track to end on a strong note, displaying substantial growth. A high proportion of companies have reported better-than-expected earnings per share in the current reporting cycle.
Generally, an earnings beat leads to stock price appreciation. Given this highly bullish backdrop, investors would like to add outperformers to their portfolios for healthy returns.
However, with a plethora of earnings reports flooding the market during the reporting cycle, pinpointing outperformers is by no means an easy task for individual investors. In the absence of proper guidance, identifying a winning stock is akin to searching for ‘a needle in a haystack’. The proper guidance, in this respect, comes from brokers, who are deemed to be experts, as far as investing knowhow is concerned.
Of the three types of brokers/analysts (sell-side, buy-side and independent) present in the investment world, sell-side analysts are most common. Various brokerage firms employ them to provide unbiased opinion to investors after thorough research. Buy-side analysts are employed by hedge funds, mutual funds etc. while the independent ones simply sell their reports to investors.
Broker Advice - An Invaluable Guide
Brokers, not only scrutinize the publicly available financial documents, but also attend company conference calls and other presentations. Naturally, it is in the best interest of investors to pay heed to such well-researched information as they aim to generate maximum returns from their portfolio. Estimate revisions serve as an important pointer regarding the price of a stock.
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 also been included. The price/sales ratio takes care of the company’s top line, thereby 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).
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 $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com (This takes out the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
Big 5 Sporting Goods Corporation (BGFV - Free Report) is a leading sporting goods retailer in Western U.S. This Zacks Rank #1 (Strong Buy) company has an impressive record with respect to earnings, having surpassed the Zacks Consensus Estimate in each of the last four quarters by an average of 94.48%.
Commercial Vehicle Group Inc. (CVGI - Free Report) supplies interior systems, vision safety solutions and other cab-related products for the global commercial vehicle market, including the heavy-duty (Class 8) truck market, the construction market and other specialized transportation markets. The Zacks Consensus Estimate for full-year 2017 increased by 9 cents to 29 cents per share over the last 60 days for this Zacks Rank #1 company. You can see the complete list of today’s Zacks #1 Rank stocks here.
Boise Cascade Company (BCC - Free Report) is one of the largest producers of engineered wood products and plywood in North America and a U.S. wholesale distributor of building products. This Zacks Rank #1 company has an impressive record with respect to earnings, having surpassed the Zacks Consensus Estimate in three of the last four quarters by an average in excess of 100%.
The Carlyle Group LP (CG - Free Report) is a global alternative asset manager. This Zacks Rank #3 (Hold) company delivered an impressive earnings surprise in excess of 100% in its most recent earnings report.
Based in Los Angeles, AECOM Technology Corporation (ACM - Free Report) is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities, government as well as those in environmental, energy and water businesses. The Zacks Consensus Estimate for fiscal 2017 increased by a cent over the last 60 days to $2.96 per share for this Zacks Rank #3 stock.
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.
Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »
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Recent Broker Rating Upgrades Make These 5 Stocks Attractive
The Q1 earnings season is in its last leg with majority of the companies having already unveiled their quarterly financial numbers. The picture that has emerged so far is quite encouraging and the Q1 earnings season remains on track to end on a strong note, displaying substantial growth. A high proportion of companies have reported better-than-expected earnings per share in the current reporting cycle.
Generally, an earnings beat leads to stock price appreciation. Given this highly bullish backdrop, investors would like to add outperformers to their portfolios for healthy returns.
However, with a plethora of earnings reports flooding the market during the reporting cycle, pinpointing outperformers is by no means an easy task for individual investors. In the absence of proper guidance, identifying a winning stock is akin to searching for ‘a needle in a haystack’. The proper guidance, in this respect, comes from brokers, who are deemed to be experts, as far as investing knowhow is concerned.
Of the three types of brokers/analysts (sell-side, buy-side and independent) present in the investment world, sell-side analysts are most common. Various brokerage firms employ them to provide unbiased opinion to investors after thorough research. Buy-side analysts are employed by hedge funds, mutual funds etc. while the independent ones simply sell their reports to investors.
Broker Advice - An Invaluable Guide
Brokers, not only scrutinize the publicly available financial documents, but also attend company conference calls and other presentations. Naturally, it is in the best interest of investors to pay heed to such well-researched information as they aim to generate maximum returns from their portfolio. Estimate revisions serve as an important pointer regarding the price of a stock.
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 also been included. The price/sales ratio takes care of the company’s top line, thereby 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).
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 $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com (This takes out the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
Big 5 Sporting Goods Corporation (BGFV - Free Report) is a leading sporting goods retailer in Western U.S. This Zacks Rank #1 (Strong Buy) company has an impressive record with respect to earnings, having surpassed the Zacks Consensus Estimate in each of the last four quarters by an average of 94.48%.
Commercial Vehicle Group Inc. (CVGI - Free Report) supplies interior systems, vision safety solutions and other cab-related products for the global commercial vehicle market, including the heavy-duty (Class 8) truck market, the construction market and other specialized transportation markets. The Zacks Consensus Estimate for full-year 2017 increased by 9 cents to 29 cents per share over the last 60 days for this Zacks Rank #1 company. You can see the complete list of today’s Zacks #1 Rank stocks here.
Boise Cascade Company (BCC - Free Report) is one of the largest producers of engineered wood products and plywood in North America and a U.S. wholesale distributor of building products. This Zacks Rank #1 company has an impressive record with respect to earnings, having surpassed the Zacks Consensus Estimate in three of the last four quarters by an average in excess of 100%.
The Carlyle Group LP (CG - Free Report) is a global alternative asset manager. This Zacks Rank #3 (Hold) company delivered an impressive earnings surprise in excess of 100% in its most recent earnings report.
Based in Los Angeles, AECOM Technology Corporation (ACM - Free Report) is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities, government as well as those in environmental, energy and water businesses. The Zacks Consensus Estimate for fiscal 2017 increased by a cent over the last 60 days to $2.96 per share for this Zacks Rank #3 stock.
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.
Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »