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Stocks that boast a Zacks Rank #1 (Strong Buy) title have a long and demonstrable history of outperforming the market over a one to three-month time period. But, this unique ranking is only bestowed upon the top 5% of all stocks within the Zacks Rank universe.

Not only does this stock-picking system help identify the most elite stocks, but it also enables investors to hold a particular company while shares continue to gain in value beyond that three-month investment horizon.

Below is an example that shows investors how they could have realized an almost 60% gain in eight months by following the Zacks Rank.

Westlake Chemical Corp. (WLK - Free Report)

Headquartered in Houston, Texas, Westlake Chemical is a vertically integrated international manufacturer and supplier of petrochemicals, polymers, and fabricated products. The company’s range of products include ethylene, polyethylene, styrene, vinyl intermediates, PVC, PVC pipes, and PVC windows, fence, and decking components.

On July 21, WLK was finally added to the #1 (Strong Buy) list after maintaining a solid run as a #2 (Buy) thanks to impressive first quarter fiscal 2017 results back in May. Both its top and bottom line flew past estimates, with income from operations benefitting from higher sales volumes in all of its key segments. At the closing bell that day, the company’s stock price was $69.94 per share.

Soon after, Westlake went on to report better-than-expected second quarter results, and saw record income in its Vinyls segment, which increased 100% from the prior-year period. This increase was mainly due to earnings contributed by the Axiall acquisition, as well as higher sales prices for PVC resin and caustic soda. While it stayed as a #3 (Hold) for a while afterwards, WLK hit Strong Buy territory once again on October 13. Four months after becoming a #1 pick, the company’s stock price increased almost 21% to $84.42 per share.

From then until almost the end of 2017, Westlake was able to stay a #1 (Strong Buy) stock. During that time, the company reported record results for its third quarter. Earnings surged past our consensus estimate, while revenues about matched expectations. Both its Vinyls and Olefins segments experienced strong demand, with income from operations of $216.5 million and $165.4 million, respectively.

WLK gained Strong Buy status once again on February 23 after reporting fourth quarter results. Overall, 2017 was a strong year for the chemicals company, as it fully integrated Axiall and saw growth on a global scale. Eight months after becoming a #1 pick, the company’s stock price rose nearly 60% to $111.19 per share.

Right now, WLK is still hanging on to that #1 rank, and is trading around $118.50 per share.

Here, this table shows the price performance of WLK (in red), as well as the 12-month forward looking EPS estimate (in green) from the time the stock first earned a Zacks Rank #1 (Strong Buy). During this stretch, WLK never moved lower than a Zacks Rank #3 (Hold).

By utilizing the Zacks Rank, investors are able to easily identify elite stocks that are best positioned to beat the market on a consistent basis, and how to hold those top stocks as they continue to grow.

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