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.
Coverage initiation on a stock by an analyst is not a random act. It takes thorough evaluation and substantial investor focus on the stock or its promising prospects.
Interestingly, stocks typically see an incremental upward price movement with new analyst coverage compared to what they witness with continuation of existing analyst coverage. Of course, the price movement depends on the recommendations from the new analysts. Positive recommendations — Buy and Strong Buy — lead to a significant positive incremental price reaction than Strong Sell, Sell or Hold recommendations.
Moreover, if an analyst gives a new recommendation on a company that has limited or no analyst coverage, investors start taking notice. Also, any new information attracts portfolio managers to build a position in the stock.
However, one should preferably look for the average change in broker recommendation rather than a single recommendation change. Then again, an upgrade, an initiation or even increased coverage is equally important.
Keeping this mind, it’s a good strategy to focus on the number of analyst recommendations that have increased over the last few weeks.
Below, we have selected four stocks that have seen increased analyst coverage over the last few weeks.
Screening Criteria
Number of Broker Ratings now greater than the Number of Broker Ratings four weeks ago (This will shortlist stocks that have recent new coverage).
Average Broker Rating less than Average Broker Rating four weeks ago ('Less than' means 'better than' four weeks ago).
Increased analyst coverage and improving average rating are the primary criteria of this strategy but one should consider other relevant parameters to make the strategy foolproof.
Here are the other screening parameters:
Price greater than or equal to $5 (as a stock below $5 will not likely create significant interest for most investors).
Average Daily Volume greater than or equal to 100,000 shares (if volume isn’t enough, it will not attract individual investors).
Here are four of the eight stocks that passed the screen:
Applied Therapeutics Inc. (APLT - Free Report) : This New York, NY-based biopharmaceutical company currently sports a Zacks Rank #1 (Strong Buy). Although the stock has underperformed its industry over the past three months, its bottom-line estimates have been trending upward, depicting analysts’ optimism over the company’s earnings growth potential. Loss estimates have narrowed down to $2.73 per share from $3.02 over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Green Brick Partners, Inc. (GRBK - Free Report) : Based in Plano, TX, this is a homebuilding and land development company in the United States. This Zacks Rank #1 stock has gained 81.8% over the past three months compared with the industry’s 27.9% growth. The company’s earnings are expected to grow 40.5% this year.
Frequency Therapeutics, Inc. : Woburn, MA-based clinical-stage biotechnology company currently carries a Zacks Rank #3 (Hold). The company’s bottom line is expected to increase 62.9% in the current year. The stock has gained 47% over the past three months compared with the industry’s 13% growth.
Kelly Services, Inc. (KELYA - Free Report) : Headquartered in Troy, MI, this company provides workforce solutions to various industries worldwide. The Zacks Rank #3 stock has gained 16.6% over the past three months compared with the industry’s 20.1% growth.
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.
Image: Bigstock
4 Stocks to Make the Most of New Analyst Coverage
Coverage initiation on a stock by an analyst is not a random act. It takes thorough evaluation and substantial investor focus on the stock or its promising prospects.
Interestingly, stocks typically see an incremental upward price movement with new analyst coverage compared to what they witness with continuation of existing analyst coverage. Of course, the price movement depends on the recommendations from the new analysts. Positive recommendations — Buy and Strong Buy — lead to a significant positive incremental price reaction than Strong Sell, Sell or Hold recommendations.
Moreover, if an analyst gives a new recommendation on a company that has limited or no analyst coverage, investors start taking notice. Also, any new information attracts portfolio managers to build a position in the stock.
However, one should preferably look for the average change in broker recommendation rather than a single recommendation change. Then again, an upgrade, an initiation or even increased coverage is equally important.
Keeping this mind, it’s a good strategy to focus on the number of analyst recommendations that have increased over the last few weeks.
Below, we have selected four stocks that have seen increased analyst coverage over the last few weeks.
Screening Criteria
Number of Broker Ratings now greater than the Number of Broker Ratings four weeks ago (This will shortlist stocks that have recent new coverage).
Average Broker Rating less than Average Broker Rating four weeks ago ('Less than' means 'better than' four weeks ago).
Increased analyst coverage and improving average rating are the primary criteria of this strategy but one should consider other relevant parameters to make the strategy foolproof.
Here are the other screening parameters:
Price greater than or equal to $5 (as a stock below $5 will not likely create significant interest for most investors).
Average Daily Volume greater than or equal to 100,000 shares (if volume isn’t enough, it will not attract individual investors).
Here are four of the eight stocks that passed the screen:
Applied Therapeutics Inc. (APLT - Free Report) : This New York, NY-based biopharmaceutical company currently sports a Zacks Rank #1 (Strong Buy). Although the stock has underperformed its industry over the past three months, its bottom-line estimates have been trending upward, depicting analysts’ optimism over the company’s earnings growth potential. Loss estimates have narrowed down to $2.73 per share from $3.02 over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Green Brick Partners, Inc. (GRBK - Free Report) : Based in Plano, TX, this is a homebuilding and land development company in the United States. This Zacks Rank #1 stock has gained 81.8% over the past three months compared with the industry’s 27.9% growth. The company’s earnings are expected to grow 40.5% this year.
Frequency Therapeutics, Inc. : Woburn, MA-based clinical-stage biotechnology company currently carries a Zacks Rank #3 (Hold). The company’s bottom line is expected to increase 62.9% in the current year. The stock has gained 47% over the past three months compared with the industry’s 13% growth.
Kelly Services, Inc. (KELYA - Free Report) : Headquartered in Troy, MI, this company provides workforce solutions to various industries worldwide. The Zacks Rank #3 stock has gained 16.6% over the past three months compared with the industry’s 20.1% growth.
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