Selecting stocks from the vast investment universe is not an easy task. For this, you will have to understand the fundamentals of every company and try to place them against the present economic background to figure out how it may fare as an investment.
One way to cut this task out is to follow broker recommendation. Brokers have in-depth understanding into what’s happening in a particular company as they directly communicate with company management. Further, they have a deeper insight of the overall industry.
Brokers analyze a company’s publicly available financial statements, listen to conference calls and engage in talks directly with the top management. At times, they even talk with customers to gauge what they like or dislike about the products and services offered by the company.
So, after thorough research, brokers decide to rate that particular company’s stock. Hence, when a broker upgrades a stock, you can easily rely on it. However, solely depending on analysts’ upgrades is not the right way to build your investment portfolio. You should also take into consideration other factors to ensure solid returns.
Selecting the Winning Strategy
We have a screening strategy that will help you in your search for potential winners:
Broker Rating Upgrades (four weeks) of 1% or more: The screen selects stocks that have witnessed broker rating upgrades of 1% or more over the last four weeks.
Current Price greater than $5: The stocks must be trading above $5.
Average 20-day Volume greater than 100,000: A large trading volume guarantees that the stock is easily tradable.
Zacks Rank equal to #1 or 2: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) have a proven record of success. You can see the complete list of today’s Zacks #1 Rank stocks here.
VGM Score of A or B: Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 offer the best upside potential.
Here are the five of the nine stocks that qualified the screening:
Activision Blizzard, Inc. (ATVI - Free Report) is a leading developer and publisher of console, online and mobile games. This Santa Monica, CA-based company’s earnings for 2020 are projected to grow at the rate of 43.6%. The stock, carrying a Zacks Rank #2 at present, has witnessed 4.6% upward revision in broker ratings over the past four weeks.
Headquartered in Herndon, VA, Beacon Roofing Supply, Inc. (BECN - Free Report) is the largest distributor of residential and non-residential roofing materials in the United States and Canada. Its earnings for fiscal 2021 are projected to grow at the rate of 13.5%. The stock, currently sporting a Zacks Rank #1, has witnessed 14.3% upward revision in broker ratings over the past four weeks.
AGCO Corporation (AGCO - Free Report) is a leading manufacturer and distributor of agricultural equipment and related replacement parts. This Duluth, GA-based company’s earnings are projected to increase 27.5% for 2021. The stock, sporting a Zacks Rank #1 at present, has witnessed 8.3% upward revision in broker ratings over the past four weeks.
Based in North Reading, MA, Teradyne Inc. (TER - Free Report) is a leading provider of automated test equipment. The company’s current-year earnings are projected to rise 35.3%. The stock, currently carrying a Zacks Rank #2, has witnessed 7.7% upward revision in broker ratings over the past four weeks.
Air Transport Services Group, Inc. (ATSG - Free Report) operates in the airfreight and logistics industry. This Wilmington, OH-based company’s earnings for 2020 are projected to grow at the rate of 1%. The stock, carrying a Zacks Rank #2 at present, has witnessed 20% upward revision in broker ratings over the past four weeks.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software.
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.
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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