For Immediate Release
Chicago, IL – March 23, 2021 – Stocks in this week’s article are UFP Industries, Inc. (
UFPI Quick Quote UFPI - Free Report) , Interactive Brokers Group, Inc. ( IBKR Quick Quote IBKR - Free Report) , Avid Bioservices, Inc. ( CDMO Quick Quote CDMO - Free Report) , Amtech Systems, Inc. (ASYS) and Gaia, Inc. ( GAIA Quick Quote GAIA - Free Report) . These 5 Stocks Are Safe Bets, Courtesy of New Analyst Coverage
New analyst coverage provides extensive data on stocks for investors. Analysts are privy to vital information, which is crucial for investment decisions. Lack of information creates chances of misinterpretation of stocks (over- or under-valued).
Coverage initiation on a stock by analyst(s) usually portrays higher investor inclination. Investors, on their part, often assume that there is something special in a stock to attract analysts to cover it. In other words, they believe that the company coming under the microscope definitely holds some value.
Obviously, stocks are not randomly chosen to cover. New coverage on a stock usually reflects a reassuring future envisioned by the analyst(s). At times, increased investor focus on a stock motivates analysts to take a closer look at it. After all, who doesn’t like to produce something that is already in demand?
Hence, we often find that analysts’ ratings on newly-added stocks are more favorable than ratings on stocks under continuous coverage. Needless to say, the average change in broker recommendation is preferred over a single recommendation change.
Impact on Price Movement
The price movement of a stock generally depends on the recommendations on it from new analysts. Usually, stocks see an upward price movement on new analyst coverage compared to what was witnessed with a rating upgrade under an existing coverage.
Positive recommendations – Buy and Strong Buy – generally lead to a significantly positive price reaction than Hold recommendations. On the contrary, analysts hardly initiate coverage with a Strong Sell or Sell recommendation.
Now, if an analyst gives a new recommendation on a company that has limited or no existing coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1283538/these-5-stocks-are-safe-bets-courtesy-of-new-analyst-coverage 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. About Screen of the Week
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