During an earnings season, market sentiment gets primarily influenced by corporate results and guidance. Though earnings performance is a good enough indicator of a stock’s future performance, identifying growth drivers is not always an easy task.
A company’s better-than-expected earnings may not always translate into solid price appreciation for its stock due to reasons that are not easy to identify. Hence, it is wise to depend on expert advice. One way to do this is to follow broker recommendations. Brokers have a better understanding of stocks, deeper industry knowledge and a grasp over the economy at large. They scrutinize the company’s fundamentals and place them against the current economic backdrop to find out how the stock will fare as an investment option. Brokers go through the company’s publicly available documents, attend conference calls and are in direct communication with the top management. At times, to get more insight into the company’s products and services offered, they even communicate with customers. After an in-depth research, brokers decide to rate the company’s stock. So, when a broker upgrades a stock, you can easily rely on it. Still solely depending on analyst recommendations is not the right way to build your investment portfolio. You should also take into consideration certain other factors to ensure solid returns. Choosing 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 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. of A or B: VGM Score Here are the three of the six stocks that qualified the screening: Dana Incorporated ( DAN Quick Quote DAN - Free Report) provides power-conveyance and energy-management solutions for vehicles and machinery. This Maumee, OH-based company’s earnings for 2021 are projected to increase a whopping 487.2%. The stock, currently carrying a Zacks Rank #2, has witnessed 12.5% upward revision in broker ratings over the past four weeks. Magna International Inc. ( MGA Quick Quote MGA - Free Report) , based in Aurora, Canada, is a manufacturer and supplier of complete automotive components. Its earnings for 2021 are projected to grow at the rate of 87.9%. The stock, which currently sports a Zacks Rank #1, has witnessed 9.1% upward revision in broker ratings over the past four weeks. Westlake Chemical ( WLK Quick Quote WLK - Free Report) is a vertically integrated international producer and supplier of petrochemicals, polymers and building products. This Houston, TX-based company’s earnings are projected to surge 200.4% for 2021. The stock, sporting a Zacks Rank #1 at present, has witnessed 10% 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. . 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