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New Analysts Initiate Coverage: 5 Top-Ranked Stocks to Buy
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New analyst coverage unearths extensive data on stocks for investors. Analysts are privy to vital information that is crucial for making investment decisions. Hence they are much relied on as the lack of information creates chances of misinterpretation (over- or under-valued).
Hertz Global Holdings, Inc. (HTZ - Free Report) , Titan Machinery Inc. (TITN - Free Report) , Suburban Propane Partners, L.P. (SPH - Free Report) , TCG BDC, Inc. (CGBD - Free Report) , and The Chefs' Warehouse, Inc. (CHEF - Free Report) are some stocks that have seen new analyst coverage lately and therefore are expected to attract investors' attention.
Analysts don’t add a stock to their coverage randomly. New coverage on a stock is usually the result of huge investor focus on it or its promising prospects.
Interestingly, stocks typically see an incremental upward price movement with new analyst coverage compared to what they witness with the continuation of existing analyst coverage. Of course, the price movement depends on the recommendations from new analysts. Positive recommendations — Buy and Strong Buy — lead to a significant positive incremental price reaction than Strong Sell, Sell or Hold recommendations.
If an analyst gives a new recommendation on a company that has limited or no analyst coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.
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 in mind, it’s a good strategy to focus on the number of analyst recommendations that have increased over the past few weeks.
Below, we have selected five stocks that have seen increased analyst coverage over the past 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 also consider other relevant parameters to make it 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 five of the 11 stocks that passed the screen:
Hertz Global Holdings, Inc. (HTZ - Free Report) : Based in Estero, FL, this company operates as a vehicle rental company.
Hertz currently sports a Zacks Rank #1 (Strong Buy). The stock has declined 12.6% year to date (YTD) versus the industry’s 1.2% growth. Earnings estimates have increased 59% for 2022 over the past 30 days, depicting anaysts’ optimism for the company’s prospects. Earnings are expected to grow 587.5% in 2022. You can see the complete list of today’s Zacks #1 Rank stocks here.
Titan Machinery Inc. (TITN - Free Report) : Based in West Fargo, ND, Titan Machinery is an agricultural and construction equipment retailer in the United States and Europe.
Titan currently sports a Zacks Rank #1. The stock has gained 63.2% YTD, faring better than the industry’s 30.8% rally. The fiscal 2022 and 2023 Zacks Consensus Estimate for this firm indicates 103.2% and 12.3% earnings per share growth year over year, respectively.
Suburban Propane Partners, L.P. (SPH - Free Report) : This Whippany, NJ-based company engages in retail marketing and distribution of propane, fuel oil, and refined fuels.
Suburban currently sports a Zacks Rank #1. Although the stock has declined 5.3% YTD (against the industry’s 50.8% rally), earnings estimates have increased 15.6% for fiscal 2022 over the past 30 days, depicting anaysts’ optimism. The fiscal 2022 Zacks Consensus Estimate for this firm indicates 6.7% year-over-year earnings per share growth.
TCG BDC, Inc. (CGBD - Free Report) : This New York, United States-based company is an externally managed specialty finance company.
TCG BDC currently holds a Zacks Rank #2 (Buy). The stock has gained 32.1% year to date (YTD), faring better than the industry’s 13.6% rally. Earnings are expected to grow 2.6% in 2022.
The Chefs' Warehouse, Inc. (CHEF - Free Report) : Based in Ridgefield, CT, this company distributes specialty food products.
Chefs' currently carries a Zacks Rank #2. The stock has gained 19.4% YTD, faring better than the industry’s 0.8% rally. Earnings are expected to grow 587.5% in 2022.
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.
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New Analysts Initiate Coverage: 5 Top-Ranked Stocks to Buy
New analyst coverage unearths extensive data on stocks for investors. Analysts are privy to vital information that is crucial for making investment decisions. Hence they are much relied on as the lack of information creates chances of misinterpretation (over- or under-valued).
Hertz Global Holdings, Inc. (HTZ - Free Report) , Titan Machinery Inc. (TITN - Free Report) , Suburban Propane Partners, L.P. (SPH - Free Report) , TCG BDC, Inc. (CGBD - Free Report) , and The Chefs' Warehouse, Inc. (CHEF - Free Report) are some stocks that have seen new analyst coverage lately and therefore are expected to attract investors' attention.
Analysts don’t add a stock to their coverage randomly. New coverage on a stock is usually the result of huge investor focus on it or its promising prospects.
Interestingly, stocks typically see an incremental upward price movement with new analyst coverage compared to what they witness with the continuation of existing analyst coverage. Of course, the price movement depends on the recommendations from new analysts. Positive recommendations — Buy and Strong Buy — lead to a significant positive incremental price reaction than Strong Sell, Sell or Hold recommendations.
If an analyst gives a new recommendation on a company that has limited or no analyst coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.
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 in mind, it’s a good strategy to focus on the number of analyst recommendations that have increased over the past few weeks.
Below, we have selected five stocks that have seen increased analyst coverage over the past 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 also consider other relevant parameters to make it 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 five of the 11 stocks that passed the screen:
Hertz Global Holdings, Inc. (HTZ - Free Report) : Based in Estero, FL, this company operates as a vehicle rental company.
Hertz currently sports a Zacks Rank #1 (Strong Buy). The stock has declined 12.6% year to date (YTD) versus the industry’s 1.2% growth. Earnings estimates have increased 59% for 2022 over the past 30 days, depicting anaysts’ optimism for the company’s prospects. Earnings are expected to grow 587.5% in 2022. You can see the complete list of today’s Zacks #1 Rank stocks here.
Titan Machinery Inc. (TITN - Free Report) : Based in West Fargo, ND, Titan Machinery is an agricultural and construction equipment retailer in the United States and Europe.
Titan currently sports a Zacks Rank #1. The stock has gained 63.2% YTD, faring better than the industry’s 30.8% rally. The fiscal 2022 and 2023 Zacks Consensus Estimate for this firm indicates 103.2% and 12.3% earnings per share growth year over year, respectively.
Suburban Propane Partners, L.P. (SPH - Free Report) : This Whippany, NJ-based company engages in retail marketing and distribution of propane, fuel oil, and refined fuels.
Suburban currently sports a Zacks Rank #1. Although the stock has declined 5.3% YTD (against the industry’s 50.8% rally), earnings estimates have increased 15.6% for fiscal 2022 over the past 30 days, depicting anaysts’ optimism. The fiscal 2022 Zacks Consensus Estimate for this firm indicates 6.7% year-over-year earnings per share growth.
TCG BDC, Inc. (CGBD - Free Report) : This New York, United States-based company is an externally managed specialty finance company.
TCG BDC currently holds a Zacks Rank #2 (Buy). The stock has gained 32.1% year to date (YTD), faring better than the industry’s 13.6% rally. Earnings are expected to grow 2.6% in 2022.
The Chefs' Warehouse, Inc. (CHEF - Free Report) : Based in Ridgefield, CT, this company distributes specialty food products.
Chefs' currently carries a Zacks Rank #2. The stock has gained 19.4% YTD, faring better than the industry’s 0.8% rally. Earnings are expected to grow 587.5% in 2022.
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