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Earnings Growth & Price Strength Make MSCI (MSCI) a Stock to Watch

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Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.

The Zacks Premium service makes this easier. It features daily updates of the Zacks Rank and Zacks Industry Rank; full access to the Zacks #1 Rank List; Equity Research reports; and Premium stock screens like the Earnings ESP filter. All of these can help you quickly identify what stocks to buy, what to sell, and what are today's hottest industries.

Also included in Zacks Premium is the Focus List. This is a long-term portfolio of top stocks that have all the traits to beat the market.

Breaking Down the Zacks Focus List

If you could, wouldn't you jump at the chance for access to a curated list of stocks to kickstart your investing journey?

Enter the Zacks Focus List. It's a portfolio made up of 50 stocks that are set to beat the market over the next 12 months; each company selected serves as a foundation for long-term investors looking to create an individual portfolio.

What makes the Focus List even more helpful is that each selection is accompanied by a full Zacks Analyst Report, which explains the reasoning behind every stock's selection and why we believe it's a good pick for the long-term.

The portfolio's past performance only solidifies why investors should consider it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500's return of 9.38%. Cumulatively, the portfolio has returned 2,519.23% while the S&P returned 854.95%. Returns are for the period of February 1, 1996 to March 31, 2021.

Focus List Methodology

When stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.

Earnings estimates, or expectations of growth and profitability, come from brokerage analysts who track publicly traded companies; these analysts work together with company management to analyze every aspect that may affect future earnings, like interest rates, the economy, and sector and industry optimism.

Earnings estimate revisions are very important, since investors also need to take into consideration what a company will earn in the future.

Stocks that receive upward earnings estimate revisions are more likely to receive even more upward changes in the future. For example, if an analyst raised their estimates last month, they're more likely to do it again this month, and other analysts are likely to do the same.

Utilizing the power of earnings estimate revisions is when the Zacks Rank joins the party. A unique, proprietary stock-rating model, the Zacks Rank uses changes to quarterly earnings expectations to help investors create a winning portfolio.

Four primary factors make up the Zacks Rank: Agreement, Magnitude, Upside, and Surprise. Each is given a raw score that's recalculated every night and compiled into the Rank, and with this data, stocks are then classified into five groups, ranging from "Strong Buy" to "Strong Sell."

The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.

It can be very profitable to buy stocks with rising earnings estimates, as stock prices respond to revisions. By adding Focus List stocks, there's a great chance you'll be getting into companies whose future earnings estimates will be raised, which can lead to price momentum.

Focus List Spotlight: MSCI (MSCI - Free Report)

MSCI Inc. provides investment decision support tools, including indexes; portfolio construction and risk management products and services; Environmental, Social and Governance (ESG) research and ratings; and real estate research, reporting and benchmarking offerings.

On October 10, 2018, MSCI was added to the Focus List at $166.96 per share. Shares have increased 229.32% to $549.83 since then, and the company is a #3 (Hold) on the Zacks Rank.

For fiscal 2022, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.24 to $11.37. MSCI boasts an average earnings surprise of 4.7%.

Earnings for MSCI are forecasted to see growth of 14.3% for the current fiscal year as well.

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