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5 Broker-Friendly Stocks to Buy Despite the Current Jitters
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The ongoing tensions between Russia and Ukraine have intensified the volatility of the U.S. market, which is already suffering inflation and supply-chain constraints. The sanctions on Russia following its invasion of Ukraine evoked uncertainty as it is hard or rather impossible to gauge how shunning Russia and its commodities will impact inflation levels. With the possibility of the central bank raising the interest rate in the ongoing month, the market is likely to witness more instability in the near term.
However, irrespective of the market conditions, investors strive to design a winning portfolio of stocks. They, after all, are putting their hard-earned money into stocks. Amid the prevalent confusion, it is almost impossible for individual investors to come up with a lucrative basket of stocks without proper guidance. Therefore, it is in the best interest of investors to seek advice from “experts in the field".
Who Are These Experts and Why?
The “experts” in the area of investing are brokers equipped with thorough knowledge on the space. Brokers, irrespective of their types (sell-side, buy-side or independent), have at their disposal a lot more information on a company and its prospects than individual investors.
To attain their objective, they go through minute details of the publicly available financial documents apart from attending company conference calls and other presentations. Since brokers meticulously follow the stocks in their coverage, they revise their earnings estimates after carefully examining the pros and cons of an event for the concerned company. Naturally, their estimate revisions serve as an important pointer regarding the price of a stock.
In view of the above, it is basically a no-brainer that such wealth of information should be utilized by investors for designing their portfolio. To take care of the earnings performance, we designed a screen based on improving broker recommendations and upward estimate revisions over the last four weeks.
Do Not Ignore the Top Line
However, designing a strategy based solely on the bottom line is unlikely to lead to a promising approach. Actually, according to many market watchers, a revenue beat is more creditable for a company than a mere earnings outperformance. To address the top-line concerns, we included in our screen the price/sales ratio, which serves as a strong complementary valuation metric.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks).
% change in Q (1) est. (4 weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter).
We have also added the following screening parameters to ensure that the strategy is a winning one:
Price-to-Sales = Bot%10 (The lower the ratio the better, companies meeting this criteria are in bottom 10% of our universe of over 7,700 stocks with respect to this ratio).
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com (This takes out the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
Asbury Automotive Group (ABG - Free Report) is one of the largest automotive retailers in the United States. The auto dealer currently sports a Zacks Rank #1 (Strong Buy). With the sustained recovery of the economy from the pandemic blues, auto sales are rebounding, underlined by strong new vehicle sales. Evidently, demand for automotive products and services is solid, aiding Asbury in turn.
Asbury Automotive has an impressive surprise history with its earnings having surpassed the Zacks Consensus Estimate in each of the last four quarters, the average being 29.6%. Shares of ABG have increased 6% in a year’s time. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cross Country Healthcare (CCRN - Free Report) is currently benefiting from the pandemic-induced increase in demand for healthcare staffing, investments in headcount and technology, and higher operational effectiveness. Digital transformation and operational efficiency are enabling CCRN to cater to continuously rising demand in specialties, such as emergency room, operating room, labor, pediatrics, and delivery and medical-surgical services.
The Zacks Consensus Estimate for Cross Country Healthcare’s 2022 earnings has been revised 115% upward in the past 60 days. Shares of CCRN have increased 68% in a year’s time. CCRN currently sports a Zacks Rank of 1.
Arrow Electronics (ARW - Free Report) is one of the world’s largest distributors of electronic components and enterprise computing products. ARW provides one of the broadest product ranges in the space as well as a wide range of value-added services.
The Zacks Consensus Estimate for Arrow Electronics’ 2022 earnings has been revised 18.8% upward in the past 60 days. Shares of ARW have increased 16.6% in a year’s time. CCRN currently sports a Zacks Rank of 1.
Builders FirstSource (BLDR - Free Report) focusses on faster-growth categories, disciplined pricing and strategic buyouts. Acquisitions are integral to BLDR’s growth strategy. BLDR recently concluded the buyout of National Lumber, the largest independent building materials supplier in New England. Also, strong demand for single-family housing is steadily supporting top-line growth. Builders FirstSource has a trailing four-quarter earnings surprise of 74%, on average. It flaunts a Zacks Rank #1. The Zacks Consensus Estimate for BLDR’s 2022 earnings has been revised 21.1% upward in the past 60 days. Shares of BLDR have increased 67.1% in a year’s time.
The Andersons (ANDE - Free Report) is a regional grain merchandiser with diversified businesses in agriculture, plant nutrient formulation and distribution, railcar marketing and general merchandise retailing. ANDE maintains grain and production facilities throughout the Midwest and six retail locations in northern and central Ohio.
The Zacks Consensus Estimate for The Andersons’ 2022 earnings has been revised 4.8% upward in the past 60 days. Shares of ANDE have increased 63.6% in a year’s time. ANDE is currently Zacks #1 Ranked.
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 backtest 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.
Image: Bigstock
5 Broker-Friendly Stocks to Buy Despite the Current Jitters
The ongoing tensions between Russia and Ukraine have intensified the volatility of the U.S. market, which is already suffering inflation and supply-chain constraints. The sanctions on Russia following its invasion of Ukraine evoked uncertainty as it is hard or rather impossible to gauge how shunning Russia and its commodities will impact inflation levels. With the possibility of the central bank raising the interest rate in the ongoing month, the market is likely to witness more instability in the near term.
However, irrespective of the market conditions, investors strive to design a winning portfolio of stocks. They, after all, are putting their hard-earned money into stocks. Amid the prevalent confusion, it is almost impossible for individual investors to come up with a lucrative basket of stocks without proper guidance. Therefore, it is in the best interest of investors to seek advice from “experts in the field".
Who Are These Experts and Why?
The “experts” in the area of investing are brokers equipped with thorough knowledge on the space. Brokers, irrespective of their types (sell-side, buy-side or independent), have at their disposal a lot more information on a company and its prospects than individual investors.
To attain their objective, they go through minute details of the publicly available financial documents apart from attending company conference calls and other presentations. Since brokers meticulously follow the stocks in their coverage, they revise their earnings estimates after carefully examining the pros and cons of an event for the concerned company. Naturally, their estimate revisions serve as an important pointer regarding the price of a stock.
In view of the above, it is basically a no-brainer that such wealth of information should be utilized by investors for designing their portfolio. To take care of the earnings performance, we designed a screen based on improving broker recommendations and upward estimate revisions over the last four weeks.
Do Not Ignore the Top Line
However, designing a strategy based solely on the bottom line is unlikely to lead to a promising approach. Actually, according to many market watchers, a revenue beat is more creditable for a company than a mere earnings outperformance. To address the top-line concerns, we included in our screen the price/sales ratio, which serves as a strong complementary valuation metric.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks).
% change in Q (1) est. (4 weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter).
We have also added the following screening parameters to ensure that the strategy is a winning one:
Price-to-Sales = Bot%10 (The lower the ratio the better, companies meeting this criteria are in bottom 10% of our universe of over 7,700 stocks with respect to this ratio).
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com (This takes out the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
Asbury Automotive Group (ABG - Free Report) is one of the largest automotive retailers in the United States. The auto dealer currently sports a Zacks Rank #1 (Strong Buy). With the sustained recovery of the economy from the pandemic blues, auto sales are rebounding, underlined by strong new vehicle sales. Evidently, demand for automotive products and services is solid, aiding Asbury in turn.
Asbury Automotive has an impressive surprise history with its earnings having surpassed the Zacks Consensus Estimate in each of the last four quarters, the average being 29.6%. Shares of ABG have increased 6% in a year’s time. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cross Country Healthcare (CCRN - Free Report) is currently benefiting from the pandemic-induced increase in demand for healthcare staffing, investments in headcount and technology, and higher operational effectiveness. Digital transformation and operational efficiency are enabling CCRN to cater to continuously rising demand in specialties, such as emergency room, operating room, labor, pediatrics, and delivery and medical-surgical services.
The Zacks Consensus Estimate for Cross Country Healthcare’s 2022 earnings has been revised 115% upward in the past 60 days. Shares of CCRN have increased 68% in a year’s time. CCRN currently sports a Zacks Rank of 1.
Arrow Electronics (ARW - Free Report) is one of the world’s largest distributors of electronic components and enterprise computing products. ARW provides one of the broadest product ranges in the space as well as a wide range of value-added services.
The Zacks Consensus Estimate for Arrow Electronics’ 2022 earnings has been revised 18.8% upward in the past 60 days. Shares of ARW have increased 16.6% in a year’s time. CCRN currently sports a Zacks Rank of 1.
Builders FirstSource (BLDR - Free Report) focusses on faster-growth categories, disciplined pricing and strategic buyouts. Acquisitions are integral to BLDR’s growth strategy. BLDR recently concluded the buyout of National Lumber, the largest independent building materials supplier in New England. Also, strong demand for single-family housing is steadily supporting top-line growth. Builders FirstSource has a trailing four-quarter earnings surprise of 74%, on average. It flaunts a Zacks Rank #1. The Zacks Consensus Estimate for BLDR’s 2022 earnings has been revised 21.1% upward in the past 60 days. Shares of BLDR have increased 67.1% in a year’s time.
The Andersons (ANDE - Free Report) is a regional grain merchandiser with diversified businesses in agriculture, plant nutrient formulation and distribution, railcar marketing and general merchandise retailing. ANDE maintains grain and production facilities throughout the Midwest and six retail locations in northern and central Ohio.
The Zacks Consensus Estimate for The Andersons’ 2022 earnings has been revised 4.8% upward in the past 60 days. Shares of ANDE have increased 63.6% in a year’s time. ANDE is currently Zacks #1 Ranked.
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 backtest 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.