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5 Broker-Friendly Stocks to Tide Over Market Mayhem
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Markets in the United States are currently witnessing severe bouts of volatility, thanks to headwinds like war on Ukraine, sky-high inflation and a spike in coronavirus cases, especially in China. These challenges kept investors on edge and are unlikely to die down anytime soon. As a result, markets will possibly remain choppy, at least in the near term.
However, this prevalent uncertainty should not compel investors to shun equities. They should, as always, look to design a basket of stocks that will fetch them handsome returns, irrespective of the surrounding conditions. However, the task is not an easy one, particularly for individual investors, as a plethora of stocks floods the market at any point of time. Evidently, the advice of “experts” in this field is much sought after by investors.
Who Are the Experts and Why?
The experts in the world of investing are brokers. Brokers scrutinize the publicly available financial documents, and also attend company conference calls and other presentations. Since brokers recommend (buy, sell or hold) a stock after thoroughly analyzing the nitty-gritties associated with the company, it is then perfect for investors to be guided by their direction of estimate revisions while deciding their course of action on a particular stock. The estimate revisions serve as an important pointer regarding the price of a stock. In fact, a rating upgrade generally leads to stock price appreciation. Similarly, the price of a stock may plummet following a rating downgrade.
Estimates can move north for a number of reasons, including a favorable earnings performance, a bullish guidance, product launch or an optimistic macro scenario.
Winning Strategy
The above write-up clearly suggests that one can arrive at a winning portfolio of stocks by following broker actions. Keeping this in mind, we designed a screen to shortlist stocks based on improving analyst recommendations and upward revisions in earnings estimates over the last four weeks.
Also, since the price/sales ratio is a strong complementary valuation metric in the presence of analyst information, it is also being considered. The price/sales ratio takes care of the company’s top line, making the strategy foolproof.
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).
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 qualified the screening:
United Airlines (UAL - Free Report) , currently carrying a Zacks Rank #3 (Hold), is based in Chicago. UAL transports people and cargo not only throughout North America but also destinations in Asia, Europe, the Middle East and Latin America. Upbeat air-travel demand bodes well for UAL. United Airlines’ environmentally-friendly attitude is an added positive. However, high fuel costs are limiting bottom-line growth.
Buoyed by upbeat air-travel demand in the United States, shares of United Airlines gained 10.3% in the past six months. UAL’s earnings outshined the Zacks Consensus Estimate in three of the last four quarters (missing the consensus mark in the remaining one). The average beat is 17.9%.
C.H. Robinson Worldwide (CHRW - Free Report) , currently carrying a Zacks Rank of 3, operates as an asset-light logistics company. This Minnesota-based freight broker is being aided by the improving freight scenario in the United States. Efforts to control costs also bode well. Measures to reward its shareholders instill further confidence in the stock.
C.H. Robinson has an impressive track record with respect to earnings, which surpassed the Zacks Consensus Estimate in three of the trailing four quarters (missing the consensus mark in the remaining one), the average surprise being 16.8%. CHRW shares have gained 4% in the past six months.
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 the emergency room, the operating room, labor, pediatrics, and delivery and medical-surgical services.
The Zacks Consensus Estimate for Cross Country Healthcare’s 2022 earnings has been revised 124.8% upward in the past 60 days. Shares of CCRN have increased 52.4% in a year’s time. CCRN currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PBF Energy (PBF - Free Report) has one of the most complex refining systems in the United States. As a result, the firm has the capacity to generate lighter and better grades of refined products. PBF is based in New Jersey.
PBF currently sports a Zacks Rank #1. The Zacks Consensus Estimate for the stock’s 2022 earnings has been revised 156.2% upward in the past 60 days. Shares of PBF Energy have increased 100.5% in a year’s time.
Cleveland-Cliffs (CLF - Free Report) is the largest producer of iron ore pellets in North America. CLF should gain from its merger with AK Steel and the buyout of ArcelorMittal USA. Higher steel prices should also drive its margins. Besides, CLF is likely to gain from the bright prospects of the HBI project.
Cleveland-Cliffs currently sports a Zacks Rank of 1. The Zacks Consensus Estimate for CLF’s current-year earnings has been revised 9% upward in the past 60 days. The stock has surged 52.9% in a year’s time.
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 Tide Over Market Mayhem
Markets in the United States are currently witnessing severe bouts of volatility, thanks to headwinds like war on Ukraine, sky-high inflation and a spike in coronavirus cases, especially in China. These challenges kept investors on edge and are unlikely to die down anytime soon. As a result, markets will possibly remain choppy, at least in the near term.
However, this prevalent uncertainty should not compel investors to shun equities. They should, as always, look to design a basket of stocks that will fetch them handsome returns, irrespective of the surrounding conditions. However, the task is not an easy one, particularly for individual investors, as a plethora of stocks floods the market at any point of time. Evidently, the advice of “experts” in this field is much sought after by investors.
Who Are the Experts and Why?
The experts in the world of investing are brokers. Brokers scrutinize the publicly available financial documents, and also attend company conference calls and other presentations. Since brokers recommend (buy, sell or hold) a stock after thoroughly analyzing the nitty-gritties associated with the company, it is then perfect for investors to be guided by their direction of estimate revisions while deciding their course of action on a particular stock. The estimate revisions serve as an important pointer regarding the price of a stock. In fact, a rating upgrade generally leads to stock price appreciation. Similarly, the price of a stock may plummet following a rating downgrade.
Estimates can move north for a number of reasons, including a favorable earnings performance, a bullish guidance, product launch or an optimistic macro scenario.
Winning Strategy
The above write-up clearly suggests that one can arrive at a winning portfolio of stocks by following broker actions. Keeping this in mind, we designed a screen to shortlist stocks based on improving analyst recommendations and upward revisions in earnings estimates over the last four weeks.
Also, since the price/sales ratio is a strong complementary valuation metric in the presence of analyst information, it is also being considered. The price/sales ratio takes care of the company’s top line, making the strategy foolproof.
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).
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 qualified the screening:
United Airlines (UAL - Free Report) , currently carrying a Zacks Rank #3 (Hold), is based in Chicago. UAL transports people and cargo not only throughout North America but also destinations in Asia, Europe, the Middle East and Latin America. Upbeat air-travel demand bodes well for UAL. United Airlines’ environmentally-friendly attitude is an added positive. However, high fuel costs are limiting bottom-line growth.
Buoyed by upbeat air-travel demand in the United States, shares of United Airlines gained 10.3% in the past six months. UAL’s earnings outshined the Zacks Consensus Estimate in three of the last four quarters (missing the consensus mark in the remaining one). The average beat is 17.9%.
C.H. Robinson Worldwide (CHRW - Free Report) , currently carrying a Zacks Rank of 3, operates as an asset-light logistics company. This Minnesota-based freight broker is being aided by the improving freight scenario in the United States. Efforts to control costs also bode well. Measures to reward its shareholders instill further confidence in the stock.
C.H. Robinson has an impressive track record with respect to earnings, which surpassed the Zacks Consensus Estimate in three of the trailing four quarters (missing the consensus mark in the remaining one), the average surprise being 16.8%. CHRW shares have gained 4% in the past six months.
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 the emergency room, the operating room, labor, pediatrics, and delivery and medical-surgical services.
The Zacks Consensus Estimate for Cross Country Healthcare’s 2022 earnings has been revised 124.8% upward in the past 60 days. Shares of CCRN have increased 52.4% in a year’s time. CCRN currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PBF Energy (PBF - Free Report) has one of the most complex refining systems in the United States. As a result, the firm has the capacity to generate lighter and better grades of refined products. PBF is based in New Jersey.
PBF currently sports a Zacks Rank #1. The Zacks Consensus Estimate for the stock’s 2022 earnings has been revised 156.2% upward in the past 60 days. Shares of PBF Energy have increased 100.5% in a year’s time.
Cleveland-Cliffs (CLF - Free Report) is the largest producer of iron ore pellets in North America. CLF should gain from its merger with AK Steel and the buyout of ArcelorMittal USA. Higher steel prices should also drive its margins. Besides, CLF is likely to gain from the bright prospects of the HBI project.
Cleveland-Cliffs currently sports a Zacks Rank of 1. The Zacks Consensus Estimate for CLF’s current-year earnings has been revised 9% upward in the past 60 days. The stock has surged 52.9% in a year’s time.
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.