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5 Broker-Favorite Stocks to Bank On as Market Unrest Continues
The US markets are hounded by volatility in the current year. The September reading on inflation was anything but encouraging. On a year-over-year basis, the headline Consumer Price Index (CPI) increased 8.2% compared with 8.3% in August. Again, year over year, the core CPI (excluding volatile food and energy items) increased 6.6% in September compared with the August reading of 6.5%.
To check the sky-high inflation, the Fed adopted a hawkish stance, having raised the benchmark lending rate 3% year to date. Fed chair Jerome Powell indicated categorically that the central bank will continue hiking interest rates as long as inflation remains elevated. Higher interest rates shoot up the cost of borrowing, escalating the chances of an economic slowdown. Underlining the sorry state of affairs, the S&P 500 Index posted the third straight quarter of losses for the first time since 2009.
Despite the current turmoil, evading equities is never advisable for investors. So what’s the way forward? One solution is to pay heed to broker advice while designing one’s portfolio in the current scenario of high-interest rates. Broker-friendly stocks like American Airlines, Delta Air Lines, CVREnergy, Covenant Logistics Group and Cross Country Healthcare are the only recourse for investors to net healthy returns amid this market bloodbath.
As brokers indulge in extensive research on stocks under their coverage, they have access to a much-detailed dope on a company. To this end, they attend company conference calls/presentations and scrutinize every piece of document available in the public domain before instructing investors.
Direction of Earnings Estimates: A Key Parameter
Since brokers follow the stocks under their coverage in great detail, they revise their earnings estimates after carefully examining the pros and cons of an event for the concerned company. The estimate revisions serve as an important yardstick regarding a stock price.
For example, a company’s earnings beat generally leads to upward estimate revisions with prices moving north. Similarly, lackluster earnings often cause stock price depreciation. Naturally, adhering to such well-researched information stands investors in good stead in their bid to glean attractive returns from their respective portfolios. Investors tend to be guided by the direction of estimate revisions and the stock price while formulating their investment strategy.
Making the Most of Broker Knowhow
The above write-up clearly suggests that by following broker actions, one can arrive at a promising basket of stocks. Keeping this in mind, we designed a screen to shortlist stocks based on improving analyst recommendations and upward earnings estimate revisions 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 considered in designing a winning portfolio of stocks. The price/sales ratio takes care of the company’s top line, making the strategy extremely effective.
Here are five of the 10 stocks that passed the screen test:
American Airlines is based in Fort Worth, TX. The gradual increase in air-travel demand (particularly for leisure) is aiding AAL. However, high fuel costs are hurting the bottom line.
Over the past 60 days, the stock has seen the Zacks Consensus Estimate for 2022 earnings being revised 69.6% upward. AAL currently carries a Zacks Rank #3 (Hold).
Delta, currently carrying a Zacks Rank of 3, is based in Atlanta, GA. DAL is being bolstered by the uptick in demand for air travel (particularly for leisure). High fuel costs are, however, a bane.
Delta’s earnings outshined the Zacks Consensus Estimate in two of the last four quarters (missing the mark in the remaining two quarters). The average beat is 7.9%.
CVR Energy is an independent refiner and marketer of high-value transportation fuels. CVI is also a producer of ammonia and urea ammonia nitrate fertilizers. CVI's petroleum business includes a full-coking sour crude refinery in Coffeyville, KS. Its efforts to reward its shareholders underline its strong financial position. The robust Nitrogen Fertilizer unit is supporting growth.
CVR Energy, currently carrying a Zacks Rank #3, has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the past 60 days.
Covenant Logistics offers a portfolio of transportation and logistics services, including asset-based expedited, dedicated and irregular route truckload capacity besides asset-light warehousing, transportation management and freight brokerage capability.
The gradually improving freight market scenario is a tailwind to Covenant. CVLG’s cost-control efforts are appreciative as well. CVLG currently flaunts a Zacks Rank of 1. The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 10.1% upward over the past 60 days.
Cross Country Healthcare is a national leader in providing innovative healthcare workforce solutions and staffing services. CCRN’s diverse client base includes both clinical and nonclinical settings, servicing acute care hospitals, physician practice groups, outpatient and ambulatory-care centers, nursing facilities, both public schools and charter schools, rehabilitation and sports medicine clinics, government facilities and homecare.
Cross Country Healthcare’s expected earnings growth rate for the current year is 64.1%. The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the past 60 days. CCRN currently sports a Zacks Rank #1 (Strong Buy).
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks.com featured highlights American Airlines, Delta Air Lines, CVR Energy, Covenant Logistics Group and Cross Country Healthcare
For Immediate Release
Chicago, IL – November 9, 2022 – Stocks in this week’s article are American Airlines (AAL - Free Report) , Delta Air Lines (DAL - Free Report) , CVR Energy (CVI - Free Report) , Covenant Logistics Group (CVLG - Free Report) and Cross Country Healthcare (CCRN - Free Report) .
5 Broker-Favorite Stocks to Bank On as Market Unrest Continues
The US markets are hounded by volatility in the current year. The September reading on inflation was anything but encouraging. On a year-over-year basis, the headline Consumer Price Index (CPI) increased 8.2% compared with 8.3% in August. Again, year over year, the core CPI (excluding volatile food and energy items) increased 6.6% in September compared with the August reading of 6.5%.
To check the sky-high inflation, the Fed adopted a hawkish stance, having raised the benchmark lending rate 3% year to date. Fed chair Jerome Powell indicated categorically that the central bank will continue hiking interest rates as long as inflation remains elevated. Higher interest rates shoot up the cost of borrowing, escalating the chances of an economic slowdown. Underlining the sorry state of affairs, the S&P 500 Index posted the third straight quarter of losses for the first time since 2009.
Despite the current turmoil, evading equities is never advisable for investors. So what’s the way forward? One solution is to pay heed to broker advice while designing one’s portfolio in the current scenario of high-interest rates. Broker-friendly stocks like American Airlines, Delta Air Lines, CVR Energy, Covenant Logistics Group and Cross Country Healthcare are the only recourse for investors to net healthy returns amid this market bloodbath.
As brokers indulge in extensive research on stocks under their coverage, they have access to a much-detailed dope on a company. To this end, they attend company conference calls/presentations and scrutinize every piece of document available in the public domain before instructing investors.
Direction of Earnings Estimates: A Key Parameter
Since brokers follow the stocks under their coverage in great detail, they revise their earnings estimates after carefully examining the pros and cons of an event for the concerned company. The estimate revisions serve as an important yardstick regarding a stock price.
For example, a company’s earnings beat generally leads to upward estimate revisions with prices moving north. Similarly, lackluster earnings often cause stock price depreciation. Naturally, adhering to such well-researched information stands investors in good stead in their bid to glean attractive returns from their respective portfolios. Investors tend to be guided by the direction of estimate revisions and the stock price while formulating their investment strategy.
Making the Most of Broker Knowhow
The above write-up clearly suggests that by following broker actions, one can arrive at a promising basket of stocks. Keeping this in mind, we designed a screen to shortlist stocks based on improving analyst recommendations and upward earnings estimate revisions 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 considered in designing a winning portfolio of stocks. The price/sales ratio takes care of the company’s top line, making the strategy extremely effective.
Here are five of the 10 stocks that passed the screen test:
American Airlines is based in Fort Worth, TX. The gradual increase in air-travel demand (particularly for leisure) is aiding AAL. However, high fuel costs are hurting the bottom line.
Over the past 60 days, the stock has seen the Zacks Consensus Estimate for 2022 earnings being revised 69.6% upward. AAL currently carries a Zacks Rank #3 (Hold).
Delta, currently carrying a Zacks Rank of 3, is based in Atlanta, GA. DAL is being bolstered by the uptick in demand for air travel (particularly for leisure). High fuel costs are, however, a bane.
Delta’s earnings outshined the Zacks Consensus Estimate in two of the last four quarters (missing the mark in the remaining two quarters). The average beat is 7.9%.
CVR Energy is an independent refiner and marketer of high-value transportation fuels. CVI is also a producer of ammonia and urea ammonia nitrate fertilizers. CVI's petroleum business includes a full-coking sour crude refinery in Coffeyville, KS. Its efforts to reward its shareholders underline its strong financial position. The robust Nitrogen Fertilizer unit is supporting growth.
CVR Energy, currently carrying a Zacks Rank #3, has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the past 60 days.
Covenant Logistics offers a portfolio of transportation and logistics services, including asset-based expedited, dedicated and irregular route truckload capacity besides asset-light warehousing, transportation management and freight brokerage capability.
The gradually improving freight market scenario is a tailwind to Covenant. CVLG’s cost-control efforts are appreciative as well. CVLG currently flaunts a Zacks Rank of 1. The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 10.1% upward over the past 60 days.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Cross Country Healthcare is a national leader in providing innovative healthcare workforce solutions and staffing services. CCRN’s diverse client base includes both clinical and nonclinical settings, servicing acute care hospitals, physician practice groups, outpatient and ambulatory-care centers, nursing facilities, both public schools and charter schools, rehabilitation and sports medicine clinics, government facilities and homecare.
Cross Country Healthcare’s expected earnings growth rate for the current year is 64.1%. The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the past 60 days. CCRN currently sports a Zacks Rank #1 (Strong Buy).
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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2015224/5-broker-favorite-stocks-to-bank-on-as-market-unrest-continues
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
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Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.