As the year 2022 ended on a grim note, it’s time for investors to re-assess their portfolio and investment strategy for 2023. While the recent economic data point to some effectiveness of the Federal Reserve’s ultra-aggressive monetary tightening, we are still not out of the woods. The central bank is expected to keep interest rates high till inflation comes down reasonably.
This has made investors cautious, as higher rates will likely lead to a recession/economic slowdown this year. The bearish sentiments are leading to huge market volatility, making it difficult for individual investors to pick stocks independently and generate solid returns. One way to choose the right stocks in the current situation is to follow rating upgrades by brokers. In this regard, stocks like Philip Morris International Inc. ( PM Quick Quote PM - Free Report) , The Kroger Co. ( KR Quick Quote KR - Free Report) , Expedia Group, Inc. ( EXPE Quick Quote EXPE - Free Report) , Lyft, Inc. ( LYFT Quick Quote LYFT - Free Report) and Agilent Technologies, Inc. ( A Quick Quote A - Free Report) are worth a look. As brokers directly communicate with the top management, they have a deeper understanding of what is happening in a particular company. They meticulously assess companies’ publicly available documents and even attend conference calls. Brokers have an extra understanding of the overall sector and industry. They place company fundamentals against the current economic backdrop to determine how a particular stock will fare as an investment. Hence, when brokers upgrade a stock, you can rely on their judgment. But solely depending on broker upgrades is not a good way to build your investment portfolio. Several other factors should be taken into consideration to ensure steady returns. Selecting the Winning Strategy
We have a screening strategy that will help you in your search for potential winners:
Broker Rating Upgrades (Four Weeks) of 1% or More: The screen selects stocks that have witnessed broker rating upgrades of 1% or more over the last four weeks. Current Price Greater Than $5: The stocks must trade above $5. Average 20-Day Volume Greater Than 100,000: A large trading volume guarantees that the stock is easily tradable. Zacks Rank Equal to #1 or 2: Despite good or bad market conditions, stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) have a proven record of success. You can see . the complete list of today’s Zacks #1 Rank stocks here Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential. of A or B: VGM Score Here are five of the 31 stocks that qualified for the screening: New York-based Philip Morris manufactures and sells cigarettes, other tobacco products and other nicotine-containing products outside the United States. PM is also engaged in the development and commercialization of reduced-risk products, which generally are less harmful than cigarette smoking. Philip Morris’ 2023 earnings are projected to grow 1.9%. The company, carrying a Zacks Rank #2 at present, has witnessed an 18.2% upward revision in broker ratings over the past four weeks. Cincinnati, OH-based Kroger operates supermarkets under banners including Kroger, City Market, Dillons, Food 4 Less, Fred Meyer, Fry's, Harris Teeter, Jay C, King Soopers, Mariano's, Pick 'n Save, QFC, Ralphs and Smith's. Further, KR manufactures and processes certain food products sold in its supermarkets. The company’s earnings for fiscal 2024 are expected to increase 1.9%. Kroger, currently sporting a Zacks Rank #1, has witnessed a 6.3% upward revision in broker ratings over the past four weeks. Headquartered in Seattle, WA, Expedia is one of the largest online travel companies in the world. EXPE’s web portals focus on travel planning, travel purchases and travel experience sharing, thus bringing suppliers and consumers of travel-related services together. Expedia’s 2023 earnings are projected to rise 23.8%. The company, sporting a Zacks Rank #1 at present, has witnessed a 5% upward revision in broker ratings over the past four weeks. Lyft, based in San Francisco, CA, operates multimodal transportation networks in the United States and Canada. LYFT is a peer-to-peer marketplace for on-demand ridesharing. Lyft’s 2023 earnings are projected to surge 120.3%. The company, carrying a Zacks Rank #2 at present, has witnessed a 3.4% upward revision in broker ratings over the past four weeks. Palo Alto, CA-based Agilent was originally a spin-off from Hewlett-Packard. The company is an original equipment manufacturer of a broad-based portfolio of test and measurement products serving multiple end markets. A’s earnings for fiscal 2023 are expected to increase 8.1%. Agilent, currently carrying a Zacks Rank #2, has witnessed an 8.3% upward revision in broker ratings over the past four weeks. Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software. 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