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For Immediate Release

Chicago, IL – February 7, 2023 – Stocks in this week’s article are Applied Industrial Technologies, Inc. (AIT - Free Report) , Kyndryl Holdings, Inc. (KD - Free Report) and NewtekOne, Inc. (NEWT - Free Report) .

New Analyst Coverage Puts Spotlight on These 3 Stocks

Investors depend on research work provided by analysts as they fear that a lack of information while exploring on their own might trigger errors. Here, analysts play a vital intermediary role as they have extensive access to relevant data.

Applied Industrial Technologies, Inc., Kyndryl Holdings, Inc. and NewtekOne, Inc. are some stocks that have seen new analyst coverage lately and are therefore expected to attract investors' attention.

Coverage initiation of a stock by analyst(s) usually portrays higher investor inclination. Investors, on their part, often assume that there is something special in a stock to attract analysts to cover it. In other words, they believe that the company coming under the microscope definitely has some value.

Obviously, stocks are not randomly chosen to cover. New coverage on a stock usually reflects a reassuring future envisioned by the analyst(s). At times, increased investors’ focus on a stock motivates analysts to take a closer look at it. After all, who doesn’t love to produce something that is already in demand? Hence, we often find that analysts’ ratings on newly added stocks are more favorable than their ratings on continuously covered stocks.

It is needless to say, the average change in broker recommendation is more preferable than a single recommendation change.

How Does Analyst Coverage Influence Stock Price?

The price movement of a stock is generally a function of the recommendations on it from new analysts. Stocks typically see an upward price movement with a new analyst coverage compared to what is witnessed with a rating upgrade under an existing coverage. Positive recommendations — Buy and Strong Buy — generally lead to a significantly positive price reaction than Hold recommendations. On the contrary, analysts hardly initiate coverage with a Strong Sell or Sell recommendation.

Now, if an analyst gives a new recommendation on a company that has very few or no existing coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.

So, it’s a good strategy to bet on stocks that have seen increased analyst coverage.

Below, we have selected three stocks that have seen increased analyst coverage over the past few weeks.

Here are three among the four stocks that passed the screen:

Applied Industrial Technologies: Based in Cleveland, OH, AIT is a distributor of value-added industrial products — including engineered fluid power components, bearings, specialty flow control solutions, power transmission products and miscellaneous industrial supplies.

AIT currently carries a Zacks Rank #1 (Strong Buy). The stock has gained 53.1% over the past year, outperforming the industry’s 6.7% rise. Earnings estimates for fiscal 2023 have increased to $8.34 per share from $8.01 per share over the past seven days. The estimated figure implies 26.8% growth from the year-ago period, thanks to investments across the U.S. manufacturing sector and strong automation demand. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kyndryl Holdings: This company operates as a technology services provider and is headquartered in New York. KD provides IT infrastructure services worldwide.

KD currently carries a Zacks Rank #2. The stock has declined 13.2% over the past year, faring better than the industry’s 27.5% decline. Earnings estimates for fiscal 2024 indicate 80.3% growth from the year-ago period.

NewtekOne: Headquartered in Boca Raton, FL, NEWT is a business development company specializing in providing financial and business services to the small-and medium-sized business market in the United States.

NEWT currently carries a Zacks Rank #3 (Hold). The stock has gained 19.4% over the past three months, faring better than the industry’s 10.2% rise. Earnings estimates for 2023 indicate 12% growth from the year-ago period.

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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.

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