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New analyst coverage unearths extensive data on stocks for investors. As analysts are privy to vital information, which is crucial for investment decisions, they are much relied on as lack of information creates chances of misinterpretation (over- or under-valued).
MicroStrategy Incorporated (MSTR - Free Report) , MBIA Inc. (MBI - Free Report) , Gen Digital Inc. (GEN - Free Report) , Luna Innovations Incorporated (LUNA - Free Report) and Otter Tail Corporation (OTTR - Free Report) are five stocks that have witnessed new analyst coverage lately. These are, therefore, expected to attract investor attention.
Analysts don’t add a stock to their coverage randomly. New coverage on a stock is usually the result of huge investor focus on it or its prospects.
Interestingly, stocks typically see an incremental upward price movement with new analyst coverage compared to what they witness with the continuation of existing analyst coverage. Of course, the price movement depends on the recommendations from the new analysts. Positive recommendations — Buy and Strong Buy — lead to a significant positive incremental price reaction than Strong Sell, Sell or Hold recommendations.
Moreover, if an analyst gives a new recommendation on a company that has limited or no analyst coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.
However, one should preferably look for the average change in broker recommendation rather than a single recommendation change. Then again, an upgrade, an initiation or even increased coverage is equally important.
Keeping this mind, it’s a good strategy to focus on the number of analyst recommendations that have increased over the last few weeks.
Below, we have selected five stocks that have seen increased analyst coverage over the last few weeks.
Screening Criteria
Number of Broker Ratings now greater than the Number of Broker Ratings four weeks ago (this will shortlist stocks that have recent new coverage).
Average Broker Rating less than Average Broker Rating four weeks ago (“less than” means “better than” four weeks ago).
Increased analyst coverage and improving average rating are the primary criteria of this strategy but one should also consider other relevant parameters to make it foolproof.
Here are the other screening parameters:
Price greater than or equal to $5 (as a stock below $5 will not likely create significant interest for most investors).
Average Daily Volume greater than or equal to 100,000 shares (if the volume isn’t enough, it will not attract individual investors).
Here are five out of nine stocks that passed the screen:
MicroStrategy: Headquartered in Tysons Corner, VA, this company provides enterprise analytics software and services in the United States, Canada and in international markets.
MSTR has gained 30% over the past year, outperforming the industry’s 21.4% rise. Earnings estimates for 2023 have increased to $31.09 per share from $2.10 over the past 30 days. This depicts analysts’ optimism over the company. Earnings for 2023 are expected to grow 125% from 2022. MSTR currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MBIA: Based in Purchase, NY, this company provides financial guarantee insurance services to public finance markets.
MBI currently carries a Zacks Rank #2. The stock has lost 44% over the past year, outperforming the industry’s 15.1% decline. Loss estimates for 2023 have narrowed to 80 cents per share from $1.90 over the past 30 days.
Gen Digital: This company provides cyber safety solutions to consumers in the United States, Canada and internationally.
GEN currently carries a Zacks Rank #2. The stock has lost 32.4% over the past year, underperforming the industry’s 12.7% decline. That said, loss estimates for 2023 have increased to $1.98 per share from $1.94 over the past 30 days. Earnings for 2023 are expected to grow 9.4% from 2022.
Luna Innovations: This Roanoke, VA-based company provides fiber optic test, measurement, and control products worldwide.
LUNA currently carries a Zacks Rank #2. The stock has gained 44.9% over the past year, outperforming the industry’s 12.8% decline. Earnings for 2023 are expected to grow 42.9% from 2022.
Otter Tail Corporation: Based in Fergus Falls, MN, this company’s primary business is the production, transmission, distribution and sale of electric energy.
OTTR currently carries a Zacks Rank #3 (Hold). The stock has gained 16.1% over the past year, outperforming the industry’s 17.2% decline. Earnings estimates for 2023 have increased to $4.71 per share from $3.85 over the past 30 days.
This company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 38.4%. It carries an impressive VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
You can sign 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 test 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.
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Analysts Initiate Coverage: 5 Stocks in Focus
New analyst coverage unearths extensive data on stocks for investors. As analysts are privy to vital information, which is crucial for investment decisions, they are much relied on as lack of information creates chances of misinterpretation (over- or under-valued).
MicroStrategy Incorporated (MSTR - Free Report) , MBIA Inc. (MBI - Free Report) , Gen Digital Inc. (GEN - Free Report) , Luna Innovations Incorporated (LUNA - Free Report) and Otter Tail Corporation (OTTR - Free Report) are five stocks that have witnessed new analyst coverage lately. These are, therefore, expected to attract investor attention.
Analysts don’t add a stock to their coverage randomly. New coverage on a stock is usually the result of huge investor focus on it or its prospects.
Interestingly, stocks typically see an incremental upward price movement with new analyst coverage compared to what they witness with the continuation of existing analyst coverage. Of course, the price movement depends on the recommendations from the new analysts. Positive recommendations — Buy and Strong Buy — lead to a significant positive incremental price reaction than Strong Sell, Sell or Hold recommendations.
Moreover, if an analyst gives a new recommendation on a company that has limited or no analyst coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.
However, one should preferably look for the average change in broker recommendation rather than a single recommendation change. Then again, an upgrade, an initiation or even increased coverage is equally important.
Keeping this mind, it’s a good strategy to focus on the number of analyst recommendations that have increased over the last few weeks.
Below, we have selected five stocks that have seen increased analyst coverage over the last few weeks.
Screening Criteria
Number of Broker Ratings now greater than the Number of Broker Ratings four weeks ago (this will shortlist stocks that have recent new coverage).
Average Broker Rating less than Average Broker Rating four weeks ago (“less than” means “better than” four weeks ago).
Increased analyst coverage and improving average rating are the primary criteria of this strategy but one should also consider other relevant parameters to make it foolproof.
Here are the other screening parameters:
Price greater than or equal to $5 (as a stock below $5 will not likely create significant interest for most investors).
Average Daily Volume greater than or equal to 100,000 shares (if the volume isn’t enough, it will not attract individual investors).
Here are five out of nine stocks that passed the screen:
MicroStrategy: Headquartered in Tysons Corner, VA, this company provides enterprise analytics software and services in the United States, Canada and in international markets.
MSTR has gained 30% over the past year, outperforming the industry’s 21.4% rise. Earnings estimates for 2023 have increased to $31.09 per share from $2.10 over the past 30 days. This depicts analysts’ optimism over the company. Earnings for 2023 are expected to grow 125% from 2022. MSTR currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MBIA: Based in Purchase, NY, this company provides financial guarantee insurance services to public finance markets.
MBI currently carries a Zacks Rank #2. The stock has lost 44% over the past year, outperforming the industry’s 15.1% decline. Loss estimates for 2023 have narrowed to 80 cents per share from $1.90 over the past 30 days.
Gen Digital: This company provides cyber safety solutions to consumers in the United States, Canada and internationally.
GEN currently carries a Zacks Rank #2. The stock has lost 32.4% over the past year, underperforming the industry’s 12.7% decline. That said, loss estimates for 2023 have increased to $1.98 per share from $1.94 over the past 30 days. Earnings for 2023 are expected to grow 9.4% from 2022.
Luna Innovations: This Roanoke, VA-based company provides fiber optic test, measurement, and control products worldwide.
LUNA currently carries a Zacks Rank #2. The stock has gained 44.9% over the past year, outperforming the industry’s 12.8% decline. Earnings for 2023 are expected to grow 42.9% from 2022.
Otter Tail Corporation: Based in Fergus Falls, MN, this company’s primary business is the production, transmission, distribution and sale of electric energy.
OTTR currently carries a Zacks Rank #3 (Hold). The stock has gained 16.1% over the past year, outperforming the industry’s 17.2% decline. Earnings estimates for 2023 have increased to $4.71 per share from $3.85 over the past 30 days.
This company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 38.4%. It carries an impressive VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
You can sign 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 test 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