For Immediate Release
Chicago, IL – September 30, 2016 - Stocks in this week’s article include: Energy Recovery, Inc. (NASDAQ: (ERII - Snapshot Report) -Free Report ), Simpson Manufacturing Co., Inc. (NYSE: (SSD - Snapshot Report) -Free Report ), OraSure Technologies, Inc. (NASDAQ: (OSUR - Snapshot Report) -Free Report ), Provident Financial Services, Inc. (NYSE: (PFS - Snapshot Report) -Free Report ) and National Bank Holdings Corp. (NYSE: (NBHC - Snapshot Report) -Free Report ).
Screen of the Week of Zacks Investment Research:
5 Stocks Set to Rise on New Analyst Coverage
Coverage initiation on a stock by analyst(s) usually depicts increased investor inclination. Investors, on their part, often assume that there is something in the stock that has attracted analyst attention. In other words, they believe that the company coming under the microscope definitely has some value.
Lack of information creates inefficiencies that might result in stocks being misrepresented (over- or under-valued). Thus, initiation of coverage by analysts offers critical information on a stock which is of great value to investors.
Obviously, stocks are not arbitrarily chosen to cover. New coverage on a stock usually reflects an encouraging future envisioned by the analyst(s). At times, increased investor focus on a stock motivates analysts to take a closer look at it.
However, the average change in broker recommendation is preferred over a single recommendation change.
Analyst Coverage & Price Movement
Interestingly, the price movement is generally a function of the recommendations from the new analysts. Stocks typically see an upward price movement with a new analyst coverage compared to what they witness 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 over the last few weeks.
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).
The number of increased analyst coverage and improving average rating are the primary criteria of this strategy, but one should consider other relevant parameters to make the strategy 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 of the investors).
Average Daily Volume greater than or equal to 100,000 shares (if volume isn’t enough, it will not attract individual investors).
Here are 5 of the 15 stocks that passed the screen:
Energy Recovery, Inc. (NASDAQ: (ERII - Snapshot Report) -Free Report ) is a San Leandro, CA-based leading firm from the pollution control industry. The company manufactures devices that transform untapped energy into reusable energy from industrial fluid flows and pressure cycles. The company’s shares have jumped more than 134.8% year to date. This Zacks Rank #1 (Strong Buy) stock also has an impressive return profile with estimated 3-5 year earnings growth rate of 15%.
Simpson Manufacturing Co., Inc. (NYSE: (SSD - Snapshot Report) -Free Report ) , headquartered in Pleasanton, CA, is a leading manufacturer of wood construction products that operates through its subsidiary, Simpson Strong-Tie Company Inc. Simpson Manufacturing carries a Zacks Rank #3 (Hold) and has seen shares rise 36.7% since the beginning of the year. The company’s estimated 3–5 year earnings growth rate stands at 10%.
Bethlehem, PA-based OraSure Technologies, Inc. (NASDAQ: (OSUR - Snapshot Report) -Free Report ) is a leader in point of care diagnostic tests and specimen collection devices. It develops and manufactures diagnostic products, oral fluid specimen collection devices, laboratory diagnostic products and other medical devices. This Zacks Rank #3 stock’s estimated 3–5-year earnings growth rate of 15% shows promise. The stock has advanced approximately 28.3% so far this year.
Provident Financial Services, Inc. (NYSE: (PFS - Snapshot Report) -Free Report ) - the holding company of The Provident Bank - is a community- and customer-oriented banking company. The company boasts a dividend yield of 3.43% with a P/E (F1) of 15.36, lower than the industry average of 18.9. It has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here .
CO-based National Bank Holdings Corp. (NYSE: (NBHC - Snapshot Report) -Free Report ) , a bank holding company, provides various banking products and financial services to commercial and consumer clients in the U.S. This Zacks Rank #2 (Buy) company has posted positive earnings surprises in three of the last four quarters, with an average beat of 392.9%.
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 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
Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »
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. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here https://at.zacks.com/?id=112
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Get the full Report on ERII - FREE
Get the full Report on SSD - FREE
Get the full Report on OSUR - FREE
Get the full Report on PFS - FREE
Get the full Report on NBHC - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
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
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.