A basic fundamental analysis is not enough to select stocks that have the potential to generate solid returns. An effective and effortless way to zero in on the right stocks is to follow broker rating upgrades.
Brokers have a deeper insight into companies, sectors and the overall economy. Also, they directly communicate with the top management. Further, brokers painstakingly go through the company’s publicly available documents and attend conference calls.
Moreover, they scrutinize the fundamentals of a company and place them against the current economic backdrop to determine how the stock will fare as an investment option. Hence, by following broker rating upgrades, you can easily find attractive stocks.
Nevertheless, solely depending on broker upgrades is not the correct way to build your investment portfolio. You should also take into account certain other factors to ensure steady returns.
The following screen will help you in finding the potential winners:
The Winning Strategy
Broker Rating Upgrades (4 weeks): The screen selects stocks that have witnessed broker rating upgrades over the last four weeks.
Current Price greater than 10: The stocks must be trading above $10.
Average 20-day Volume greater than 100,000: A large trading volume guarantees that the stock is easily tradable.
Zacks Rank equal to #1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven record of success. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
VGM Score equal to A: Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best upside potential.
Here are five of the 10 stocks that made it through the screen:
Headquartered in Rosemont, IL, US Foods Holding Corp. (USFD - Snapshot Report) markets and distributes fresh, frozen, and dry food and non-food products to foodservice customers in the U.S. Over the trailing four quarters, the company delivered an average positive surprise of 5%. The stock has witnessed 7.4% upward revision in broker ratings over the past four weeks.
WellCare Health Plans, Inc. (WCG - Snapshot Report) , headquartered in Tampa, FL, provides managed care services for government-sponsored health care programs. The company boasts a strong surprise history, with a trailing four-quarter average beat of 29.6%. The stock has witnessed 6.1% upward revision in broker ratings over the past four weeks.
Berry Plastics Group, Inc. (BERY - Snapshot Report) , based in Evansville, IN, manufactures and distributes plastic consumer packaging and engineered materials in the U.S., Canada, Mexico, Belgium, France, Australia, Germany, Brazil, Malaysia, India, China, and the Netherlands. The company boasts a strong surprise history, with a trailing four-quarter average beat of 14%. The stock has witnessed 4.3% upward revision in broker ratings over the past four weeks.
St. Petersburg, FL-based Jabil Circuit Inc. (JBL - Analyst Report) provides electronic manufacturing services and solutions worldwide. The company boasts a strong surprise history, with a trailing four-quarter average beat of 41.6%. The stock has witnessed 6.7% upward revision in broker ratings over the past four weeks.
The Goodyear Tire & Rubber Company (GT - Analyst Report) , based in Akron, OH, develops, manufactures, markets, and distributes tires, and related products and services. The company boasts a strong surprise history, with a trailing four-quarter average beat of 10.3%. The stock has witnessed 23.6% 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.
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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.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance
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