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5 Stocks That Look Promising Following Broker Rating Upgrades
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At its meeting, the Federal Reserve trimmed interest rates for the second time this year. This time, it cut key interest rates by 25 bps following the 50-bps cut in September 2024. This reflects the Fed's renewed focus on supporting the job market and fighting inflation. Moreover, Donald Trump's victory in the presidential election over Kamala Harris has had a substantial positive impact on the stock market. Trump’s re-election is expected to lead to a more pro-business stance, as was evident in his first term.
Investors would like to take advantage of these tailwinds and design a winning portfolio for healthy returns. Given the difficulty of this task as stocks from different industries are present in the market, investors are well-advised to take help from brokers, deemed to be experts in the field of investing. Broker-favorite stocks such as American Airlines (AAL - Free Report) , Air Canada (ACDVF - Free Report) , DXC Technology (DXC - Free Report) , Dollar General (DG - Free Report) , and McKesson Corporation (MCK - Free Report) should be monitored for this purpose.
We have designed a screen to shortlist stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of broker information, it has been included. The price/sales ratio takes care of the company’s top line, making the strategy a well-rounded one.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks).
% change in Q (1) est. (4 weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter).
Price-to-Sales = Bot%10 (The lower the ratio, the better. Companies meeting this criterion are in the bottom 10% of our universe of over 7,700 stocks with respect to this ratio).
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com (This takes out the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
American Airlines is based in Fort Worth, TX. The gradual increase in air travel demand (particularly leisure) aids AAL. However, high operating costs are hurting the bottom line.
Air Canada, Canada’s leading airline, is benefiting from the buoyant scenario with respect to air travel demand. Driven by this tailwind, shares of this carrier have gained 49% in the past three months.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has gained 39.7%. ACDVF currently carries a Zacks Rank #3.
DXC Technology is benefiting from strength in the digital business and partnerships, which is helping it expand in the cloud computing space. DXC Technology is implementing robust cost-saving measures to enhance its financial performance.
Over the past 60 days, the Zacks Consensus Estimate for DXC’s next-year earnings has increased by 1.3%. DXC’s earnings surpassed estimates in each of the last four quarters. The average beat is 22.2%. The company currently carries a Zacks Rank #3.
Dollar General remains a compelling growth story in the retail space, despite immediate margin pressure and a tough consumer environment. Thanks to its value-creating initiatives, defensive product mix and real estate growth strategy, the company has the capabilities to gain market share.
DG’s commitment to better pricing, private label offerings, effective inventory management and merchandise initiative should drive sales. DG’s earnings surpassed estimates in three of the last four quarters (missing the mark in one). The average beat is 2.8%. The company currently carries a Zacks Rank #2 (Buy).
McKesson‘s growth is driven by the U.S. Pharmaceutical segment, which is seeing increased prescription volumes, including higher volumes from specialty products and retail national account customers.
McKesson is based in San Francisco, CA. MCK’s earnings surpassed estimates in three of the last four quarters (missing the mark in one). The average beat is 5%. The company currently carries a Zacks Rank #2.
You can get the rest of the stocks on this list by signing up now for a 2-week free trial to the Research Wizard stock picking and backtesting software. You can also create your own strategies and test them first before making investments.
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.
Image: Bigstock
5 Stocks That Look Promising Following Broker Rating Upgrades
At its meeting, the Federal Reserve trimmed interest rates for the second time this year. This time, it cut key interest rates by 25 bps following the 50-bps cut in September 2024. This reflects the Fed's renewed focus on supporting the job market and fighting inflation. Moreover, Donald Trump's victory in the presidential election over Kamala Harris has had a substantial positive impact on the stock market. Trump’s re-election is expected to lead to a more pro-business stance, as was evident in his first term.
Investors would like to take advantage of these tailwinds and design a winning portfolio for healthy returns. Given the difficulty of this task as stocks from different industries are present in the market, investors are well-advised to take help from brokers, deemed to be experts in the field of investing. Broker-favorite stocks such as American Airlines (AAL - Free Report) , Air Canada (ACDVF - Free Report) , DXC Technology (DXC - Free Report) , Dollar General (DG - Free Report) , and McKesson Corporation (MCK - Free Report) should be monitored for this purpose.
We have designed a screen to shortlist stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of broker information, it has been included. The price/sales ratio takes care of the company’s top line, making the strategy a well-rounded one.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks).
% change in Q (1) est. (4 weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter).
Price-to-Sales = Bot%10 (The lower the ratio, the better. Companies meeting this criterion are in the bottom 10% of our universe of over 7,700 stocks with respect to this ratio).
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com (This takes out the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
American Airlines is based in Fort Worth, TX. The gradual increase in air travel demand (particularly leisure) aids AAL. However, high operating costs are hurting the bottom line.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has increased 36.8%. AAL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Air Canada, Canada’s leading airline, is benefiting from the buoyant scenario with respect to air travel demand. Driven by this tailwind, shares of this carrier have gained 49% in the past three months.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has gained 39.7%. ACDVF currently carries a Zacks Rank #3.
DXC Technology is benefiting from strength in the digital business and partnerships, which is helping it expand in the cloud computing space. DXC Technology is implementing robust cost-saving measures to enhance its financial performance.
Over the past 60 days, the Zacks Consensus Estimate for DXC’s next-year earnings has increased by 1.3%. DXC’s earnings surpassed estimates in each of the last four quarters. The average beat is 22.2%. The company currently carries a Zacks Rank #3.
Dollar General remains a compelling growth story in the retail space, despite immediate margin pressure and a tough consumer environment. Thanks to its value-creating initiatives, defensive product mix and real estate growth strategy, the company has the capabilities to gain market share.
DG’s commitment to better pricing, private label offerings, effective inventory management and merchandise initiative should drive sales. DG’s earnings surpassed estimates in three of the last four quarters (missing the mark in one). The average beat is 2.8%. The company currently carries a Zacks Rank #2 (Buy).
McKesson‘s growth is driven by the U.S. Pharmaceutical segment, which is seeing increased prescription volumes, including higher volumes from specialty products and retail national account customers.
McKesson is based in San Francisco, CA. MCK’s earnings surpassed estimates in three of the last four quarters (missing the mark in one). The average beat is 5%. The company currently carries a Zacks Rank #2.
You can get the rest of the stocks on this list by signing up now for a 2-week free trial to the Research Wizard stock picking and backtesting software. You can also create your own strategies and test them first before making investments.
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