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How to Pick Stocks

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Welcome to Episode #64 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Zacks Director of Research, Sheraz Mian. He is also the mastermind behind Zacks Top 10 Stocks to Buy in 2017.

This is a buy and hold portfolio of 10 stocks that are purchased in the first week of the new year and held until the end of the year.

Sheraz has picked this portfolio for several years so every December he has to narrow down the Zacks universe of covered stocks, which is about 4400 different stocks, into the 10 he feels will perform the best in the following year.

It’s not easy.

How Sheraz Picks Stocks for the Portfolio

He starts with developing his macro view of the economy and what he thinks might happen in the United States and the global economy in a host of areas including with the Federal Reserve, with healthcare policy, with possible trade disputes under the Trump Administration, as well as with the French and German elections still to come later in the year.

Once you have developed your strategy for the year, then, he says, the stock picks become clearer.

Sheraz picks from Zacks Rank #1 (Strong Buy), #2 (Buy) and #3 (Hold) stocks. He also uses the Zacks Industry and Sector ranks to narrow things further.

Zacks.com has a bunch of information you can use to find good quality names, including the analyst estimate data.

The portfolio for 2017 just launched this week. You can see the top 10 stocks for only $1 if you click here

They wouldn’t say what is in this year’s portfolio, but Tracey and Sheraz were able to analyze what went right and what went wrong in the 2016 portfolio. Sheraz discusses how he picked last year’s portfolio and which of the stocks he still likes in 2017.

The Good and Bad of 2016

  1. Sheraz took a risk on energy but it paid off big as Pioneer Natural Resources (PXD - Free Report) was his biggest winner last year with a 45.8% gain.
  2. He didn’t shy away from the banks in 2016. First Republic which specializes in high net worth individuals in San Francisco rose 44%.
  3. Dave & Buster’s (PLAY - Free Report) was the smallest company in last year’s portfolio with a $1.7 billion market cap. Listen to the podcast to find out why he picked it last year and what he thinks going forward.
  4. EPAM Systems (EPAM - Free Report) never got momentum. This global IT company fell 13.8%.
  5. Manhattan Associates (MANH - Free Report) was the worst performer in 2016, losing 17.6%. They make software that helps online retailers and sellers. Does Sheraz still like them for 2017?

Some of the trends of 2016 will continue into 2017. Which ones?

What does Sheraz think of the banking stocks in 2017 after the big run in 2016? Yes, there is a bank in the 2017 portfolio.

Also, he’s a former oil analyst, so he’s not hiding from the energy stocks in 2017. But you might be surprised at his pick this year.

What other tips does Sheraz have about how to pick stocks?

Tune into this week’s podcast to find out.

Get the Top 10 Stocks of 2017

The new portfolio just launched this week. You can see the top 10 stocks, and the report with Sheraz’s analysis of each company, for just $1.

Start the New Year off with these buy-and-hold stock ideas.

Click here >>