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Volatile Markets? Keep An Eye On These 5 Broker-Friendly Stocks
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Key Takeaways
Market volatility and tariff uncertainty drive focus on broker-recommended stocks.
AXL, BKD, ADNT, ABG and AN emerge as strong picks with growth and revenue-driving strategies.
Criteria included upgrades, estimate revisions, price-to-sales ratio, liquidity and market value.
The U.S. stock market is likely to continue experiencing volatility, driven by ongoing uncertainty over trade policies, economic challenges and shifting investor sentiment. Even though the 90-day extension to the pause in higher tariffs against China serves as a breather, the lack of clarity on the tariff front means that volatility is unlikely to go away soon.
This climate of uncertainty poses a significant challenge for investors seeking the right stocks to generate solid returns. A practical approach is to consider broker recommendations, as brokers are regarded as experts with in-depth knowledge of market intricacies. By taking this approach, broker-backed stocks such as American Axle & Manufacturing (AXL - Free Report) , Brookdale Senior Living (BKD - Free Report) , Adient (ADNT - Free Report) , Asbury Automotive (ABG - Free Report) and AutoNation (AN - Free Report) emerge as attractive options to consider for promising returns.
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 Parameters
# (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 concerning this ratio).
Current 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 eliminates the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
American Axle & Manufacturing: Its considerable strides and collaborations in the electric drive space and efforts to optimize its portfolio bode well for top- and bottom-line growth. Frequent business wins augur well for American Axle’s prospects. AXL recently won several contracts, underscoring its strength in both electric and Internal Combustion Engine markets.
AXL surpassed the Zacks Consensus Estimate for earnings in each of the past four quarters by a massive average of 584.1%. The stock carries a Zacks Rank #3 (Hold) at present.
Brookdale Senior Living: A steady increase in the weighted average occupancy rate suggests rising patient volumes, which bodes well for healthcare facility operators like Brookdale, whose primary revenue source depends on the patient base. Elevated occupancy levels are likely to drive higher resident fee revenues, which represent the most significant portion of Brookdale’s total revenues.
An uptick in resident fees is also expected to fuel growth in adjusted EBITDA. The Zacks Consensus Estimate for BKD’s 2025 earnings has been revised 7.8% upward from 2024’s actuals. BKD shares are up 37.7% over the past six months. BKD currently carries a Zacks Rank #3.
Adient: It has been gaining customers with its broad range of products. A diverse customer base and international presence have helped the company create a strong market position. Launch execution continues to be an area of focus for Adient and a key building block to win new business.
Adient currently carries a Zacks Rank #3. ADNT beat the Zacks Consensus Estimate for earnings in three of the past four quarters, the average beat being 30.3%. ADNT reported lower-than-expected earnings in one of the past four quarters.
Asbury’s diversified product mix and multiple streams of income improve its risk profile and position it for top-line growth. Its e-commerce platform— Clicklane— is driving growth. Strategic buyouts are helping the auto retailer increase its market share. Asbury’s rollout of Tekion’s Automotive Retail Cloud is emerging as a strategic tailwind.
Asbury currently carries a Zacks Rank #3. ABG beat the Zacks Consensus Estimate for earnings in two of the past four quarters, the average beat being 5.9%. The company reported lower-than-expected earnings in the other two quarters.
AutoNation is one of the largest automotive retailers in the nation, backed by a wide geographical footprint and a growing dealer network. Its ongoing store expansion strategy is helping AutoNation reach a broader customer base across key markets. Strategic acquisitions continue to fuel growth, including the recent purchase of two dealerships in the Greater Denver area.
AutoNation is also leaning into digital transformation with its AutoNation Express platform, which streamlines online vehicle buying and selling. AN surpassed the Zacks Consensus Estimate for earnings in three of the past four quarters and missed the mark once. The average beat was 7.5%. AN currently carries a Zacks Rank #3.
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.
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
Volatile Markets? Keep An Eye On These 5 Broker-Friendly Stocks
Key Takeaways
The U.S. stock market is likely to continue experiencing volatility, driven by ongoing uncertainty over trade policies, economic challenges and shifting investor sentiment. Even though the 90-day extension to the pause in higher tariffs against China serves as a breather, the lack of clarity on the tariff front means that volatility is unlikely to go away soon.
This climate of uncertainty poses a significant challenge for investors seeking the right stocks to generate solid returns. A practical approach is to consider broker recommendations, as brokers are regarded as experts with in-depth knowledge of market intricacies. By taking this approach, broker-backed stocks such as American Axle & Manufacturing (AXL - Free Report) , Brookdale Senior Living (BKD - Free Report) , Adient (ADNT - Free Report) , Asbury Automotive (ABG - Free Report) and AutoNation (AN - Free Report) emerge as attractive options to consider for promising returns.
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 Parameters
# (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 concerning this ratio).
Current 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 eliminates the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
American Axle & Manufacturing: Its considerable strides and collaborations in the electric drive space and efforts to optimize its portfolio bode well for top- and bottom-line growth. Frequent business wins augur well for American Axle’s prospects. AXL recently won several contracts, underscoring its strength in both electric and Internal Combustion Engine markets.
AXL surpassed the Zacks Consensus Estimate for earnings in each of the past four quarters by a massive average of 584.1%. The stock carries a Zacks Rank #3 (Hold) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Brookdale Senior Living: A steady increase in the weighted average occupancy rate suggests rising patient volumes, which bodes well for healthcare facility operators like Brookdale, whose primary revenue source depends on the patient base. Elevated occupancy levels are likely to drive higher resident fee revenues, which represent the most significant portion of Brookdale’s total revenues.
An uptick in resident fees is also expected to fuel growth in adjusted EBITDA. The Zacks Consensus Estimate for BKD’s 2025 earnings has been revised 7.8% upward from 2024’s actuals. BKD shares are up 37.7% over the past six months. BKD currently carries a Zacks Rank #3.
Adient: It has been gaining customers with its broad range of products. A diverse customer base and international presence have helped the company create a strong market position. Launch execution continues to be an area of focus for Adient and a key building block to win new business.
Adient currently carries a Zacks Rank #3. ADNT beat the Zacks Consensus Estimate for earnings in three of the past four quarters, the average beat being 30.3%. ADNT reported lower-than-expected earnings in one of the past four quarters.
Asbury’s diversified product mix and multiple streams of income improve its risk profile and position it for top-line growth. Its e-commerce platform— Clicklane— is driving growth. Strategic buyouts are helping the auto retailer increase its market share. Asbury’s rollout of Tekion’s Automotive Retail Cloud is emerging as a strategic tailwind.
Asbury currently carries a Zacks Rank #3. ABG beat the Zacks Consensus Estimate for earnings in two of the past four quarters, the average beat being 5.9%. The company reported lower-than-expected earnings in the other two quarters.
AutoNation is one of the largest automotive retailers in the nation, backed by a wide geographical footprint and a growing dealer network. Its ongoing store expansion strategy is helping AutoNation reach a broader customer base across key markets. Strategic acquisitions continue to fuel growth, including the recent purchase of two dealerships in the Greater Denver area.
AutoNation is also leaning into digital transformation with its AutoNation Express platform, which streamlines online vehicle buying and selling. AN surpassed the Zacks Consensus Estimate for earnings in three of the past four quarters and missed the mark once. The average beat was 7.5%. AN currently carries a Zacks Rank #3.
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.