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5 Broker-Friendly Stocks to Keep an Eye on as Inflation Concerns Ease
Read MoreHide Full Article
Key Takeaways
Brokers favor CAH, AN, AAL, ARCB and ABG amid easing inflation and a strong Q4 earnings kickoff.
These stocks show net analyst upgrades and upward earnings revisions over the past four weeks.
Screening criteria include low price/sales ratios, strong volume and top market capitalization ranks.
The Consumer Price Index (“CPI”) retail inflation report for December clearly indicated a stabilizing picture as far as inflation is concerned. The cooling of U.S. inflation pressure paints a rosy picture for investors, fueling optimism regarding interest rate cuts in 2026. Adding to the buoyant scenario, the strong start to the fourth-quarter earnings season and the continuation of the AI-related momentum have led to U.S. equities commencing 2026 on an encouraging note.
Investors can take advantage of this bright scenario by designing a winning portfolio of stocks for good returns. Nonetheless, the task is far from easy, given the plethora of companies present in the market. Apart from this, the complexities related to the stock market and the surrounding uncertainties make it even more difficult for individual investors to select outperformers in their portfolios without proper guidance.
This clearly suggests that one needs to have in-depth knowledge of the minute details of the investing space. This is quite impossible for individual investors. Consequently, the advice of “experts” in this field is much sought after by investors. The experts in the field of investing are brokers. We believe that investors monitor broker-favorite stocks like Cardinal Health (CAH - Free Report) , AutoNation (AN - Free Report) , American Airlines (AAL - Free Report) , ArcBest Corporation (ARCB - Free Report) and Asbury Automotive Group (ABG - Free Report) for healthy returns.
Brokers scrutinize the publicly available financial documents and also attend company conference calls and other presentations. Since brokers recommend (buy, sell or hold) a stock after thoroughly analyzing the nitty-gritties associated with the company, it is then perfect for investors to be guided by their direction of estimate revisions while deciding their course of action on a particular stock.
Winning Strategy
Keeping this in mind, we designed a screen to shortlist stocks based on improving analyst recommendations and upward revisions in earnings estimates over the last four weeks.
Also, since the price/sales ratio is a strong complementary valuation metric in the presence of analyst information, it is taken into consideration. The price/sales ratio takes care of the company’s top line, making the strategy foolproof.
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.
To ensure that the strategy is a winning one, covering all bases, we have added the following screening parameters:
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: A stock trading below $5 will not likely create significant interest for most investors.
Average Daily Volume greater than 100,000 shares over the last 20 trading days: Volume has to be significant to ensure that these are easily traded.
Market value ($ mil) = Top #3000: This gives us stocks that are the top 3000 if one judges by 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:
Ohio-based Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (“GMPD”) and other growth businesses.
The Zacks Consensus Estimate for CAH’s fiscal 2026 revenues suggests a year-over-year improvement of 16.2%. Cardinal Health boasts a long-term earnings growth rate of 13.9.% and currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AutoNation is one of the largest automotive retailers in the United States. The company benefits from a wide geographic presence and a steadily expanding dealer network, which helps it reach more customers across key markets. AutoNation has been actively growing through acquisitions.
Beyond physical expansion, AutoNation is strengthening its digital capabilities through its AutoNation Express platform, making online vehicle buying and selling easier for customers. Over the past 60 days, the Zacks Consensus Estimate for AN’s 2026 earnings has been revised 0.4% upward. AutoNation currently carries a Zacks Rank #2.
American Airlines is based in Fort Worth, TX. The gradual increase in air travel demand (particularly for leisure) is aiding AAL. However, high labor costs are hurting the bottom line.
The company’s high debt levels are worrisome as well. Over the past 60 days, the Zacks Consensus Estimate for AAL’s 2026 earnings has been revised 7.5% upward. American Airlines currently carries a Zacks Rank #3 (Hold).
ArcBest provides freight transportation services and solutions. The company is based in Fort Smith, AR. The company is being well-served by its efforts to control costs, improve productivity and enhance service quality.
The company expects its 2026 earnings per share to increase 42.3% on a year-over-year basis. The transportation company missed the consensus mark for earnings in two of the last four quarters and beat the mark in the remaining two. ArcBest currently carries a Zacks Rank #3.
Asbury is a well-diversified auto retailer with multiple income streams that help reduce risk and support steady top-line growth. The company benefits from a balanced mix of new and used vehicle sales, parts, services and finance offerings. Asbury is also pushing ahead with digitization through its Clicklane platform, an end-to-end e-commerce solution that allows customers to complete most of the car-buying process online, improving convenience and efficiency.
The company missed the consensus mark for earnings in one of the last four quarters and beat the mark in the other three quarters. The average beat is 8.4%. Asbury currently carries a Zacks Rank #3.
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5 Broker-Friendly Stocks to Keep an Eye on as Inflation Concerns Ease
Key Takeaways
The Consumer Price Index (“CPI”) retail inflation report for December clearly indicated a stabilizing picture as far as inflation is concerned. The cooling of U.S. inflation pressure paints a rosy picture for investors, fueling optimism regarding interest rate cuts in 2026. Adding to the buoyant scenario, the strong start to the fourth-quarter earnings season and the continuation of the AI-related momentum have led to U.S. equities commencing 2026 on an encouraging note.
Investors can take advantage of this bright scenario by designing a winning portfolio of stocks for good returns. Nonetheless, the task is far from easy, given the plethora of companies present in the market. Apart from this, the complexities related to the stock market and the surrounding uncertainties make it even more difficult for individual investors to select outperformers in their portfolios without proper guidance.
This clearly suggests that one needs to have in-depth knowledge of the minute details of the investing space. This is quite impossible for individual investors. Consequently, the advice of “experts” in this field is much sought after by investors. The experts in the field of investing are brokers. We believe that investors monitor broker-favorite stocks like Cardinal Health (CAH - Free Report) , AutoNation (AN - Free Report) , American Airlines (AAL - Free Report) , ArcBest Corporation (ARCB - Free Report) and Asbury Automotive Group (ABG - Free Report) for healthy returns.
Brokers scrutinize the publicly available financial documents and also attend company conference calls and other presentations. Since brokers recommend (buy, sell or hold) a stock after thoroughly analyzing the nitty-gritties associated with the company, it is then perfect for investors to be guided by their direction of estimate revisions while deciding their course of action on a particular stock.
Winning Strategy
Keeping this in mind, we designed a screen to shortlist stocks based on improving analyst recommendations and upward revisions in earnings estimates over the last four weeks.
Also, since the price/sales ratio is a strong complementary valuation metric in the presence of analyst information, it is taken into consideration. The price/sales ratio takes care of the company’s top line, making the strategy foolproof.
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.
To ensure that the strategy is a winning one, covering all bases, we have added the following screening parameters:
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: A stock trading below $5 will not likely create significant interest for most investors.
Average Daily Volume greater than 100,000 shares over the last 20 trading days: Volume has to be significant to ensure that these are easily traded.
Market value ($ mil) = Top #3000: This gives us stocks that are the top 3000 if one judges by 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:
Ohio-based Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (“GMPD”) and other growth businesses.
The Zacks Consensus Estimate for CAH’s fiscal 2026 revenues suggests a year-over-year improvement of 16.2%. Cardinal Health boasts a long-term earnings growth rate of 13.9.% and currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AutoNation is one of the largest automotive retailers in the United States. The company benefits from a wide geographic presence and a steadily expanding dealer network, which helps it reach more customers across key markets. AutoNation has been actively growing through acquisitions.
Beyond physical expansion, AutoNation is strengthening its digital capabilities through its AutoNation Express platform, making online vehicle buying and selling easier for customers. Over the past 60 days, the Zacks Consensus Estimate for AN’s 2026 earnings has been revised 0.4% upward. AutoNation currently carries a Zacks Rank #2.
American Airlines is based in Fort Worth, TX. The gradual increase in air travel demand (particularly for leisure) is aiding AAL. However, high labor costs are hurting the bottom line.
The company’s high debt levels are worrisome as well. Over the past 60 days, the Zacks Consensus Estimate for AAL’s 2026 earnings has been revised 7.5% upward. American Airlines currently carries a Zacks Rank #3 (Hold).
ArcBest provides freight transportation services and solutions. The company is based in Fort Smith, AR. The company is being well-served by its efforts to control costs, improve productivity and enhance service quality.
The company expects its 2026 earnings per share to increase 42.3% on a year-over-year basis. The transportation company missed the consensus mark for earnings in two of the last four quarters and beat the mark in the remaining two. ArcBest currently carries a Zacks Rank #3.
Asbury is a well-diversified auto retailer with multiple income streams that help reduce risk and support steady top-line growth. The company benefits from a balanced mix of new and used vehicle sales, parts, services and finance offerings. Asbury is also pushing ahead with digitization through its Clicklane platform, an end-to-end e-commerce solution that allows customers to complete most of the car-buying process online, improving convenience and efficiency.
The company missed the consensus mark for earnings in one of the last four quarters and beat the mark in the other three quarters. The average beat is 8.4%. Asbury currently carries a Zacks Rank #3.