It’s not easy for an individual investor to pick stocks on his own and gain from it, given several fundamental and technical aspects that need to be considered for spotting potential winners. This is where expert advice comes in handy.
Since brokers are in direct communication with companies, they have more insight into what’s happening in it. So, following what the majority of brokers are saying about a stock can help understand its potential easily.
Also, they analyze fundamentals of the company and place them against the present economic backdrop to figure out how the stock will fare as an investment. Further, brokers have a deeper understanding of the overall industry and economy.
Precisely, brokers analyze a company’s publicly available financial statements, attend conference calls and communicate directly with top management. Additionally, they even talk to customers to understand what they like or dislike about the products and services offered by the company.
So, there’s comprehensive research behind the rating of a broker on a company’s stock. Naturally, when an analyst upgrades a stock, one can easily rely on it.
Nevertheless, it’s not correct to solely depend on analysts’ upgrades to build your investment portfolio. One must also take into consideration certain other factors to ensure strong returns.
Selecting the Winning Strategy
We have a screening strategy that will help in your search for potential winners:
Broker Rating Upgrades (four weeks) of 1% or more: The screen selects stocks that have witnessed broker rating upgrades of 1% or more over the last four weeks.
Current Price greater than 5: The stocks must be trading above $5.
Average 20-day Volume greater than 100,000: A large trading volume guarantees that the stock is easily tradable.
Zacks Rank equal to #1 or 2: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) have a proven record of success. You can see the complete list of today’s Zacks #1 Rank stocks here.
VGM Score of A or B: Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 offer the best upside potential.
Here are four stocks that qualified the screening:
Based in Riverwoods, IL, Discover Financial Services (DFS - Free Report) operates as a direct banking and payment services company. Its 2018 earnings are expected to rise 30.6%. The stock, carrying a Zacks Rank #2, has witnessed 5.9% upward revision in broker ratings over the past four weeks.
Urban Outfitters, Inc. (URBN - Free Report) , headquartered in Philadelphia, PA, is engaged in the retail and wholesale of general consumer products. Its earnings are expected to increase 59.9% in fiscal 2019. The stock, sporting a Zacks Rank #1, has witnessed 5% upward revision in broker ratings over the past four weeks.
Targa Resources Corp. (TRGP - Free Report) owns, operates, acquires and develops a portfolio of midstream energy assets. Current-year earnings for this Houston, TX-based company are projected to jump 162.8%. The stock, carrying a Zacks Rank #2, has witnessed 6.3% upward revision in broker ratings over the past four weeks.
The Children's Place, Inc. (PLCE - Free Report) , headquartered in Secaucus, NJ, operates as a children's specialty apparel retailer. The company’s earnings are expected to increase 3.3% in fiscal 2019. The stock, carrying a Zacks Rank #2, has witnessed 12.5% upward revision in broker ratings over the past four weeks.
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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