Selecting stocks from the vast investment universe can be daunting. For this, one has to understand the fundamentals of every company and try to place them against the present economic background to figure out how it may fare as an investment.
One reliable way of doing this is by following broker recommendation. Brokers have more insight into what’s happening in a particular company as they directly communicate with company management. Also, they have a deeper understanding of the overall industry.
Specifically, brokers research on a company’s publicly available financial statements, listen to conference calls and engage in talks directly with the top management. At times, they even talk to customers to gauge what they like or dislike about the products and services offered by the company.
So, after thorough research, brokers decide to rate that particular company’s stock. Naturally, when an analyst upgrades a stock, you can easily rely on it.
Nonetheless, solely depending on analysts’ upgrades is not the right way to build your investment portfolio. One should also take into consideration other factors to ensure solid returns.
Picking 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 five stocks out of seven that qualified the screening:
Nexstar Media Group, Inc. (NXST - Free Report) , headquartered in Irving, TX, operates as a television broadcasting and digital media company. Its earnings are expected to increase 111.3% in 2018. The stock, carrying a Zacks Rank #2, has witnessed 14.3% upward revision in broker ratings over the past four weeks.
Based in New York, Bristol-Myers Squibb Company (BMY - Free Report) discovers, develops, licenses, manufactures, markets, and distributes biopharmaceutical products. Its 2018 earnings are expected to rise 28.6%. The stock, carrying a Zacks Rank #2, has witnessed 9.1% upward revision in broker ratings over the past four weeks.
Capital One Financial Corporation (COF - Free Report) is primarily focused on consumer and commercial lending as well as deposit origination. Current-year earnings for this McLean, VA-based company are projected to grow 59.8%. The stock, carrying a Zacks Rank #2, has witnessed 5.9% upward revision in broker ratings over the past four weeks.
Helmerich & Payne, Inc. (HP - Free Report) , headquartered in Tulsa, OK, primarily engages in drilling oil and gas wells for exploration and production companies. Its earnings are expected to surge 1164.3% in 2018. The stock, carrying a Zacks Rank #2, has witnessed 5% upward revision in broker ratings over the past four weeks.
The Progressive Corporation (PGR - Free Report) provides personal and commercial auto insurance, residential property insurance, and other specialty property-casualty insurance and related services. Current-year earnings for this Mayfield Village, OH-based company are projected to increase 80.6%. The stock, carrying a Zacks Rank #2, has witnessed 6.3% upward revision in broker ratings over the past four weeks.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software.
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.
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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