In the current volatile markets, it’s not easy to select stocks that generate solid returns. One has to understand the fundamentals of every company and try to place them against the present economic background to pick the winners.
Since the operating environment doesn’t look attractive, one may find it difficult choose stocks on their own. In this context, following the broker recommendation is the best and easiest way as they have a deeper insight of stocks and the overall sectors.
Brokers scrutinize the company’s fundamentals and place them against the current economic environment to determine how the stock will fare as an investment option. Also, they go through the company’s publicly available documents, attend conference calls and are in direct communication with management.
Moreover, to get more insight into the company’s products and services, brokers even communicate with customers. Following this in-depth research, they decide to rate the company’s stock. So, when a broker upgrades a stock, one can easily count on it.
However, solely depending on broker recommendations is not the correct way to build investment portfolio. One must also take into consideration certain other factors to ensure steady 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 24 that qualified the screening:
Darden Restaurants, Inc. (DRI - Free Report) , headquartered in Orlando, FL, owns and operates full-service restaurants. Its earnings are expected to increase 1.8% in the current fiscal quarter. The stock, carrying a Zacks Rank #2, has witnessed 4.6% upward revision in broker ratings over the past four weeks.
Based in Bellevue, WA, Esterline Technologies Corporation designs, manufactures and markets engineered products and systems mainly for aerospace and defense customers. Its current-quarter earnings are expected to rise 183.7%. The stock, carrying a Zacks Rank #2, has witnessed 16.7% upward revision in broker ratings over the past four weeks.
Humana Inc. (HUM - Free Report) operates as a health and well-being company. Current-quarter earnings for this Louisville, KY-based company are projected to grow 109.7%. The stock, carrying a Zacks Rank #2, has witnessed 6.7% upward revision in broker ratings over the past four weeks.
IBERIABANK Corporation (IBKC - Free Report) , headquartered in Lafayette, LA, provides commercial and retail banking products and services. Its earnings are expected to increase 27.1% in fourth-quarter 2018. The stock, carrying a Zacks Rank #2, has witnessed 12.5% upward revision in broker ratings over the past four weeks.
United Continental Holdings, Inc. (UAL - Free Report) provides air transportation services. Earnings for this Chicago, IL-based company are projected to surge 120.7% for the current quarter. 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