For Immediate Release
Chicago, IL – January 21, 2019– Stocks in this week’s article include American Airlines Group (AAL - Free Report) , ArcBest Corp. (ARCB - Free Report) , AmerisourceBergen (ABC - Free Report) , Cardinal Health (CAH - Free Report) and CVS Health Corp. (CVS - Free Report) . Kevin Matras screens for companies showing their 'first' profit and explains why they are ones to watch.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
5 Stocks in Focus After Recent Broker Rating Upgrades
The picture to have emanated from Q4 releases so far is an impressive one. The top and the bottom lines of S&P 500 companies that have reported so far have expanded 8.5% and 18.3%, respectively on a year-over-year basis, according to the latest Earnings Outlook.
While 58.3% companies beat expectations on the revenue front, 77.8% companies outpaced the Zacks Consensus Estimate with respect to earnings. Generally, an earnings beat by a company leads to an uptick in its stock price. Investors like to add outperformers to their respective portfolios for healthy returns.
However, the task is far from easy with a plethora of companies present in the market. Moreover, the complexities associated with the stock market make it even more difficult for individual investors to select outperformers in their portfolios in the absence of proper guidance.
Broker Advice to the Rescue
The requisite guidance to design a winning portfolio comes from brokers. Brokers, not only scrutinize the publicly available financial documents but also attend company conference calls and other presentations.
The estimate revisions serve as an important pointer regarding the price of a stock. In fact, a rating upgrade generally leads to stock price appreciation. Similarly, the price of a stock may plummet following a rating downgrade.
Estimates can move north for a number of reasons – favorable earnings performance, a bullish guidance, product launch or any favorable macro scenario. To take care of the earnings performance, we have designed a screen based on improving analyst recommendation and upward estimate revisions over the last four weeks.
The above write-up clearly suggests that by following broker actions, one can arrive at a winning portfolio of stocks. Keeping this in mind, we have designed a screen to shortlist stocks based on improving analyst recommendation and upward revisions to 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 has been included. The price/sales ratio takes care of the company’s top line, making the strategy foolproof.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/348278/5-stocks-in-focus-after-recent-broker-rating-upgrades
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.
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