Market sentiments have been relatively positive over the past few days. While this indicates that fresh investments could be profitable, one could end up buying overvalued stocks.
Wondering how to select the right stocks? Here, expert advice can be very helpful. So, one way is to follow rating upgrades by brokers.
As brokers directly communicate with the top management, they have in-depth idea about what’s happening in a particular company. Further, they diligently go through the company’s publicly available documents and even attend conference calls.
Moreover, brokers have a thorough understanding of the overall sector and industry. They place the company fundamentals against the current economic backdrop to figure out how the stock will fare as an investment.
Hence, when brokers upgrade a stock, you can rely on their judgment. But solely depending on broker upgrades is not a good way to build your investment portfolio. Several other factors should be taken into consideration to ensure steady returns.
Choosing 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 past 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 three stocks that qualified the screening:
Based in Kansas City, MO, Evergy, Inc. (EVRG - Free Report) supplies electricity in Kansas and Missouri. Its 2019 sales are expected to rise 28%. The stock, sporting a Zacks Rank #1, has witnessed 16.7% upward revision in broker ratings over the past four weeks.
Canadian Solar Inc. (CSIQ - Free Report) , headquartered in Guelph, Canada, designs, develops, manufactures and sells solar ingots, wafers, cells, modules and other solar power products. Its sales growth is expected to be 10.7% in 2019. The stock, sporting a Zacks Rank #1, has witnessed 25% upward revision in broker ratings over the past four weeks.
Western Gas Equity Partners, LP is engaged in the gathering, processing, compressing, treating, stabilizing and transporting natural gas, condensate, natural gas liquids and crude oil. Sales for this The Woodlands, TX-based company are projected to increase 16.7% for 2019. The stock, carrying a Zacks Rank #2, has witnessed 11.1% upward revision in broker ratings over the past four weeks.
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.
Click here to sign up for a free trial to the Research Wizard today.
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