For Immediate Release
Chicago, IL – April 9, 2019– Stocks in this week’s article include Delek US Holdings (DK - Free Report) , Ashford Hospitality Trust (AHT - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) , Hibbett Sports (HIBB - Free Report) and Diebold Nixdorf, Inc. (DBD - 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:
Recent Broker Rating Upgrades Make These 5 Stocks Attractive
The sole aim of investors, while designing their portfolio, is to generate handsome returns. However, with a huge number of stocks flooding the market at a particular point of time, the task is anything but simple, more so in the face of time constraints.
In fact, the stock market is not an easy place to master and one needs thorough knowledge to rake in profits. This is where some guidance comes in handy. To get proper guidance, investors often fall back on expert advice while arriving at their investment decision (buy, sell or hold). The experts in the field of investing are brokers as they have at their disposal a lot more information on a company and its prospects than individual investors.
Brokers, irrespective of their types (sell-side, buy-side or independent), undertake thorough research of the stocks covered by them. They go through minute details of the publicly available financial documents apart from attending company conference calls and other presentations. Therefore, the opinion of brokers can act as a valuable guide for investors.
Earnings Estimate Revisions
Since brokers indulge in thorough research, the question of their actions being arbitrary does not arise. Estimate revisions also serve as an important pointer regarding the price of a stock. In fact, an increase in estimates normally leads to stock price appreciation and vice versa.
One of the well-accepted investment strategies is to maintain a diversified portfolio to generate handsome returns irrespective of the market conditions. For instance, in the face of extremely low oil prices, analysts adopt a bullish stance on airline stocks and consequently raise estimates. Naturally, adding such stocks to one’s portfolio in such a scenario might prove to be a winning strategy.
Similarly, analysts might turn bearish and trim estimates, thereby downgrading a stock, following adverse events like lackluster earnings or pipeline failure (for a biotech player). Naturally, investors look to get rid of such stocks from their portfolio on the basis of broker advice.
Designing a Winning Portfolio
To take care of the performance with respect to the bottom line, we have designed a screen based on improving analyst recommendation and upward estimate revisions over the last four weeks.
While we have talked about the bottom line in detail, the top line (revenue portion) cannot be ignored. The price/sales ratio has been clubbed with the above criteria as it is a strong complementary valuation metric in the presence of analyst information. 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/372308/recent-broker-rating-upgrades-make-these-5-stocks-attractive
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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