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The Zacks Analyst Blog Highlights: Ellington Financial, Diamond S Shipping, Progress Software, Opera and Shenandoah Telecommunications
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For Immediate Release
Chicago, IL –October 25, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Ellington Financial Inc. (EFC - Free Report) , Diamond S Shipping Inc. , Progress Software Corp. (PRGS - Free Report) , Opera Ltd. (OPRA - Free Report) and Shenandoah Telecommunications Co. (SHEN - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
New Analyst Coverage Puts the Spotlight on These 5 Stocks
The importance of new analyst coverage is evident from the extensive data it unearths for investors. Analysts are privy to vital information, which is crucial for taking investment decisions.
Coverage initiation on a stock by analyst(s) usually portrays higher investor inclination. Investors, on their part, often assume that there is something special in a stock to attract analysts to cover it. In other words, they believe that the company coming under the microscope definitely holds some value.
Do analysts create value for companies by initiating coverage? Of course they do because they play an important intermediary role with their extensive access to relevant data. Many investors have immense faith in analysts’ research as they fear that lack of information might trigger inefficiencies.
Obviously, stocks are not randomly chosen to cover. A new coverage on a stock usually reflects a reassuring future envisioned by the analyst(s). At times, increased investor focus on a stock motivates analysts to take a closer look at it. After all, who doesn’t like to produce something that is already in demand? Hence, we often find that analysts’ ratings on newly added stocks are more favorable than their ratings on continuously covered stocks.
Needless to say, the average change in broker recommendation is more preferable than a single recommendation change.
Impact on Stock Price
The price movement of a stock is generally a function of the recommendations on it from new analysts. Stocks typically see an upward price movement with new analyst coverage compared to what they witness with a rating upgrade under an existing coverage. Positive recommendations – Buy and Strong Buy – generally lead to a significantly positive price reaction than Hold recommendations. On the contrary, analysts hardly initiate coverage with a Strong Sell or Sell recommendation.
Now, if an analyst issues a new recommendation on a company that has very few or no existing coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.
So, it’s a good strategy to bet on stocks that have seen increased analyst coverage over the last few weeks.
Screening Criteria
Number of Broker Ratings now greater than the Number of Broker Ratings four weeks ago (This will shortlist stocks that have recent new coverage).
Average Broker Rating less than Average Broker Rating four weeks ago ('Less than' means 'better than' four weeks ago).
Increased analyst coverage and improving average rating are the primary criteria of this strategy but one should consider other relevant parameters to make the strategy foolproof.
Here are the other screening parameters:
Price greater than or equal to $5(as a stock below $5 will not likely create significant interest for most investors).
Average Daily Volume greater than or equal to 100,000 shares(if volume isn’t enough, it will not attract individual investors).
Here are five of the 16 stocks that passed the screen:
Ellington Financial Inc., a Zacks Rank #1 (Strong Buy) company, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States. Shares of the company have gained 20.2% year to date, underperforming its industry’s rally of 38.7%. Its earnings estimates have risen 4.1% for the current year over the past seven days, depicting analysts’ optimism over the company’s earnings growth potential. The company’s earnings for the current year are expected to grow 26.2%.
Diamond S Shipping Inc., also a Zacks Rank #1 company, operates as a shipping company. Shares of the company have gained 20.4% in the past six months, outperforming its industry’s rally of 9.9%. Earnings estimates have moved 306.5% up for the current year over the past seven days.
Progress Software Corp.is a Zacks Rank #2 (Buy) company, which develops business applications worldwide. Although shares of Progress Software have underperformed its industry year to date, its earnings estimates have risen 2.3% for the current year over the past 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Opera Ltd., also a Zacks Rank #3 (Hold) company, provides mobile and PC web browsers in Ireland, Russia and internationally. Shares of the company have gained 77.2% year to date, outperforming its industry’s rally of 4%. Earnings estimates have moved 52.6% up for the current year over the past 60 days.
Shenandoah Telecommunications Co., a Zacks Rank #3 (Hold) company, primarily provides wireless, cable, and wireline telecommunications services to customers and other telecommunications providers. Shares of the company have gained 14.5% year to date, outperforming its industry’s rally of 6%. The company’s earnings for the current year are expected to grow 24.7%.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
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.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Ellington Financial, Diamond S Shipping, Progress Software, Opera and Shenandoah Telecommunications
For Immediate Release
Chicago, IL –October 25, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Ellington Financial Inc. (EFC - Free Report) , Diamond S Shipping Inc. , Progress Software Corp. (PRGS - Free Report) , Opera Ltd. (OPRA - Free Report) and Shenandoah Telecommunications Co. (SHEN - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
New Analyst Coverage Puts the Spotlight on These 5 Stocks
The importance of new analyst coverage is evident from the extensive data it unearths for investors. Analysts are privy to vital information, which is crucial for taking investment decisions.
Coverage initiation on a stock by analyst(s) usually portrays higher investor inclination. Investors, on their part, often assume that there is something special in a stock to attract analysts to cover it. In other words, they believe that the company coming under the microscope definitely holds some value.
Do analysts create value for companies by initiating coverage? Of course they do because they play an important intermediary role with their extensive access to relevant data. Many investors have immense faith in analysts’ research as they fear that lack of information might trigger inefficiencies.
Obviously, stocks are not randomly chosen to cover. A new coverage on a stock usually reflects a reassuring future envisioned by the analyst(s). At times, increased investor focus on a stock motivates analysts to take a closer look at it. After all, who doesn’t like to produce something that is already in demand? Hence, we often find that analysts’ ratings on newly added stocks are more favorable than their ratings on continuously covered stocks.
Needless to say, the average change in broker recommendation is more preferable than a single recommendation change.
Impact on Stock Price
The price movement of a stock is generally a function of the recommendations on it from new analysts. Stocks typically see an upward price movement with new analyst coverage compared to what they witness with a rating upgrade under an existing coverage. Positive recommendations – Buy and Strong Buy – generally lead to a significantly positive price reaction than Hold recommendations. On the contrary, analysts hardly initiate coverage with a Strong Sell or Sell recommendation.
Now, if an analyst issues a new recommendation on a company that has very few or no existing coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.
So, it’s a good strategy to bet on stocks that have seen increased analyst coverage over the last few weeks.
Screening Criteria
Number of Broker Ratings now greater than the Number of Broker Ratings four weeks ago (This will shortlist stocks that have recent new coverage).
Average Broker Rating less than Average Broker Rating four weeks ago ('Less than' means 'better than' four weeks ago).
Increased analyst coverage and improving average rating are the primary criteria of this strategy but one should consider other relevant parameters to make the strategy foolproof.
Here are the other screening parameters:
Price greater than or equal to $5(as a stock below $5 will not likely create significant interest for most investors).
Average Daily Volume greater than or equal to 100,000 shares(if volume isn’t enough, it will not attract individual investors).
Here are five of the 16 stocks that passed the screen:
Ellington Financial Inc., a Zacks Rank #1 (Strong Buy) company, acquires and manages mortgage-related, consumer-related, corporate-related, and other financial assets in the United States. Shares of the company have gained 20.2% year to date, underperforming its industry’s rally of 38.7%. Its earnings estimates have risen 4.1% for the current year over the past seven days, depicting analysts’ optimism over the company’s earnings growth potential. The company’s earnings for the current year are expected to grow 26.2%.
Diamond S Shipping Inc., also a Zacks Rank #1 company, operates as a shipping company. Shares of the company have gained 20.4% in the past six months, outperforming its industry’s rally of 9.9%. Earnings estimates have moved 306.5% up for the current year over the past seven days.
Progress Software Corp.is a Zacks Rank #2 (Buy) company, which develops business applications worldwide. Although shares of Progress Software have underperformed its industry year to date, its earnings estimates have risen 2.3% for the current year over the past 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Opera Ltd., also a Zacks Rank #3 (Hold) company, provides mobile and PC web browsers in Ireland, Russia and internationally. Shares of the company have gained 77.2% year to date, outperforming its industry’s rally of 4%. Earnings estimates have moved 52.6% up for the current year over the past 60 days.
Shenandoah Telecommunications Co., a Zacks Rank #3 (Hold) company, primarily provides wireless, cable, and wireline telecommunications services to customers and other telecommunications providers. Shares of the company have gained 14.5% year to date, outperforming its industry’s rally of 6%. The company’s earnings for the current year are expected to grow 24.7%.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
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.
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support@zacks.com
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.