With 2019 drawing to a close, you should have investment objectives in place for the next year. Thus, this is the right time to add a few great stocks to your portfolio for 2020.
But selecting stocks from the vast investment universe is not an easy task. For this, you have to painstakingly go through the fundamentals of every company and try to place them against the current economic background to figure out how it may fare as an investment.
One way to cut this task out is to follow broker recommendation. Brokers have far more insight into what’s happening in a particular company as they directly communicate with management. Further, they have a deeper understanding of the overall industry.
In addition, brokers thoroughly research a company’s publicly available documents, attend conference calls and engage in talks directly with the top management. At times, they even talk with customers to gauge what they like or dislike about the products and services offered by the company.
Therefore, when brokers rate a particular company’s stock, their judgment can be relied upon.
However, just depending on broker upgrades is not the correct way to build your investment portfolio. You should also take into consideration other factors to ensure solid 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 the five of the seven stocks that qualified the screening:
Bristol-Myers Squibb Company (BMY - Free Report) , based in New York, discovers, develops, licenses, manufactures, markets, distributes and sells biopharmaceutical products. Its earnings are expected to grow 29.4% in 2020. The stock, carrying a Zacks Rank #2, has witnessed 8.3% upward revision in broker ratings over the past four weeks.
Intel Corporation (INTC - Free Report) provides computing, networking, data storage, and communication solutions. This Santa Clara, CA-based company’s 2020 earnings are expected to rise 2.4%. The stock, carrying a Zacks Rank #2, has witnessed 3.7% upward revision in broker ratings over the past four weeks.
Based in Kenilworth, NJ, Merck & Co., Inc. (MRK - Free Report) provides healthcare solutions. Its 2020 earnings are expected to rise 6.6%. The stock, carrying a Zacks Rank #2, has witnessed 10% upward revision in broker ratings over the past four weeks.
NuVasive, Inc. (NUVA - Free Report) , headquartered in San Diego, CA, is a medical device company, which develops and markets minimally disruptive surgical products and procedurally integrated solutions. Its earnings are expected to increase 9.6% in 2020. The stock, carrying a Zacks Rank #1, has witnessed 8.3% upward revision in broker ratings over the past four weeks.
Headquartered in Columbus, OH, Installed Building Products, Inc. (IBP - Free Report) operates as a residential insulation installer. Its earnings are expected to grow 14.4% in 2020. The stock, sporting a Zacks Rank #1, has witnessed 10% 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.
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