For Immediate Release
Chicago, IL – January 24, 2019 - Stocks in this week’s article are ArcBest Corporation (ARCB - Free Report) , American Airlines (AAL - Free Report) , AmerisourceBergen (ABC - Free Report) , Owens & Minor (OMI - Free Report) and Commercial Metals Company (CMC - Free Report) .
5 Stocks that Look Impressive After Broker Rating Upgrades
The Q4 earnings season is in its nascent stage with 44 S&P 500 participants having reported results according to our latest earnings outlook. The season had a bright start courtesy of earnings beats from big players like JPMorgan Chase & Co. and Delta Air Lines.
Investors will be hoping that the momentum continues throughout the earnings season and a high proportion of companies report better-than-expected numbers. This is because, generally, an earnings beat by a company leads to an uptick in its stock price. Given this backdrop, investors will like to add outperformers to their respective portfolios for healthy returns.
Nonetheless, the task is far from easy with a plethora of companies present in the market. Apart from this, the complexities related to the stock market make it even more difficult for individual investors to select outperformers in their portfolios without proper guidance.
Broker Advice to the Rescue
The requisite guidance to design a winning portfolio comes from brokers. Brokers have a better understanding of stocks, deeper knowledge of the industry and grasp over the broader economy. They scrutinize a company’s fundamentals and place those against the prevalent economic scenario to find out how attractive or otherwise a stock is as an investment option.
Since brokers arrive at their recommendations (buy, sell or hold) for a stock after thoroughly analyzing the nitty-gritties associated with the company, it is advisable for investors to follow the estimate revision directions while deciding their course of action on a particular stock. The estimate revisions serve as an important pointer regarding the price of a stock. Estimates can move north for a number of reasons — favorable earnings performance, a bullish guidance, product launch or any favorable macro scenario.
One of the well-accepted investment strategies is to maintain a diversified portfolio to generate handsome returns irrespective of 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 bullish strategy.
Formulating a Winning Portfolio
We have designed a screener to arrive at stocks based on improving analyst recommendations and upward earnings estimate revisions over the last four weeks. However, considering only these factors does not make our strategy foolproof as the top line has not been considered.
Actually, according to many market watchers, a top-line outperformance is more creditable for a company than a mere earnings outperformance. To address top-line concerns, we have included the price/sales ratio in our screener, which serves as a strong complementary valuation metric.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/730194/5-stocks-that-look-impressive-after-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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