A number of fundamental and technical aspects are involved in identifying stocks with robust growth potential. It’s not an easy task for individual investors to select stocks on their own. Therefore, guidance from the experts is crucial.
By following broker rating upgrades, an investor can easily find attractive stocks. Brokers have deeper idea about what’s happening in a particular company, as they directly communicate with top management. Also, they exhaustively go through the company’s publicly available documents and attend conference calls.
In addition, brokers have a thorough understanding of the overall industry. They place the company fundamentals against the current economic backdrop to figure out how the stock will fare as an investment.
Therefore, when a broker upgrades a stock, you can rely on their judgment. Nonetheless, depending only on broker upgrades is not a great idea to build your investment portfolio. You should also take into account some other factors 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 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 three of the eight stocks that qualified the screening:
Ralph Lauren (RL - Free Report) designs, markets, and distributes lifestyle products. This New York-based company’s fiscal 2020 earnings are expected to increase 7.7%. The stock, sporting a Zacks Rank #1, has witnessed 7.7% upward revision in broker ratings over the past four weeks.
Based in Houston, TX, Sharps Compliance (SMED - Free Report) provides medical, pharmaceutical and hazardous waste management services. Its earnings are expected to surge 800% in fiscal 2020. The stock, sporting a Zacks Rank #1, has witnessed 33.3% upward revision in broker ratings over the past four weeks.
Headquartered in Armonk, NY, International Business Machines (IBM - Free Report) is an integrated technology and services company. Its earnings are expected to grow 4.1% for 2020. The stock, carrying a Zacks Rank #2, has witnessed 7.1% 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.
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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