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The coronavirus pandemic, apart from claiming multiple lives and infecting scores globally, dented equity markets keeping investors on the edge. However, irrespective of the surroundings, the sole focus of investors while designing their portfolio lies on generating handsome returns.
With a plethora of stocks flooding the market at any point of time, it is highly possible for an investor to make a wrong choice while building the portfolio. Choice of improper stocks can adversely impact his/her returns, thereby ruining the very objective of investing the hard-earned money in a highly unpredictable stock market. To avoid such scenario and prevent the invested money from going down the drain, it is in the best interest of investors to be guided by a panel of “experts” in this field.
The “experts” are brokers who are well-equipped with thorough knowledge on the space. Brokers, irrespective of their types (sell-side, buy-side or independent), have at their disposal a lot more data on a specific company and its potential than an individual investor.
Such investment specialists take conference calls, drop in at company demonstrations and also communicate with management. Moreover, they revise their earnings estimates for a particular stock after carefully examining the pros and cons of an event. Naturally, their stock-related actions (upgrade or downgrade) serve as an invaluable precedent as far as fixing the target price of stock (s) is concerned.
Making the Most of Broker Opinions
The above write-up clearly suggests that by following broker moves judiciously, one can arrive at a winning portfolio of stocks. Keeping this in mind, we designed a screen to shortlist stocks based on improving analyst recommendation and upward revisions to earnings estimates over the last four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of analyst information, it is included as one of the parameters to determine a best bet. The price/sales ratio takes care of the company’s top line, making the strategy foolproof.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks).
% change in Q (1) est. (4 weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter).
We have also added the following screening parameters to ensure that the strategy is a winning one:
Price-to-Sales = Bot%10 (The lower the ratio the better, companies meeting this criteria are in bottom 10% of our universe of over 7,700 stocks with respect to this ratio).
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com (This takes out the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
Headquartered in Dublin, OH, Cardinal Health (CAH - Free Report) is a nation-wide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. The company has a Zacks Rank #1 (Strong Buy) and an impressive earnings record, having outshined the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 15%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Based in Chesterbrook, PA, AmerisourceBergen Corporation is one of the world’s largest pharmaceutical services companies. It focuses on providing drug distribution and related services in a bid to reduce health care costs and improve patient outcomes. This Zacks Rank #3 (Hold) stock has an expected earnings per share growth rate of 7.4% for three to five years.
Atlas Air Worldwide Holdings : This Zacks Rank #2 (Buy) company is a provider of outsourced aircraft and aviation operating services. Over the past 60 days, the Zacks Consensus Estimate for the stock’s current-year earnings has moved 54.7% north.
Pittsburgh, PA-domiciled Allegheny Technologies (ATI - Free Report) is a diversified specialty materials producer. The stock carries a Zacks Rank #3 (Hold). The company’s expected earnings growth rate for the current quarter is 16.7% against its industry's projected decline of 72.4%.
Woonsocket, RI-headquartered CVS Health Corporation (CVS - Free Report) is a pharmacy innovation company with integrated offerings across the entire spectrum of pharmacy care. The company has a Zacks Rank of 3 and an excellent earnings history, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The positive surprise is 6.5%, on average.
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.
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.
Image: Bigstock
5 Broker-Friendly Stocks Amid Coronavirus-Led Pandemonium
The coronavirus pandemic, apart from claiming multiple lives and infecting scores globally, dented equity markets keeping investors on the edge. However, irrespective of the surroundings, the sole focus of investors while designing their portfolio lies on generating handsome returns.
With a plethora of stocks flooding the market at any point of time, it is highly possible for an investor to make a wrong choice while building the portfolio. Choice of improper stocks can adversely impact his/her returns, thereby ruining the very objective of investing the hard-earned money in a highly unpredictable stock market. To avoid such scenario and prevent the invested money from going down the drain, it is in the best interest of investors to be guided by a panel of “experts” in this field.
The “experts” are brokers who are well-equipped with thorough knowledge on the space. Brokers, irrespective of their types (sell-side, buy-side or independent), have at their disposal a lot more data on a specific company and its potential than an individual investor.
Such investment specialists take conference calls, drop in at company demonstrations and also communicate with management. Moreover, they revise their earnings estimates for a particular stock after carefully examining the pros and cons of an event. Naturally, their stock-related actions (upgrade or downgrade) serve as an invaluable precedent as far as fixing the target price of stock (s) is concerned.
Making the Most of Broker Opinions
The above write-up clearly suggests that by following broker moves judiciously, one can arrive at a winning portfolio of stocks. Keeping this in mind, we designed a screen to shortlist stocks based on improving analyst recommendation and upward revisions to earnings estimates over the last four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of analyst information, it is included as one of the parameters to determine a best bet. The price/sales ratio takes care of the company’s top line, making the strategy foolproof.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks).
% change in Q (1) est. (4 weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter).
We have also added the following screening parameters to ensure that the strategy is a winning one:
Price-to-Sales = Bot%10 (The lower the ratio the better, companies meeting this criteria are in bottom 10% of our universe of over 7,700 stocks with respect to this ratio).
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com (This takes out the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
Headquartered in Dublin, OH, Cardinal Health (CAH - Free Report) is a nation-wide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. The company has a Zacks Rank #1 (Strong Buy) and an impressive earnings record, having outshined the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 15%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Based in Chesterbrook, PA, AmerisourceBergen Corporation is one of the world’s largest pharmaceutical services companies. It focuses on providing drug distribution and related services in a bid to reduce health care costs and improve patient outcomes. This Zacks Rank #3 (Hold) stock has an expected earnings per share growth rate of 7.4% for three to five years.
Atlas Air Worldwide Holdings : This Zacks Rank #2 (Buy) company is a provider of outsourced aircraft and aviation operating services. Over the past 60 days, the Zacks Consensus Estimate for the stock’s current-year earnings has moved 54.7% north.
Pittsburgh, PA-domiciled Allegheny Technologies (ATI - Free Report) is a diversified specialty materials producer. The stock carries a Zacks Rank #3 (Hold). The company’s expected earnings growth rate for the current quarter is 16.7% against its industry's projected decline of 72.4%.
Woonsocket, RI-headquartered CVS Health Corporation (CVS - Free Report) is a pharmacy innovation company with integrated offerings across the entire spectrum of pharmacy care. The company has a Zacks Rank of 3 and an excellent earnings history, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The positive surprise is 6.5%, on average.
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
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.