With first-half 2020 almost drawing to a close, you should have your investment objectives in place for the latter half of the year. Overall, the markets have been extremely volatile amid coronavirus-related mayhem and economic slowdown. A similar trend is expected to continue in the near term.
Hence, it is not easy for individual investors to choose stocks on their own. So, advice from brokers is vital.
Brokers have far more insight into what’s happening in a particular company as they directly communicate with management. Also, they have a deeper understanding of the overall industry and economy.
Brokers scrutinize the fundamentals of companies and place them against the present economic backdrop to find out how the stocks will fare as an investment option. Therefore, when brokers rate a particular company’s stock, their judgment can be relied upon.
However, just depending on broker upgrades is not advisable. You must also take into consideration a few other factors before adding a stock to your investment portfolio. In this way, you can ensure solid returns.
Choosing the Winning Strategy
We have a screening strategy that will help you 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 five of the 25 stocks that qualified the screening:
Based in Burlington, MA, Keurig Dr Pepper, Inc (KDP - Free Report) is a beverage and coffee company. The company’s long-term (three to five years) estimated earnings growth rate is 11.6%. The stock, currently carrying a Zacks Rank #2, has witnessed 10% upward revision in broker ratings over the past four weeks.
Hologic, Inc. (HOLX - Free Report) is a medical technology company that develops, manufactures, and supplies diagnostics products, medical imaging systems, surgical products, as well as light-based aesthetic and medical treatment systems. This Marlborough, MA-based company’s long-term estimated earnings growth rate is 7%. The stock, carrying a Zacks Rank #2 at present, has witnessed 6.3% upward revision in broker ratings over the past four weeks.
Headquartered in Scottsdale, AZ, Meritage Homes Corporation (MTH - Free Report) designs and builds single-family homes. Its long-term estimated earnings growth rate is 2.5%. The stock, currently carrying a Zacks Rank #2, has witnessed 16.7% upward revision in broker ratings over the past four weeks.
Vistra Energy Corp. (VST - Free Report) is engaged in the electricity business. This Irving, TX-based company’s long-term estimated earnings growth rate is 18.9%. The stock, sporting a Zacks Rank #1 at present, has witnessed 14.3% upward revision in broker ratings over the past four weeks.
Sally Beauty Holdings, Inc. (SBH - Free Report) , based in Denton, TX, operates as a specialty retailer and distributor of professional beauty supplies. Its long-term estimated earnings growth rate is 4.1%. The stock, currently carrying a Zacks Rank #2, has witnessed 11.1% 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