A lot of investors like to take a break from the market during the summer season. By doing so, they miss out on some important trends. I don’t want you to succumb to their fate—being behind the eight ball when volume returns to the market and stocks start their inevitable rise. So let’s look at what this month has in store in the way of profit opportunities.
June is known as an earnings pre-announcement month. Now that first-quarter earnings season has come and gone, institutional investors have their eye on what analysts are predicting for second-quarter corporate profits.
Analyst Earnings Revisions: A Powerful Profit Predictor
Analysts publish their best estimates for earnings at the beginning of each quarter. As the earnings date nears, however, and the picture of a company’s performance becomes clearer, analysts frequently have to revise their estimates to make them more accurate. This too can draw buying interest, if the estimates are increasing. Given that analysts are often too conservative when it comes to fundamentally sound companies, positive revisions can lead to earnings surprises.
Your Own Personal Guide
So what I look for every earnings season is stocks with not only the highest year-over-year earnings and sales growth, but also the ones with the most aggressive upward earnings revisions. And you can do the same by running your positions through Portfolio Grader. One metric that my stock screening tool covers is analyst earnings revisions.
For example, if you were to run Apple (AAPL) through Portfolio Grader, you’d immediately see that the analyst community isn’t very bullish about this gadget giant—AAPL currently receives a D for Analyst Earnings Revisions. In fact, over the past ninety days, the average earnings estimate for this quarter has been slashed nearly 25%. Ouch!
It just goes to show that a lot can happen in a matter of weeks, or even days. Last week’s buys could become today’s holds, or even sells. So I can’t stress enough how important it is to continuously check up on your stocks, including by running them through Portfolio Grader. Now that analyst activity has picked up, let’s take a moment to review the 75 big name blue chips that have been upgraded or downgraded in Portfolio Grader over the weekend.
Upgrades
Last Week’s Holds, Now Buys
| Symbol | Company Name | Quantitative Grade | Fundamental Grade |
| ACE | ACE | B | B |
| ADBE | Adobe Systems | B | C |
| AIG | American International Group | B | C |
| BSX | Boston Scientific | B | D |
| EMN | Eastman Chemical | B | B |
| F | Ford | B | C |
| FITB | Fifth Third Bancorp | B | B |
| HES | Hess | C | B |
| HIG | Hartford Financial Services Group | B | C |
| IR | Ingersoll-Rand | B | C |
| KYO | Kyocera | B | C |
| LINTA | Liberty Interactive Corp. Interactive Series A | B | C |
| MA | MasterCard | B | B |
| MFC | Manulife Financial | B | C |
| MSI | Motorola Solutions | B | B |
| MUR | Murphy Oil | B | C |
| ORLY | O’Reilly Automotive | B | B |
| ROP | Roper Industries | B | B |
| RRC | Range Resources | B | C |
| SNDK | SanDisk | B | B |
| TV | Grupo Televisa S.A.B. ADS | B | C |
| WFC | Wells Fargo | B | B |
Last Week’s Sells, Now Holds
| Symbol | Company Name | Quantitative Grade | Fundamental Grade |
| AGU | Agrium | C | C |
| AMTD | TD Ameritrade | C | C |
| APC | Anadarko Petroleum | C | C |
| AV | Aviva | C | C |
| DHR | Danaher | D | C |
| ERIC | Ericsson | C | D |
| HPQ | Hewlett-Packard | C | C |
| KSS | Kohl’s | C | B |
| LVS | Las Vegas Sands | C | B |
| PRU | Prudential Financial | C | C |
| SDRL | Seadrill Ltd. | C | B |
| TS | Tenaris S.A. | C | C |
Downgrades
Last Week’s Buys, Now Holds
| Symbol | Company Name | Quantitative Grade | Fundamental Grade |
| ABT | Abbott | C | B |
| ADP | Automatic Data Processing | C | C |
| BAP | Credicorp | C | B |
| BCE | BCE | C | B |
| BEN | Franklin Resources | C | B |
| DAL | Delta Air Lines | B | C |
| DG | Dollar General | D | B |
| DIS | Walt Disney | C | B |
| ENB | Enbridge | C | C |
| EPD | Enterprise Products | C | B |
| GPC | Genuine Parts | C | C |
| HCP | HCP | C | B |
| KMI | Kinder Morgan | C | C |
| NEE | NextEra Energy | C | D |
| NGG | National Grid PLC | C | C |
| NLSN | Nielsen Holdings | C | C |
| NU | Northeast Utilities | C | B |
| PAYX | Paychex | C | C |
| PSA | Public Storage | C | C |
| SYY | Sysco | B | C |
| TRP | TransCanada | C | C |
| UAL | United Continental Holdings | C | C |
| VIA | Viacom | C | C |
| WMT | Wal-Mart | C | C |
Last Week’s Holds, Now Sells
| Symbol | Company Name | Quantitative Grade | Fundamental Grade |
| ABV | Companhia de Bebidas das Americas ADS | D | C |
| BEAM | Beam | D | B |
| COP | ConocoPhillips | D | C |
| CTL | CenturyLink | D | B |
| D | Dominion | D | D |
| DUK | Duke Energy | D | C |
| EIX | Edison International | D | B |
| FRX | Forest Laboratories | D | D |
| HMC | Honda Motor | D | D |
| HOG | Harley-Davidson | D | B |
| KO | Coca-Cola | D | C |
| PCG | PG&E | D | C |
| RDS.B | Royal Dutch Shell PLC | D | C |
| T | AT&T | F | C |
| WFM | Whole Foods Market Inc. | D | B |
| XEL | Xcel Energy | D | C |
| XRX | Xerox | F | B |
