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 in depth idea about what’s happening in a particular company, as they directly communicate with the 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.
The Winning Strategy
The following screen will help you in your search for potential winners:
- Broker Rating Upgrades (4 weeks): The screen selects stocks that have witnessed broker rating upgrades over the last four weeks.
- Current Price greater than 15: The stocks must be trading above $15.
- Average 20-day Volume greater than 100,000: A large trading volume guarantees that the stock is easily tradable.
Zacks Rank equal to #1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven record of success. You can see the complete list of today’s Zacks #1 Rank stocks here.
VGM Score equal to 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 (Buy) offer the best upside potential.
Here are five of the 13 stocks that made it through the screen:
Headquartered in El Segundo, CA, Big 5 Sporting Goods Corporation (BGFV) is a sporting goods retailer in the western U.S., offering athletic shoes, apparel, accessories and a broad selection of outdoor and athletic equipment. Over the trailing four quarters, the company delivered an average positive surprise of 4.8%.
The stock has witnessed 20% upward revision in broker ratings over the past four weeks.
Alliance Resource Partners, L.P. (ARLP), headquartered in Tulsa, OK, is a diversified producer and marketer of coal to major U.S. utilities and industrial users. The company boasts a strong surprise history, with a trailing four-quarter average beat of 10.4%.
The stock has witnessed 10% upward revision in broker ratings over the past four weeks.
Carbonite Inc (CARB), based in Boston, MA provides cloud and hybrid business continuity solutions to small and medium sized businesses, and individuals in the U. S. The company boasts a strong surprise history, with a trailing four-quarter average beat of 235.1%.
The stock has witnessed 15.4% upward revision in broker ratings over the past four weeks.
Milwaukee, WI-based ManpowerGroup Inc. (MAN) is the global leader in the employment services industry and has a well-established network of 2,900 offices in 80 countries. The company boasts a strong surprise history, with a trailing four-quarter average beat of 7.3%.
The stock has witnessed 6% upward revision in broker ratings over the past four weeks.
MRC Global Inc (MRC), based in Houston, TX, distributes pipes, valves, fittings, and related products and services to the energy industry in the U.S., Canada, and globally. The company boasts a strong surprise history, with a trailing four-quarter average beat of 83.3%.
The stock has witnessed 8% 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.
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
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