It is quite difficult to pick winning stocks in a volatile market. It could happen that one might end up with stocks not worth investing in. This is where guidance from “experts in the field” comes in handy.
Since brokers are in direct communication with companies, they have deeper insight into what’s happening in there. Hence, following what the majority of brokers are saying about a stock helps in understanding its potential.
Brokers analyze fundamentals of the company and place them against the current economic backdrop to figure out how the stock will fare as an investment. Further, they have greater understanding of the overall industry and economy.
Specifically, brokers analyze the company’s publicly available financial statements, attend conference calls and communicate directly with top management. They even talk to customers to understand what they like or dislike about the products and services offered by the company.
So, a broker rating is backed by extensive study of a company’s fundamentals. When a broker upgrades a stock, one can easily rely on it.
Nevertheless, it’s not right to solely depend on broker upgrades to build investment portfolio. One should take into consideration certain other factors to ensure strong returns.
Choosing the Winning Strategy
We have a screening strategy that will help in your search for potential winners:
Broker Rating Upgrades (4 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.
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 offer the best upside potential.
Here are four stocks that made it through the screen:
Time Warner Inc (NYSE:TWX), headquartered in New York, operates as a media and entertainment company. Its 2018 earnings are expected to increase 12.8%. The stock, carrying the Zacks Rank #2, has witnessed 5.9% upward revision in broker ratings over the past four weeks.
Based in Mooresville, NC-Lowe’s Companies, Inc. (NYSE:LOW) operates as a home improvement company. This Zacks Rank #2 company’s earnings are expected to increase 28.8% for fiscal 2019. The stock has witnessed 4.4% upward revision in broker ratings over the past four weeks.
Headquartered in Boise, ID, Micron Technology, Inc. (NASDAQ:MU) provides semiconductor systems. The company’s earnings are expected to rise 101.2% in fiscal 2018. This Zacks Rank #1 stock has witnessed 9.5% upward revision in broker ratings over the past four weeks.
Newport News, VA-based Huntington Ingalls Industries Inc (NYSE:HII) is engaged in designing, building, overhauling, and repairing ships. The company’s earnings are expected to surge 10.3% in 2018. The stock, sporting a Zacks Rank #1, has witnessed 16.7% upward revision in broker ratings over the past four weeks.
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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