5 Best Stocks with Upgraded Broker Ratings to Buy Right Now

With the fourth quarter earnings season underway in full force, many companies have come out with better-than-expected results and are influencing market sentiments. While earnings beat is a good indicator of stock’s future performance, identifying growth drivers is not always easy.

This is where advice from experts comes in handy. One effective and simple way to choose profitable stocks is to follow rating upgrades by brokers, as they have a deeper understanding of the stocks and the overall economy.

Brokers scrutinize the company’s fundamentals through publicly available documents. Also, they attend conference calls and even directly communicate with the top executives. So, there’s extensive research behind the rating of a broker on a company’s stock.

Naturally, when an analyst upgrades a stock, you can easily rely on it. But, it’s not right to just depend on analysts’ upgrades to build your investment portfolio. You must also take into consideration certain other factors to ensure strong returns.

The Winning Strategy

Here we have a screening strategy that will help 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 10: The stocks must be trading above $10.

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: 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 11 stocks that made it through the screen:

Headquartered in Charlotte, NC, Extended Stay America, Inc. STAY develops, owns, and operates hotels in the United States and Canada. Over the trailing four quarters, the company delivered an average positive surprise of 8.0%. The stock has witnessed 14.3% upward revisions in broker ratings over the past four weeks.

Lafayette, IN-based Wabash National Corporation WNC designs, manufactures, and markets truck and tank trailers, intermodal equipment, and transportation related products in North America. The company boasts a strong surprise history, with a trailing four-quarter average beat of 30.2%. The stock has witnessed 17.7% upward revision in broker rating over the past four weeks.

Houston, TX-based NCI Building Systems, Inc. NCS designs, engineers, manufactures, and markets metal products for the non-residential construction industry in North America. The company boasts a strong surprise history, with a trailing four-quarter average beat of 87.3%. The stock has witnessed 33.3% upward revision in broker rating over the past four weeks.

Irvine, CA-based Western Digital Corporation WDC develops, manufactures, and sells data storage devices and solutions worldwide. Over the trailing four quarters, the company delivered an average positive surprise of 9.7%. The stock has witnessed 1.6% upward revision in broker ratings over the past four weeks.

Teradyne, Inc. TER, based in North Reading, MA, designs, develops, manufactures, and sells automatic test equipment worldwide. Over the trailing four quarters, the company delivered an average positive surprise of 24.9%.   The stock has witnessed 5.9% 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

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Western Digital Corporation (WDC): Free Stock Analysis Report
 
Wabash National Corporation (WNC): Free Stock Analysis Report
 
NCI Building Systems, Inc. (NCS): Free Stock Analysis Report
 
Teradyne, Inc. (TER): Free Stock Analysis Report
 
Extended Stay America, Inc. (STAY): Free Stock Analysis Report
 
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