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Zacks.com featured highlights: Dean Foods, Big Lots, Ashford Hospitality Trust, California Resources and Bunge

For Immediate Release

Chicago, IL – July 22, 2016 - Stocks in this week’s article include: Dean Foods Company (DF), Big Lots, Inc. (BIG), Ashford Hospitality Trust, Inc. (AHT), California Resources Corporation (CRC) and Bunge Ltd. ( BG).

Screen of the Week of Zacks Investment Research:

Bet on These 5 Stocks with Recent Broker Rating Upgrades

The saying “Strike while the iron is hot” is appropriate in all walks of life and the investing corner is no exception. Investors, after all are putting their hard earned money into a stock. Naturally, they won’t want the money to go down the drain and will want to make handsome returns out of their portfolio of stocks.

One of the well-accepted winning strategies is to maintain a diversified portfolio that would lead to handsome returns at all times.

With time at a premium these days, it is next to impossible for investors to keep track of market movements to identify opportune moment(s) for buying or offloading a particular stock to maximize returns. Therefore, one needs guidance from proper channels, backed by sound logic and not out of the blue.

Broker Ratings– A Valuable Guide

Investors more often than not fall back on opinions of broker(s)/analysts following a particular stock while arriving at their investment decision (buy, sell or hold). Generally, three types of brokers (sell-side, buy-side and independent) are present in the investment world, with sell-side analysts being most common. They are employed by various brokerage firms to provide unbiased opinion to investors on the stocks under their coverage after thorough research. Buy-side analysts are employed by hedge funds, mutual funds etc. while the independent ones simply sell their reports to investors.

Analysts attend company conference calls/presentations and scrutinize every detail available publicly before advising investors about their course of action. Naturally, it is in the best interest of investors to pay heed to such well-researched information as they aim to generate maximum returns from their portfolio.

Earnings Estimate Revisions

Since brokers follow the stocks in their coverage minutely, they revise their earnings estimates on a stock after carefully examining the pros and cons of an event for the concerned company. Their action is certainly not arbitrary or illogical. The estimate revisions serve as an important pointer regarding the price of a stock.

Upward estimate revisions generally lead to prices moving north. Similarly, lackluster earnings results often lead to stock price depreciation. Investors tend to be guided by the direction of estimate revisions and stock price while formulating their investment strategy. To take care of the earnings performance, we have designed a screen based on improving analyst recommendation and upward estimate revisions over the last four weeks.

What About Top Line?

While we have talked about the bottom line in detail, the top line (revenue portion) cannot be ignored. Actually, according to many market watchers a revenue beat is more creditable for a company than a mere earnings outperformance, especially in an environment of revenue weakness due to macroeconomic headwinds like a strong dollar or lackluster demand for travel (which will hurt travel-focused companies). To address top-line concerns, we have included in our screen the price/sales ratio which serves as a strong complementary valuation metric.

Screening Criteria

# (Up- Down Rating)/ Total (4 weeks) =Top #75 : This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks.

% change in Q (1) est. (4 weeks) = Top #10 : This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter.

To ensure that the strategy is a winning one, covering all bases, we have added the following screening parameters:

Price-to-Sales = Bot%10 : The lower the ratio the better, companies meeting this criteria are in bottom 10% of our universe of over 7,700 stocks with respect to this ratio.

Price greater than 5 : A stock trading below $5 will not likely create significant interest for most investors.

Average Daily Volume greater than 100,000 shares over the last 20 trading days : Volume has to be significant to ensure that these are easily traded.

Market value ($ mil) = Top #3000 : This gives us stocks that are the top 3000 if one judges by market capitalization.

Com/ADR/Canadian= Com : This takes out the ADR and Canadian stocks.

Here are five of the 10 stocks that made it through the screen:

Dean Foods Company (DF) , based in Dallas, TX, is a leading processor and distributor of milk and other dairy products in the U.S. as well as a leading manufacturer of various specialty food products. The company has an impressive track with respect to earnings, having surpassed the Zacks Consensus Estimate in each of the last four quarters by an average of 17.8%.

Big Lots, Inc. (BIG) , based in Columbus, OH and founded in 1967, is a broad-line closeout retailer in the United States. The company offers products under various merchandising categories, which include Food, Consumables, Furniture, Seasonal, Soft Home, Hard Home, and Electronics & Accessories. The company has an impressive record with respect to earnings, having surpassed the Zacks Consensus Estimate in three out of the last four quarters by an average of 8.5%.

Ashford Hospitality Trust, Inc. (AHT) is a Dallas, TX-based hotel real estate investment trust engaged in investment and management of properties in the hospitality sector. For 2016, the company’s earnings are projected to grow 7.40%, which is higher than the industry average of 4.1%.

California Resources Corporation (CRC) , based in Los Angeles, CA, produces, gathers, processes and markets crude oil, natural gas, natural gas liquids and electricity primarily in its home state. The company has an impressive track with respect to earnings, having surpassed the Zacks Consensus Estimate in three out of the last four quarters by an average of 14.5%.

Bunge Ltd. (BG) : Based in White Plains, NY, Bunge is a leading agribusiness and food company with over 35,000 employees and operations in about 40 countries. It is a global leader in oilseed processing, and grain & oilseed marketing. The company’s 2016 earnings are projected to grow at 10.20%, which is higher than the industry average of 9.9%.

You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.

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.

Click here to sign up for a free trial to the Research Wizard today .

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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Sign up now for your free trial today and start picking better stocks immediately. And with the backtesting feature, you can test your ideas to see how you can improve your trading in both up markets and down markets. Don’t wait for the market to get better before you decide to do better. Start learning how to be a better trader today: https://at.zacks.com/?id=111
 

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.


About Screen of the Week

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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DEAN FOODS CO (DF): Free Stock Analysis Report
 
BIG LOTS INC (BIG): Free Stock Analysis Report
 
ASHFORD HOSPTLY (AHT): Free Stock Analysis Report
 
CA RESOURCES CP (CRC): Free Stock Analysis Report
 
BUNGE LTD (BG): Free Stock Analysis Report
 
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