With third-quarter earnings underway, many companies have come out with better-than-expected results and are influencing market sentiments. While an earnings beat is a good indicator of stock’s future performance, identifying growth drivers is not an easy task.
An effective and simple way to zero in on the right stocks is to follow broker rating upgrades as they have a deeper insight into companies, sectors and the overall economy. Also, brokers directly communicate with the top management. They painstakingly go through the company’s publicly available documents and attend conference calls.
Further, they scrutinize the fundamentals of a company and place them against the current economic backdrop to determine how the stock will fare as an investment option. Hence, by following broker rating upgrades, one can easily find promising stocks.
Nevertheless, solely depending on broker upgrades is not the correct way to build an investment portfolio. One should also take into account certain other factors to ensure steady returns.
Choosing the Winning Strategy
We have a screening strategy that will help in your search for potential winners:
Broker Rating Upgrades (four 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. You can see the complete list of today’s Zacks #1 Rank stocks here.
VGM Score of 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 of the seven stocks that qualified the screening:
Lowe's Companies, Inc. LOW, based in Mooresville, NC, operates as a home improvement retailer. Its earnings are expected to grow 10.3% in 2019. The stock, carrying a Zacks Rank #2, has witnessed 4.6% upward revision in broker ratings over the past four weeks.
Based in New York, Bristol-Myers Squibb Company BMY discovers, develops, licenses, manufactures, markets, distributes and sells biopharmaceutical products. Its 2019 earnings are expected to increase 7.8%. The stock, carrying a Zacks Rank #2, has witnessed 9.1% upward revision in broker ratings over the past four weeks.
AECOM ACM, headquartered in Los Angeles, CA, is engaged in designing, building, financing and operating infrastructure assets. Its earnings are expected to grow 18.1% in fiscal 2020. The stock, carrying a Zacks Rank #2, has witnessed 14.3% upward revision in broker ratings over the past four weeks.
Headquartered in Birmingham, AL, Vulcan Materials Company VMC produces and supplies construction materials. Its 2019 earnings are expected to grow 20%. The stock, carrying a Zacks Rank #2, has witnessed 7.7% upward revision in broker ratings over the past four weeks.
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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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Bristol-Myers Squibb Company (BMY) : Free Stock Analysis Report
Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report
Vulcan Materials Company (VMC) : Free Stock Analysis Report
AECOM (ACM) : Free Stock Analysis Report
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