In a volatile market, a basic fundamental analysis of companies is not enough to select stocks that have the potential to generate solid returns. In such a situation, expert advice is necessary for making the right investment choice.
One could simply follow broker rating upgrades, as they have a deeper insight into stocks, the sectors and the overall economy.
Brokers directly communicate with top management. They also thoroughly study the publicly available documents and attend conference calls. In addition, brokers scrutinize the fundamentals of companies and place them against the current economic backdrop to find out how the stocks will fare as an investment option.
Hence, after thorough research, brokers decide to rate that company’s stock. Naturally, when a broker upgrades a stock, one can easily rely on it.
But solely depending on broker upgrades is not advisable. You must take into consideration a few other factors before adding a stock to your investment portfolio. This way you can 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 six stocks that qualified the screening:
Sonic Automotive, Inc. SAH, based in Charlotte, NC, operates as an automotive retailer. Its earnings are expected to grow 32.2% in 2019. The stock, sporting a Zacks Rank #1, has witnessed 16.7% upward revision in broker ratings over the past four weeks.
Based in Duluth, GA, AGCO Corporation AGCO manufactures and distributes agricultural equipment and related replacement parts. Its 2019 earnings are expected to increase 31.1%. The stock, carrying a Zacks Rank #2, has witnessed 7.7% upward revision in broker ratings over the past four weeks.
NRG Energy, Inc. NRG, headquartered in Princeton, NJ, operates as an energy company. Its earnings are expected to surge58.5% in 2019. The stock, carrying a Zacks Rank #2, has witnessed 25% upward revision in broker ratings over the past four weeks.
Marten Transport, Ltd. MRTN operates as a temperature-sensitive truckload carrier for shippers. The company, based in Mondovi, WI, is expected to witness 12% earnings growth in 2019. The stock, carrying a Zacks Rank #2, has witnessed 25% 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.
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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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Marten Transport, Ltd. (MRTN) : Free Stock Analysis Report
NRG Energy, Inc. (NRG) : Free Stock Analysis Report
Sonic Automotive, Inc. (SAH) : Free Stock Analysis Report
AGCO Corporation (AGCO) : Free Stock Analysis Report
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