Picking stocks from the vast investment universe is not an easy task. For this, one has to understand the fundamentals of every company and try to place them against the current economic background to figure out how it may fare as an investment.
One way to accomplish this task is to follow broker recommendation. Brokers have more insight into what’s happening in a particular company as they directly communicate with management. Also, they have deeper understanding of the overall industry.
Specifically, brokers research on a company’s publicly available financial statements, listen to conference calls and engage in talks directly with the top management. At times, they even talk with customers to gauge what they like or dislike about the products and services offered by the company.
So, it is only after thorough research that brokers decide to rate a particular company’s stock. Naturally, when an analyst upgrades a stock, one can easily rely on it.
However, solely depending on analysts’ upgrades is not the right way to build investment portfolio. One should also take into consideration other factors to ensure solid 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: Our research shows that stocks with a VGM Score of A when combined with a Zacks Rank #1 or 2 offer the best upside potential.
Here are five of the 11 stocks that made it through the screen:
Freeport-McMoRan Inc (NYSE:FCX), headquartered in Phoenix, AZ, is engaged in the mining of mineral properties. Its 2017 earnings are expected to increase 373.9%. The stock has witnessed 6.7% upward revision in broker ratings over the past four weeks.
Based in Zeeland, MI, Herman Miller, Inc. (NASDAQ:MLHR) is engaged in the research, design, manufacture, and distribution of office furniture systems, seating products, other freestanding furniture elements, textiles, home furnishings, and related services. The company’s earnings are expected to increase 8.8% for fiscal 2018. The stock has witnessed 33.3% upward revision in broker ratings over the past four weeks.
Headquartered in Spokane, WA, Potlatch Corporation (NASDAQ:PCH) is a real estate investment trust (REIT) company. The company’s earnings are expected to rise 106% in 2017. The stock has witnessed 16.7% upward revision in broker ratings over the past four weeks.
Akron, OH-based Myers Industries, Inc. (NYSE:MYE) manufactures and sells polymer products. The company’s earnings are expected to increase 11.4% in 2017. The stock has witnessed 50% upward revision in broker ratings over the past four weeks.
Varex Imaging Corp (NASDAQ:VREX), headquartered in Salt Lake, UT, designs and manufactures medical X-ray tubes and image processing solutions. Its fiscal 2018 earnings are expected to increase 6.7%. The stock has witnessed 33.3% upward revision in broker ratings over the past four weeks.
Get the remaining 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.
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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