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5 Stocks With Upgraded Broker Ratings for Attractive Returns

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·5 min read
In this article:
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It’s not easy for an individual investor to pick stocks on his own and gain from them, given so many fundamental and technical aspects that need to be considered for spotting the potential winners. One easy way to carry out this task is to follow broker recommendations.

Since brokers are in direct communication with companies, they have deeper insight into what’s happening in them. Hence, following what the majority of brokers are saying about a stock can help you understand its potential easily.

Thus, in this regard, stocks like Boston Beer Co. Inc. SAM, Williams-Sonoma, Inc. WSM, Cerner Corporation CERN, PNM Resources PNM and Sonoco Products Co. SON are worth investing in.

Brokers also analyze the fundamentals of the company and place them against the current economic backdrop to figure out how the stock will fare as an investment. Further, they have a deeper understanding of the overall industry and economy.

Precisely, brokers analyze a company’s publicly available financial statements, attend conference calls and communicate directly with top management. They even talk to customers to understand what they like or dislike about the products and services offered by the company.

So, there’s comprehensive research behind the rating of a broker on a company’s stock. Naturally, when a broker upgrades a stock, one can easily rely on it. Yet, it’s not advisable to solely depend on ratings upgrades to build an investment portfolio. One must also take into consideration certain other factors to ensure strong returns.

Selecting the Winning Strategy

We have a screening strategy that will help you 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 the five of 11 stocks that qualified the screening:

Boston, MA-based Boston Beer is one of the largest craft brewers in the United States. SAM produces beer, malt beverages, and cider products at company-owned breweries and under contract.

The company’s earnings estimates for 2022 have moved north by 2.5% over the past 30 days. Boston Beer, currently carrying a Zacks Rank #2, has witnessed a 22.2% upward revision in broker ratings over the past four weeks.

Headquartered in San Francisco, CA, Williams-Sonoma is a multi-channel specialty retailer of premium quality home products. WSM has five brands and each of the brands are operating segments.

Williams-Sonoma’s fiscal 2023 earnings estimates have been revised upward by almost 1% over the past month. The stock, sporting a Zacks Rank #1 at present, has witnessed a 5.3% upward revision in broker ratings over the past four weeks.

Cerner provides healthcare information technology solutions worldwide. CERN offers software and hardware solutions that give healthcare providers secure access to clinical, administrative and financial data in a short time.

This North Kansas City, MO-based company’s earnings estimates for 2022 have moved marginally upward over the past month. Cerner, which currently carries a Zacks Rank #2, has witnessed a 6.3% upward revision in broker ratings over the past four weeks.

PNM Resources, based in Albuquerque, NM, is engaged in the distribution of energy and energy-related businesses in the United States. PNM operates through two segments — Public Service Company of New Mexico and Texas-New Mexico Power Company.

The company’s earnings estimates for 2022 have moved north by 4.8% over the past 30 days. PNM Resources, currently carrying a Zacks Rank #2, has witnessed a 20% upward revision in broker ratings over the past four weeks.

Hartsville, SC-based Sonoco is a leading provider of consumer packaging, industrial products, protective packaging and packaging supply chain services. SON manufactures paperboard, primarily from recycled materials, for both internal use and open market sale.

Sonoco’s earnings estimates for 2022 have been revised upward by nearly 1% over the past month. The stock, carrying a Zacks Rank #2 at present, has witnessed a 14.3% 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.

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


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Cerner Corporation (CERN) : Free Stock Analysis Report
 
Sonoco Products Company (SON) : Free Stock Analysis Report
 
WilliamsSonoma, Inc. (WSM) : Free Stock Analysis Report
 
PNM Resources, Inc. (PNM) : Free Stock Analysis Report
 
The Boston Beer Company, Inc. (SAM) : Free Stock Analysis Report
 
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