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Stocks to Invest In Based on Top-Down Analysis, Zacks Heat Maps

Parth Panchal

Utilizing the Zacks Sector and Industry Rank Heat Map is a great investing tool for investors, and today, I’m going to recommend a few stocks based on these maps by implementing top-down analysis.

To quickly recap, top-down analysis is a popular method of investing that begins with a macro view of the economy and then narrows down to equity investments. The Zacks Heat Map is a tool that helps make this process much easier than it sounds.

As of April 8, 2017, the Zacks Heat Map shows that the top three sectors in Zacks Sector Rank are Industrial Products with 216 stocks, Basic Materials with 250 stocks, and Auto, Tires & Trucks with 79 stocks. This is my macro view of the economy. Since I now know which sectors I am bullish on, I can dig into each industry rank within those sectors.

To continue narrowing down my equity investment opportunities, I will look into Industrial Products’ industries. It looks like the Manufacturing – General Industrial Industry with 37 stocks is among the best ranked industries within the Industrial Products Sector.

When looking deeper into the industry, it’s seen under the “Rank of Stocks” on the industry page that the top rated stocks in the industry are Altra Industrial Motion Corp. AIMC with a Zacks Rank #2 (Buy), Graco Inc. GGG with a Zacks Rank #2 (Buy), and Nordson Corporation NDSN with a Zacks Rank #2 (Buy).

In summary, I used Zacks Sector Rank Heat Map to find my macro view of the economy. I answered the following question: What parts of the economy are ranked the highest according to Zacks Sector Rank? From there, I found that Industrial Products, Basic Materials, and Auto, Tires & Trucks were ranked among the best.

When I got my picture of the macro economy, I dug deeper to find opportunities within the industries of the sectors I am bullish on. To do this, I utilized Zacks Industry Rank Heat Map and figured that the Manufacturing – General Industry within the Industrial Products Sector was ranked among the highest.

From that second step, I finally narrowed down to a handful of equity investments from the industry page’s “Rank of Stocks” section.

Top-down analysis is an impactful and organized way to approach Wall Street. Zacks Heat Maps and the Sector and Industry Ranks make top-down analysis simple. These features are available through Zacks Premium. Begin your free trial here! 

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Graco Inc. (GGG): Free Stock Analysis Report
Nordson Corporation (NDSN): Free Stock Analysis Report
Altra Industrial Motion Corp. (AIMC): Free Stock Analysis Report
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