Selecting stocks is easy when the market is either bullish or bearish (though the latter is comparatively tougher than the former). However, the same can’t be said when the markets are as volatile as they are now. Picking the right stocks in a volatile market is actually a tall order.
So, it is wise to depend on expert advice. One way to do this is to follow broker recommendations. They have a better understanding of stocks, deeper industry knowledge and a grasp over the economy at large.
Brokers analyze the company’s publicly available documents, go to conference calls and are in direct communication with top management. Also, they talk to customers to understand what they like or dislike about the products and services offered by the company.
Hence, there’s an all-inclusive research behind the rating of a broker on a company’s stock. By following what the majority of brokers are saying about a stock can help you gauge its potential. Naturally, when an analyst upgrades a stock, you can easily rely on it.
Arguably, it’s not the right thing to depend solely on brokers’ upgrades to build your portfolio. You must also take into consideration other factors to ensure strong returns.
Selecting 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 three of the 10 stocks that qualified the screening:
CF Industries Holdings, Inc. CF, based in Deerfield, IL, manufactures and distributes nitrogen fertilizers and other nitrogen products. Its earnings are expected to grow 71.8% in 2019. The stock, carrying a Zacks Rank #2, has witnessed 10% upward revision in broker ratings over the past four weeks.
Based in Henderson, NV, PaySign, Inc. PAYS provides prepaid card programs and processing services. Its earnings are expected to surge 177.8% in 2019. The stock, carrying a Zacks Rank #2, has witnessed 25% upward revision in broker ratings over the past four weeks.
Hertz Global Holdings, Inc. HTZ, headquartered in Estero, FL, offers airport and off airport vehicle rental and leasing services. Its earnings are expected to soar 723.5% in 2019. The stock, carrying a Zacks Rank #2, has witnessed 20% 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.
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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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Hertz Global Holdings, Inc (HTZ) : Free Stock Analysis Report
CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report
3PEA international, Inc. (PAYS) : Free Stock Analysis Report
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