Basic fundamental analysis is always not enough to zero in on stocks that have the potential to generate solid returns. In such a situation, expert advice helps investors make the right choice. One could simply follow broker rating upgrades, as they have a deeper insight into stocks, sectors and the overall economy.
Moreover, brokers directly communicate with the 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, by following broker rating upgrades, one can easily find attractive stocks.
But solely depending on broker upgrades is not advisable. One must take into consideration a few other factors before adding a stock to investment portfolio. This way one can ensure steady 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 five of the eight stocks that qualified the screening:
Brinker International, Inc. EAT, based in Dallas, TX, owns, develops, operates and franchises casual dining restaurants. Its earnings are expected to grow 12.3% in fiscal 2019. The stock, carrying a Zacks Rank #2, has witnessed 12.5% upward revision in broker ratings over the past four weeks.
Based in Charlotte, NC, Sonic Automotive, Inc. SAH operates as an automotive retailer. Its 2019 earnings are expected to improve 17%. The stock, sporting a Zacks Rank #1, has witnessed 20% upward revision in broker ratings over the past four weeks.
Molina Healthcare, Inc MOH, headquartered in Long Beach, CA, is a multi-state healthcare organization, which provides managed health care services. Its earnings are expected to increase 3% in 2019. The stock, sporting a Zacks Rank #1, has witnessed 7.7% upward revision in broker ratings over the past four weeks.
Headquartered in Cincinnati, OH, American Financial Group, Inc. AFG is an insurance holding company, which offers property and casualty insurance products. Its earnings are expected to rise 3.2% in 2019. The stock, carrying a Zacks Rank #2, has witnessed 20% upward revision in broker ratings over the past four weeks.
Invitation Homes Inc. INVH is a leading owner and operator of single family rental homes. Earnings for this Dallas, TX-based are expected to surge 443.5% in 2019. The stock, carrying a Zacks Rank #2, has witnessed 11.1% 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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Sonic Automotive, Inc. (SAH) : Free Stock Analysis Report
American Financial Group, Inc. (AFG) : Free Stock Analysis Report
Molina Healthcare, Inc (MOH) : Free Stock Analysis Report
Brinker International, Inc. (EAT) : Free Stock Analysis Report
Invitation Home Inc. (INVH) : Free Stock Analysis Report
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