For Immediate Release
Chicago, IL – September 17, 2019 - Stocks in this week’s article are Anixter International AXE, CVS Health CVS, AmerisourceBergen ABC, AECOM ACM and Best Buy Company BBY.
5 Stocks in the Limelight After Recent Broker Upgrades
Broker ratings are often the decisive factor behind investment decisions. Arriving at such decisions is by no means easy for individual investors as these involve picking the right stocks from diverse industries. In fact, the process is as demanding as spotting a needle in a haystack, especially if the investor is unaided.
This is where guidance from brokers comes into play. Of the three types of brokers/analysts (sell-side, buy-side and independent), sell-side analysts dominate the investment world. Various brokerage firms employ them to provide unbiased opinion to investors after thorough analysis. Buy-side analysts are employed by hedge funds, mutual funds, and others while the independent ones simply sell their reports to investors.
Brokers not only scrutinize the publicly available financial documents but also attend company conference calls and other presentations. Naturally, it is in the best interest of investors to pay heed to such well-researched information as they aim to rake in maximum returns from their portfolio.
Earnings Estimate Revisions – A Winning Pointer
Since the action of brokers is guided by sound logic, the direction of estimate revisions serves as an important pointer regarding the price of a stock. For example, an earnings beat by a company generally leads to upward estimate revisions with prices moving north. Similarly, a stock may fall out of analysts’ favor due to adverse events like pipeline failure (for a biotech player). Trimming of earnings estimates by brokers often leads to stock price depreciation. Naturally, investors look to dump such stocks on the basis of broker advice.
One of the well-accepted investment strategies is to maintain a diversified portfolio to generate handsome returns irrespective of the market conditions. For instance, in the face of extremely low oil prices, analysts adopt a bullish stance on airline stocks and consequently raise estimates. Naturally, adding such stocks to one’s portfolio in such a scenario might prove to be a winning strategy.
Making the Most of Broker Opinions
The above write-up clearly suggests that by following broker actions, one can arrive at a winning portfolio of stocks. Keeping this in mind, we have designed a screen to shortlist stocks based on improving analyst recommendation and upward revisions to earnings estimates over the last four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of analyst information, it has been included. The price/sales ratio takes care of the company’s top line, making the strategy foolproof.
For the rest of this Screen of the Week article please visit Zacks.com at:https://www.zacks.com/stock/news/521060/5-stocks-in-the-limelight-after-recent-broker-rating-upgrade
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.
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Anixter International Inc. (AXE) : Free Stock Analysis Report
AECOM (ACM) : Free Stock Analysis Report
Best Buy Co., Inc. (BBY) : Free Stock Analysis Report
CVS Health Corporation (CVS) : Free Stock Analysis Report
AmerisourceBergen Corporation (ABC) : Free Stock Analysis Report
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