For Immediate Release
Chicago, IL – October 22, 2019 - Stocks in this week’s article are Asbury Automotive Group ABG, Hub Group HUBG, Core-Mark Holding Company CORE, Murphy USA MUSA and AutoNation AN.
5 Broker Favorite Stocks to Keep an Eye Out For
With the majority of companies yet to report their numbers this reporting cycle, investors would like to add stocks with the potential to surpass earnings expectations. This is because it is a well-known fact that an earnings beat generally leads to stock price appreciation.
However, the million-dollar question is how to pick the potential winners? The task becomes even more difficult when one tries to select a winning portfolio without proper guidance. With a plethora of stocks flooding the market at any point of time, an investor may end up making a wrong choice while designing one’s portfolio in the absence of proper know-how.
Choice of improper stocks can adversely impact returns, thereby ruining the very objective of investing one’s hard-earned money in the highly unpredictable stock market. In a bid to avoid such a scenario, investors usually rely on guidance from proper sources.
Broker Advice – The Way Forward
In the field of investing, brokers are deemed to be experts with thorough knowledge. Brokers, irrespective of their types (sell-side, buy-side or independent), have at their disposal a lot more information on a company and its prospects than individual investors.
To attain their objective, they go through minute details of the publicly available financial documents apart from attending company conference calls and other presentations. Broker opinion should thus act as a valuable guide for investors while deciding their course of action (buy, sell or hold) on a particular stock.
Earnings Estimate Revisions – A Winning Pointer
Since brokers indulge in meticulous research, the question of their actions being arbitrary does not arise. The direction of the estimate revisions serves as an important pointer regarding the price of a stock. In fact, a rating upgrade normally leads to stock price appreciation and vice versa.
Given the expertise of brokers in investment matters, it is natural for investors to believe that there is a solid reason/logic behind their improving the recommendation on a particular stock. Estimates can move north for a number of reasons — favorable earnings performance, a bullish guidance, product launch or any favorable macro scenario.
To take care of the earnings performance, we have designed a screen based on improving analyst recommendation and upward estimate revisions over the last four weeks.
Revenues Performance Not to be Ignored
According to many market watchers, a revenue beat is more creditable for a company than a mere earnings outperformance, especially in an environment of revenue weakness due to macroeconomic headwinds like a strong dollar or lackluster demand for travel (which will hurt travel-focused companies). Therefore, one must take top-line performance into consideration as well while formulating a winning strategy. We have included in our screen the price/sales ratio which serves as a strong complementary valuation metric.
For the rest of this Screen of the Week article please visit Zacks.com at:https://www.zacks.com/stock/news/575659/5-brokerfavorite-stocks-to-watch-out-for
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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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Hub Group, Inc. (HUBG) : Free Stock Analysis Report
AutoNation, Inc. (AN) : Free Stock Analysis Report
Asbury Automotive Group, Inc. (ABG) : Free Stock Analysis Report
Core-Mark Holding Company, Inc. (CORE) : Free Stock Analysis Report
Murphy USA Inc. (MUSA) : Free Stock Analysis Report
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