Zacks.com highlights: Archer Daniels Midland, Dillard's, Delek US Holdings, Bunge and Beazer Homes USA
For Immediate Release
Chicago, IL – August 22, 2018 - Stocks in this week’s article include: Archer Daniels Midland Company ADM, Dillard's Inc. DDS, Delek US Holdings, Inc. DK, Bunge Limited BG and Beazer Homes USA, Inc. BZH.
Screen of the Week of Zacks Investment Research:
5 Stocks in the Limelight After Recent Broker Rating Upgrades
The second-quarter reporting cycle, which is almost over, has unveiled an extremely rosy picture. With only a handful of companies left to report, the season is expected to end on a high, displaying significant earnings growth. Apart from recording bottom-line growth on a year-over-basis, a high proportion of companies have reported better-than-expected earnings per share.
Generally, earnings beat leads to stock price appreciation. Given this favorable background, investors like to add outperformers to their portfolios as they strive to design a portfolio of stocks that will fetch them handsome returns.
However, the task is easier said than done. This is because the investing world is fraught with uncertainties and stock prices are sensitive to recent developments. Additionally, the same group of stocks may not work under all circumstances.
For example, airline stocks may benefit from declining oil prices but may fall out of favor in the event of oil prices moving up. One of the well-accepted strategies to brave market uncertainties is to maintain a well-diversified (i.e. include stocks from different industries) portfolio.
What Is the Way Forward?
Given this backdrop, it is in the best interest of investors to seek guidance from “experts in the field”. The concerned experts are brokers. The opinion of brokers acts as a valuable guide for investors while deciding their course of action (buy, sell or hold) on a particular stock. Broker ratings are backed by sound logic. They have deeper insight into the happenings of a particular company as they directly communicate with management.
They undertake extensive research on the company’s publicly available financial statements apart from attending conference calls. In a bid to deepen their understanding of a particular stock, they sometimes converse with customers to find out their likes/dislikes about the products and services offered by the company.
In view of their expertise, it is prudent for investors to pay heed to broker advice while formulating their investment strategy. Of the three types of brokers/analysts (sell-side, buy-side and independent) present in the investment world, sell-side analysts are most common. Various brokerage firms employ them to provide unbiased opinion to investors after thorough research. Buy-side analysts are employed by hedge funds, mutual funds etc. while the independent ones simply sell their reports to investors.
Earnings Estimate Revisions – An Useful Guide
As indicated above, brokers follow stocks in their coverage minutely. They revise their earnings estimates on a stock after carefully examining the pros and cons of an event for the concerned company. All the decisions by brokers are backed by solid logic or justification and thus estimate revisions serve as an important pointer regarding the price of a stock.
For instance, an earnings outperformance by a company generally leads to upward estimate revisions with prices moving north. Similarly, lackluster bottom line results often lead to stock price depreciation. Investors tend to be guided by the direction of estimate revisions and stock price while formulating their investment strategy. 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.
Revenue Performance Not to be Ignored
While we have talked about the bottom line in detail, the revenue performance should not be overlooked. Actually, according to many market watchers a revenue beat is more creditable for a company than a mere earnings outperformance.
To address top-line concerns, we have included in our screen the price/sales ratio, which serves as a strong complementary valuation metric.
And that's what we're screening for today…
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/318772/5-stocks-in-the-limelight-after-recent-broker-rating-upgrade
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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.
About Screen of the Week
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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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Beazer Homes USA, Inc. (BZH) : Free Stock Analysis Report
Delek US Holdings, Inc. (DK) : Free Stock Analysis Report
Dillard's, Inc. (DDS) : Free Stock Analysis Report
Archer Daniels Midland Company (ADM) : Free Stock Analysis Report
Bunge Limited (BG) : Free Stock Analysis Report
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