We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
It is a no-brainer that the primary aim of investors at the time of designing their portfolio of stocks is to rake in handsome returns. Investors, after all, are putting in their hard-earned money into the stock market and would not like to see the same going down the drain under any circumstances, particularly in the current uncertainty-fraught scenario.
However, the task of building a winning portfolio of stocks is no cakewalk. In fact, with a deluge of stocks flooding the market at any point of time, the exercise seems cumbersome. It is akin to ‘searching for a needle in a haystack’, particularly in the absence of proper guidance from experts in the field of investing.
Who are the Experts & Why?
The “experts” are brokers who are equipped with detailed knowledge about the space. 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.
As brokers closely follow the stocks in their coverage in detail and revise earnings estimates only after carefully examining the pros and cons of an event for the concerned company, the question of their action being arbitrary does not arise. In fact, a rating upgrade or downgrade by brokers has the potential to influence the price of the stock.
Naturally, when investors see brokers revising their estimates or recommending a stock, they often assume that there is something valuable in the stock that attracted analyst attention. In fact, a rating upgrade generally leads to stock price appreciation. Similarly, the price of a stock may plummet following a rating downgrade.
Don’t Ignore the Top line
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. To take care of the top line, we considered the price/sales ratio for screening stocks.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks).
% change in Q (1) est. (4 weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter).
We also added the following screening parameters to ensure that the strategy is a winning one:
Price-to-Sales = Bot%10 (The lower the ratio the better, companies meeting this criteria are in bottom 10% of our universe of over 7,700 stocks with respect to this ratio).
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com(This takes out the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
Denver, CO-based Antero Resources Corporation (AR - Free Report) is an independent explorer, primarily engaged in the acquisition and development of natural gas, natural gas liquids and oil resources in the Appalachian Basin. Over the past 60 days, the Zacks Consensus Estimate for this currently Zacks Rank #2 (Buy) company has skyrocketed more than 100% to 41 cents for first-quarter 2021. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Findlay, OH-based Marathon Petroleum Corporation (MPC - Free Report) is a leading independent refiner, transporter and marketer of petroleum products. Earnings of this currently Zacks #2 Ranked stock outpaced the Zacks Consensus Estimate in each of the last four quarters, the average being 34.6%.
San Antonio, TX-based Valero Energy Corporation (VLO - Free Report) is the largest independent refiner and marketer of petroleum products in the United States. The Zacks Consensus Estimate for this presently Zacks Rank #3 (Hold) player’s current-year earnings has increased 76.4% to 97 cents per share over the past 60 days.
Headquartered in Houston, TX, ConocoPhillips (COP - Free Report) , currently sporting a Zacks Rank #1, is primarily involved in the exploration and production of oil and natural gas. Considering proved reserves and production, the company is the largest explorer and producer in the world. The Zacks Consensus Estimate for current-year earnings has been revised 69.4% upward over the past 60 days.
Bloomin' Brands (BLMN - Free Report) owns and operates casual, upscale casual and fine-dining restaurants in the United States and internationally. The company is currently Zacks #3 Ranked. Its earnings outshined the Zacks Consensus Estimate in three of the last four quarters (delivering in-line earnings in the remaining one), the average beat being 57.2%.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
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.
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.
Image: Bigstock
5 Stocks Prospering on Recent Upgrade by Brokers
It is a no-brainer that the primary aim of investors at the time of designing their portfolio of stocks is to rake in handsome returns. Investors, after all, are putting in their hard-earned money into the stock market and would not like to see the same going down the drain under any circumstances, particularly in the current uncertainty-fraught scenario.
However, the task of building a winning portfolio of stocks is no cakewalk. In fact, with a deluge of stocks flooding the market at any point of time, the exercise seems cumbersome. It is akin to ‘searching for a needle in a haystack’, particularly in the absence of proper guidance from experts in the field of investing.
Who are the Experts & Why?
The “experts” are brokers who are equipped with detailed knowledge about the space. 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.
As brokers closely follow the stocks in their coverage in detail and revise earnings estimates only after carefully examining the pros and cons of an event for the concerned company, the question of their action being arbitrary does not arise. In fact, a rating upgrade or downgrade by brokers has the potential to influence the price of the stock.
Naturally, when investors see brokers revising their estimates or recommending a stock, they often assume that there is something valuable in the stock that attracted analyst attention. In fact, a rating upgrade generally leads to stock price appreciation. Similarly, the price of a stock may plummet following a rating downgrade.
Don’t Ignore the Top line
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. To take care of the top line, we considered the price/sales ratio for screening stocks.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks).
% change in Q (1) est. (4 weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter).
We also added the following screening parameters to ensure that the strategy is a winning one:
Price-to-Sales = Bot%10 (The lower the ratio the better, companies meeting this criteria are in bottom 10% of our universe of over 7,700 stocks with respect to this ratio).
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com(This takes out the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
Denver, CO-based Antero Resources Corporation (AR - Free Report) is an independent explorer, primarily engaged in the acquisition and development of natural gas, natural gas liquids and oil resources in the Appalachian Basin. Over the past 60 days, the Zacks Consensus Estimate for this currently Zacks Rank #2 (Buy) company has skyrocketed more than 100% to 41 cents for first-quarter 2021. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Findlay, OH-based Marathon Petroleum Corporation (MPC - Free Report) is a leading independent refiner, transporter and marketer of petroleum products. Earnings of this currently Zacks #2 Ranked stock outpaced the Zacks Consensus Estimate in each of the last four quarters, the average being 34.6%.
San Antonio, TX-based Valero Energy Corporation (VLO - Free Report) is the largest independent refiner and marketer of petroleum products in the United States. The Zacks Consensus Estimate for this presently Zacks Rank #3 (Hold) player’s current-year earnings has increased 76.4% to 97 cents per share over the past 60 days.
Headquartered in Houston, TX, ConocoPhillips (COP - Free Report) , currently sporting a Zacks Rank #1, is primarily involved in the exploration and production of oil and natural gas. Considering proved reserves and production, the company is the largest explorer and producer in the world. The Zacks Consensus Estimate for current-year earnings has been revised 69.4% upward over the past 60 days.
Bloomin' Brands (BLMN - Free Report) owns and operates casual, upscale casual and fine-dining restaurants in the United States and internationally. The company is currently Zacks #3 Ranked. Its earnings outshined the Zacks Consensus Estimate in three of the last four quarters (delivering in-line earnings in the remaining one), the average beat being 57.2%.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
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.
Click here to sign up for a free trial to the Research Wizard today.
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.