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5 Stocks Favored by Brokers Amid the Current Turbulence
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U.S. stock markets have been gripped by volatility since August after an impressive performance in the first seven months of the year. Inflation remains hot and the related concerns of an economic slowdown have gained ground lately, leading to the turbulence.
Though the Fed did not hike interest rates in September, Fed Chair Jerome Powell said that the fight against inflation is far from over and that at least another quarter percentage interest rate hike would be required in the current year. The recent sharp rise in oil price after Saudi Arabia and Russia extended voluntary supply cuts has also been one of the reasons for the U.S. equity markets’ southward movement observed lately.
However, this uncertain scenario does not mean that investors turn their backs on stocks. In fact, broker-loved stocks like CVR Energy (CVI - Free Report) , Delek US Holdings (DK - Free Report) , Bread Financial (BFH - Free Report) , Dish Network and Cardinal Health (CAH - Free Report) are worth keeping on one’s radar for healthy returns despite this turbulence.
Following Broker Advice Works Wonders
Brokers have an in-depth understanding of stocks, great knowledge of the industry and a grasp over the broader economy. They scrutinize the company’s fundamentals and place them against the prevalent economic scenario to find out how attractive or otherwise a stock is as an investment option.
Only after undertaking thorough research, brokers arrive at their recommendation (buy, sell or hold) on a stock. Such well-researched information is not available to individual investors. So, they, in the absence of proper guidance, may end up selecting wrong stocks in their portfolio. This might result in their hard-earned money, which they have invested in stock markets, going down the drain. To avoid such an unfortunate scenario from materializing, it is highly desirable for investors to be guided by broker advice while deciding their course of action on a particular stock.
Formulating a Winning Portfolio
We have designed a screener to arrive at stocks based on improving analyst recommendations and upward earnings estimate revisions over the last four weeks. However, considering only these factors does not make our strategy foolproof as the top line has not been considered.
According to many market watchers, a top-line outperformance holds more value for a company than an earnings outperformance. To address top-line concerns, we have included the price/sales ratio in our screener. It serves as a strong complementary valuation metric.
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.
To ensure that the strategy is a winning one, covering all bases, we added the following screening parameters:
Price-to-Sales = Bot%10: The lower the ratio the better, companies meeting this criteria are in the bottom 10% of our universe of over 7,700 stocks with respect to this ratio.
Price greater than 5: A stock trading below $5 will not likely create significant interest for most investors.
Average Daily Volume greater than 100,000 shares over the last 20 trading days: Volume has to be significant to ensure that these are easily traded.
Market value ($ mil) = Top #3000: This gives us stocks that are the top 3000 if one judges by market capitalization.
Com/ADR/Canadian= Com: This eliminates the ADR and Canadian stocks.
Here are five of the 10 stocks that passed the screen test:
CVR Energy is an independent refiner and marketer of high-value transportation fuels. CVI is also a producer of ammonia and urea ammonia nitrate fertilizers. CVI's petroleum business includes a full-coking sour crude refinery in Coffeyville, KS. Its efforts to reward its shareholders underline its strong financial position. The robust Nitrogen Fertilizer unit is supporting growth.
CVR Energy, currently sporting a Zacks Rank #1 (Strong Buy), has outshined the Zacks Consensus Estimate in each of the past four quarters, by an average of 28.75%. The Zacks Consensus Estimate for current-year earnings has improved 38.8% over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Brentwood, TN-based Delek US Holdings is an independent refiner, transporter and marketer of petroleum products. DK’s extensive downstream operations within the Permian Basin grant it a fairly significant competitive edge over its peers in the long term.
Delek US Holdings currently carries a Zacks Rank #3 (Hold). DK surpassed the Zacks Consensus Estimate for earnings in three of the past four quarters (missing the mark in the other one).
Based in Columbus, OH, Bread Financial continues to benefit from data-driven marketing strategies. Solid receivables growth in Card Services should drive its top line. Acquisitions and divestitures will aid the company in growing inorganically and expanding its international footprint.
Over the past 60 days, the Zacks Consensus Estimate for BFH’s 2023 earnings has been revised 2.63% upward. Bread Financial currently carries a Zacks Rank #3.
Dish Network is being aided by tailwinds like an extensive portfolio of 5G spectrum and focus on acquiring & retaining subscribers that are profitable over the long term. In second-quarter 2023, Pay-TV’s average monthly revenue per subscriber increased 3.4% year over year to $104.71, driven by DISH TV and SLING TV programming package price increases and higher advertising revenues.
Over the past 60 days, the Zacks Consensus Estimate for DISH’s current-quarter earnings has been revised 20% upward. Dish Networkcurrently carries a Zacks Rank #3.
Ohio-based Cardinal Health is a nationwide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. CAH’s diversified product portfolio bodes well and should drive growth.
Cardinal Health, currently carrying a Zacks Rank of 3, has an impressive surprise history, with its earnings surpassing the Zacks Consensus Estimate in each of the last four quarters, the average being 16.03%.
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 backtest 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 Favored by Brokers Amid the Current Turbulence
U.S. stock markets have been gripped by volatility since August after an impressive performance in the first seven months of the year. Inflation remains hot and the related concerns of an economic slowdown have gained ground lately, leading to the turbulence.
Though the Fed did not hike interest rates in September, Fed Chair Jerome Powell said that the fight against inflation is far from over and that at least another quarter percentage interest rate hike would be required in the current year. The recent sharp rise in oil price after Saudi Arabia and Russia extended voluntary supply cuts has also been one of the reasons for the U.S. equity markets’ southward movement observed lately.
However, this uncertain scenario does not mean that investors turn their backs on stocks. In fact, broker-loved stocks like CVR Energy (CVI - Free Report) , Delek US Holdings (DK - Free Report) , Bread Financial (BFH - Free Report) , Dish Network and Cardinal Health (CAH - Free Report) are worth keeping on one’s radar for healthy returns despite this turbulence.
Following Broker Advice Works Wonders
Brokers have an in-depth understanding of stocks, great knowledge of the industry and a grasp over the broader economy. They scrutinize the company’s fundamentals and place them against the prevalent economic scenario to find out how attractive or otherwise a stock is as an investment option.
Only after undertaking thorough research, brokers arrive at their recommendation (buy, sell or hold) on a stock. Such well-researched information is not available to individual investors. So, they, in the absence of proper guidance, may end up selecting wrong stocks in their portfolio. This might result in their hard-earned money, which they have invested in stock markets, going down the drain. To avoid such an unfortunate scenario from materializing, it is highly desirable for investors to be guided by broker advice while deciding their course of action on a particular stock.
Formulating a Winning Portfolio
We have designed a screener to arrive at stocks based on improving analyst recommendations and upward earnings estimate revisions over the last four weeks. However, considering only these factors does not make our strategy foolproof as the top line has not been considered.
According to many market watchers, a top-line outperformance holds more value for a company than an earnings outperformance. To address top-line concerns, we have included the price/sales ratio in our screener. It serves as a strong complementary valuation metric.
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.
To ensure that the strategy is a winning one, covering all bases, we added the following screening parameters:
Price-to-Sales = Bot%10: The lower the ratio the better, companies meeting this criteria are in the bottom 10% of our universe of over 7,700 stocks with respect to this ratio.
Price greater than 5: A stock trading below $5 will not likely create significant interest for most investors.
Average Daily Volume greater than 100,000 shares over the last 20 trading days: Volume has to be significant to ensure that these are easily traded.
Market value ($ mil) = Top #3000: This gives us stocks that are the top 3000 if one judges by market capitalization.
Com/ADR/Canadian= Com: This eliminates the ADR and Canadian stocks.
Here are five of the 10 stocks that passed the screen test:
CVR Energy is an independent refiner and marketer of high-value transportation fuels. CVI is also a producer of ammonia and urea ammonia nitrate fertilizers. CVI's petroleum business includes a full-coking sour crude refinery in Coffeyville, KS. Its efforts to reward its shareholders underline its strong financial position. The robust Nitrogen Fertilizer unit is supporting growth.
CVR Energy, currently sporting a Zacks Rank #1 (Strong Buy), has outshined the Zacks Consensus Estimate in each of the past four quarters, by an average of 28.75%. The Zacks Consensus Estimate for current-year earnings has improved 38.8% over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Brentwood, TN-based Delek US Holdings is an independent refiner, transporter and marketer of petroleum products. DK’s extensive downstream operations within the Permian Basin grant it a fairly significant competitive edge over its peers in the long term.
Delek US Holdings currently carries a Zacks Rank #3 (Hold). DK surpassed the Zacks Consensus Estimate for earnings in three of the past four quarters (missing the mark in the other one).
Based in Columbus, OH, Bread Financial continues to benefit from data-driven marketing strategies. Solid receivables growth in Card Services should drive its top line. Acquisitions and divestitures will aid the company in growing inorganically and expanding its international footprint.
Over the past 60 days, the Zacks Consensus Estimate for BFH’s 2023 earnings has been revised 2.63% upward. Bread Financial currently carries a Zacks Rank #3.
Dish Network is being aided by tailwinds like an extensive portfolio of 5G spectrum and focus on acquiring & retaining subscribers that are profitable over the long term. In second-quarter 2023, Pay-TV’s average monthly revenue per subscriber increased 3.4% year over year to $104.71, driven by DISH TV and SLING TV programming package price increases and higher advertising revenues.
Over the past 60 days, the Zacks Consensus Estimate for DISH’s current-quarter earnings has been revised 20% upward. Dish Networkcurrently carries a Zacks Rank #3.
Ohio-based Cardinal Health is a nationwide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. CAH’s diversified product portfolio bodes well and should drive growth.
Cardinal Health, currently carrying a Zacks Rank of 3, has an impressive surprise history, with its earnings surpassing the Zacks Consensus Estimate in each of the last four quarters, the average being 16.03%.
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 backtest 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.