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5 Broker-Loved Stocks to Keep a Tab On as Inflation Cools
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The southward movement in inflation witnessed since April is certainly a welcome sign. The consumer price index reading for June declined for the first time in more than four years on a month-on-month basis. The easing inflationary pressure has given rise to hopes of a rate cut as early as September.
The AI rally and a good start to the second-quarter earnings season represent further tailwinds. Given this brightening scenario, investors would like to design a winning portfolio of broker-friendly stocks for impressive returns. Brokers are deemed to be experts in the field of investing. Stocks such as American Axle ( (AXL - Free Report) , Dana ( (DAN - Free Report) , AMC Entertainment ( (AMC - Free Report) , Centene (CNC - Free Report) and Archer Daniels (ADM - Free Report) are currently favored by brokers.
We have designed a screen to shortlist stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of broker information, it has been included. The price/sales ratio takes care of the company’s top line, making the strategy a well-rounded one.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of the 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).
Price-to-Sales = Bot%10 (The lower the ratio, the better. Companies meeting this criterion are in the 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:
American Axle is a supplier of driveline and drivetrain systems, modules, and components for the automotive market. American Axle’s efforts to diversify its business, products and customer base are generating impressive results. Optimization of its portfolio via buyouts is enhancing the firm’s position.
The Zacks Consensus Estimate for AXL’s 2024 earnings is currently pegged at 40 cents per share, indicating a 5.3% upward revision over the past 60 days. AXL’s earnings surpassed estimates in three of the last four quarters (missing the mark once). The average beat is 404.7%. American Axle currently sports a Zacks Rank #1 (Strong Buy).
Dana Incorporated is a provider of power-conveyance and energy-management solutions for vehicles and machinery in North America, Europe, South America, and the Asia Pacific. The company is headquartered in Maumee, OH.
DAN currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for DAN’s 2025 earnings has been revised upward over the past 60 days by 32.1%.
AMC Entertainment is benefiting from enhanced food and beverage offerings at concession stands and Dine-In theaters, along with the expansion of theater locations across the United States, Europe and the Middle East.
Shares of this Zacks Rank #3 (Hold) company have gained more than 28% in the past six months. In 2024, the company’s earnings are expected to witness growth of 64.6% from the 2023 actuals.
Centene witnessed an uptick in revenues on strength in the Medicare and Medicaid businesses. A well-diversified healthcare suite and solid nationwide presence have fetched multiple contract wins and deal renewals for CNC. This Zacks Rank #3 health insurer follows an inorganic growth route, which, in turn, bolsters its capabilities and provides an opportunity to boost top-line growth.
The Zacks Consensus Estimate for Centene’s 2024 earnings is currently pegged at $6.80 per share, indicating a 1.8% rise from the year-ago reported figure. CNC’s earnings surpassed estimates in each of the last four quarters, with the average beat being 10.5%.
Archer Daniels is based in Chicago, IL. This agricultural product company’s leadership in critical global trends, such as flexitarian diets, nutrition and sustainable materials, has contributed to its momentum. Its focus on investing in assets and technological capabilities to serve customers efficiently is likely to be a significant growth driver. Solid demand, improved productivity and product innovations have been driving growth of this Zacks Rank #3 company.
The Zacks Consensus Estimate for Archer Daniels’ 2024 earnings has inched up 1.1% in the past 30 days to $5.56 per share. ADM delivered an earnings surprise of 7.9%, on average, in the trailing four quarters. The company has gained 11.1% in the past month.
You can get the rest of the stocks on this list by signing up now for a 2-week free trial to the Research Wizard stock picking and backtesting software. You can also create your own strategies and test them first before making investments.
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.
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5 Broker-Loved Stocks to Keep a Tab On as Inflation Cools
The southward movement in inflation witnessed since April is certainly a welcome sign. The consumer price index reading for June declined for the first time in more than four years on a month-on-month basis. The easing inflationary pressure has given rise to hopes of a rate cut as early as September.
The AI rally and a good start to the second-quarter earnings season represent further tailwinds. Given this brightening scenario, investors would like to design a winning portfolio of broker-friendly stocks for impressive returns. Brokers are deemed to be experts in the field of investing. Stocks such as American Axle ( (AXL - Free Report) , Dana ( (DAN - Free Report) , AMC Entertainment ( (AMC - Free Report) , Centene (CNC - Free Report) and Archer Daniels (ADM - Free Report) are currently favored by brokers.
We have designed a screen to shortlist stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of broker information, it has been included. The price/sales ratio takes care of the company’s top line, making the strategy a well-rounded one.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of the 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).
Price-to-Sales = Bot%10 (The lower the ratio, the better. Companies meeting this criterion are in the 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:
American Axle is a supplier of driveline and drivetrain systems, modules, and components for the automotive market. American Axle’s efforts to diversify its business, products and customer base are generating impressive results. Optimization of its portfolio via buyouts is enhancing the firm’s position.
The Zacks Consensus Estimate for AXL’s 2024 earnings is currently pegged at 40 cents per share, indicating a 5.3% upward revision over the past 60 days. AXL’s earnings surpassed estimates in three of the last four quarters (missing the mark once). The average beat is 404.7%. American Axle currently sports a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here
Dana Incorporated is a provider of power-conveyance and energy-management solutions for vehicles and machinery in North America, Europe, South America, and the Asia Pacific. The company is headquartered in Maumee, OH.
DAN currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for DAN’s 2025 earnings has been revised upward over the past 60 days by 32.1%.
AMC Entertainment is benefiting from enhanced food and beverage offerings at concession stands and Dine-In theaters, along with the expansion of theater locations across the United States, Europe and the Middle East.
Shares of this Zacks Rank #3 (Hold) company have gained more than 28% in the past six months. In 2024, the company’s earnings are expected to witness growth of 64.6% from the 2023 actuals.
Centene witnessed an uptick in revenues on strength in the Medicare and Medicaid businesses. A well-diversified healthcare suite and solid nationwide presence have fetched multiple contract wins and deal renewals for CNC. This Zacks Rank #3 health insurer follows an inorganic growth route, which, in turn, bolsters its capabilities and provides an opportunity to boost top-line growth.
The Zacks Consensus Estimate for Centene’s 2024 earnings is currently pegged at $6.80 per share, indicating a 1.8% rise from the year-ago reported figure. CNC’s earnings surpassed estimates in each of the last four quarters, with the average beat being 10.5%.
Archer Daniels is based in Chicago, IL. This agricultural product company’s leadership in critical global trends, such as flexitarian diets, nutrition and sustainable materials, has contributed to its momentum. Its focus on investing in assets and technological capabilities to serve customers efficiently is likely to be a significant growth driver. Solid demand, improved productivity and product innovations have been driving growth of this Zacks Rank #3 company.
The Zacks Consensus Estimate for Archer Daniels’ 2024 earnings has inched up 1.1% in the past 30 days to $5.56 per share. ADM delivered an earnings surprise of 7.9%, on average, in the trailing four quarters. The company has gained 11.1% in the past month.
You can get the rest of the stocks on this list by signing up now for a 2-week free trial to the Research Wizard stock picking and backtesting software. You can also create your own strategies and test them first before making investments.
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