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5 Broker-Loved Stocks to Watch as Easing Inflation Lifts Rate Cut Bets
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It is a well-documented fact that inflation in the United States has been cooling over the past few months. The favorable inflation readings have made market watchers hopeful of a rate cut soon. Lower interest rates bring down borrowing costs, boosting economic growth. Healthy economic data released recently also bode well.
To take advantage of this brightening picture, investors are advised to have broker-favored stocks like AdvanSix (ASIX - Free Report) , Allegiant Travel Company (ALGT - Free Report) , CVR Energy (CVI - Free Report) , Warner Bros. Discovery (WBD - Free Report) and DXC Technology (DXC - Free Report) in their portfolios.
Brokers are believed to be experts in the field of investing and are equipped with a clear insight into the nitty gritty of the investment world. Brokers thoroughly study the publicly available documents and attend conference calls. Since brokers meticulously follow the stocks in their coverage, they revise their earnings estimates after carefully examining the pros and cons of an event for the concerned company. Naturally, their estimate revisions serve as an important pointer regarding the price of a stock.
We have designed a screen based on improving broker recommendations and upward estimate revisions over the last four weeks. Also, since the price/sales ratio is a strong complementary valuation metric, it has also been included. The price/sales ratio takes care of the company’s top line, thereby making the strategy foolproof.
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:
AdvanSix is a diversified chemistry company that produces essential materials for its customers in a wide variety of end markets. The company’s operations are being hurt due to disruption at its Frankford site. Efforts to reward its shareholders, however, bode well.
The Zacks Consensus Estimate for AdvanSix’s 2024 earnings is currently pegged at $1.91 per share, having been revised 27.4% upward over the past 60 days. ASIX’s earnings surpassed estimates in two of the last four quarters (missing the mark in the other two quarters). ASIX currently sports a Zacks Rank #1 (Strong Buy).
Allegiant Travel is gaining from a buoyant air travel demand scenario. Efforts to upgrade its fleet are praiseworthy as well. ALGT aims to end 2024 with a fleet size of 124.
ALGT’s earnings surpassed estimates in three of the last four quarters (missing the mark once). The average beat is 52%. Allegiant currently carries a Zacks Rank #3 (Hold).
Established in 2006, CVR Energy is a holding company primarily involved in renewable energy, petroleum refining, marketing and nitrogen fertilizer manufacturing through its stake in CVR Partners. It is committed to developing renewable biofuels and actively participating in the energy transition to reduce carbon emissions.
CVI beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, missing the mark in the other. The average beat is 56.3%. The company currently carries a Zacks Rank of 3.
Warner Bros. Discovery benefits from impressive streaming subscriber growth driven by an expanding content portfolio. The company’s focus on sports streaming, particularly live sports, is a further tailwind.
WBD currently carries a Zacks Rank #3. The Zacks Consensus Estimate for WBD’s current-quarter earnings implies growth in excess of 100% from the year-ago actuals.
DXC Technology is benefiting from strength in the digital business and partnerships, which is helping it expand in the cloud computing space. DXC Technology is implementing robust cost-saving measures to enhance its financial performance.
Over the past 60 days, the Zacks Consensus Estimate for DXC’s current-quarter earnings has increased by 2.9%. DXC’s earnings surpassed estimates in each of the last four quarters. The average beat is 15.7%. The company currently carries a Zacks Rank #3.
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 Watch as Easing Inflation Lifts Rate Cut Bets
It is a well-documented fact that inflation in the United States has been cooling over the past few months. The favorable inflation readings have made market watchers hopeful of a rate cut soon. Lower interest rates bring down borrowing costs, boosting economic growth. Healthy economic data released recently also bode well.
To take advantage of this brightening picture, investors are advised to have broker-favored stocks like AdvanSix (ASIX - Free Report) , Allegiant Travel Company (ALGT - Free Report) , CVR Energy (CVI - Free Report) , Warner Bros. Discovery (WBD - Free Report) and DXC Technology (DXC - Free Report) in their portfolios.
Brokers are believed to be experts in the field of investing and are equipped with a clear insight into the nitty gritty of the investment world. Brokers thoroughly study the publicly available documents and attend conference calls. Since brokers meticulously follow the stocks in their coverage, they revise their earnings estimates after carefully examining the pros and cons of an event for the concerned company. Naturally, their estimate revisions serve as an important pointer regarding the price of a stock.
We have designed a screen based on improving broker recommendations and upward estimate revisions over the last four weeks. Also, since the price/sales ratio is a strong complementary valuation metric, it has also been included. The price/sales ratio takes care of the company’s top line, thereby making the strategy foolproof.
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:
AdvanSix is a diversified chemistry company that produces essential materials for its customers in a wide variety of end markets. The company’s operations are being hurt due to disruption at its Frankford site. Efforts to reward its shareholders, however, bode well.
The Zacks Consensus Estimate for AdvanSix’s 2024 earnings is currently pegged at $1.91 per share, having been revised 27.4% upward over the past 60 days. ASIX’s earnings surpassed estimates in two of the last four quarters (missing the mark in the other two quarters). ASIX currently sports a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here
Allegiant Travel is gaining from a buoyant air travel demand scenario. Efforts to upgrade its fleet are praiseworthy as well. ALGT aims to end 2024 with a fleet size of 124.
ALGT’s earnings surpassed estimates in three of the last four quarters (missing the mark once). The average beat is 52%. Allegiant currently carries a Zacks Rank #3 (Hold).
Established in 2006, CVR Energy is a holding company primarily involved in renewable energy, petroleum refining, marketing and nitrogen fertilizer manufacturing through its stake in CVR Partners. It is committed to developing renewable biofuels and actively participating in the energy transition to reduce carbon emissions.
CVI beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, missing the mark in the other. The average beat is 56.3%. The company currently carries a Zacks Rank of 3.
Warner Bros. Discovery benefits from impressive streaming subscriber growth driven by an expanding content portfolio. The company’s focus on sports streaming, particularly live sports, is a further tailwind.
WBD currently carries a Zacks Rank #3. The Zacks Consensus Estimate for WBD’s current-quarter earnings implies growth in excess of 100% from the year-ago actuals.
DXC Technology is benefiting from strength in the digital business and partnerships, which is helping it expand in the cloud computing space. DXC Technology is implementing robust cost-saving measures to enhance its financial performance.
Over the past 60 days, the Zacks Consensus Estimate for DXC’s current-quarter earnings has increased by 2.9%. DXC’s earnings surpassed estimates in each of the last four quarters. The average beat is 15.7%. The company currently carries a Zacks Rank #3.
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