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The 50-basis point rate cut by the Federal Reserve last month highlighted its focus on bolstering the job market as inflation cools. The Fed signaled that it will cut the rate by another half a percentage point in the current year. The economy will likely benefit from this significant rate cut as high interest rates raise borrowing costs, escalating the chances of an economic slowdown.
Despite headwinds like the recent port strike and the Middle East tensions, investors would like to design a winning portfolio of broker-loved stocks for impressive returns. Brokers are deemed to be experts in the field of investing. Stocks such as American Airlines (AAL - Free Report) , Alaska Air Group (ALK - Free Report) , Delta Air Lines (DAL - Free Report) , Warner Bros. Discovery (WBD - Free Report) and Centene (CNC - Free Report) should be monitored for the purpose.
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 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 Airlines is based in Fort Worth, TX. The gradual increase in air travel demand (particularly leisure) aids AAL. However, high operating costs are hurting the bottom line.
Alaska Air is based in Seattle, WA. The airline is being aided by the uptick in air travel demand. The carrier’s shareholder-friendly attitude also bodes well.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has been revised 12.5% upward. The Zacks Consensus Estimate for 2025 earnings has been revised 0.3% upward over the same time frame. ALK currently carries a Zacks Rank #3.
Delta is based in Atlanta, GA. The airline is benefiting from increased air travel demand. The carrier’s shareholder-friendly attitude also bodes well.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has been revised 0.3% upward. The Zacks Consensus Estimate for 2025 earnings has been revised 1% upward over the past 60 days. DAL currently carries a Zacks Rank #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 76.5% growth from the year-ago actuals.
Centene boasts an impressive inorganic growth strategy for expanding into new markets. Contract wins are increasing its medical membership base.
CNC surpassed the Zacks Consensus Estimate for earnings in three of the last four quarters (missing the mark in the other quarter). The average beat was 9.6%. 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-Friendly Stocks Worth Watching Currently
The 50-basis point rate cut by the Federal Reserve last month highlighted its focus on bolstering the job market as inflation cools. The Fed signaled that it will cut the rate by another half a percentage point in the current year. The economy will likely benefit from this significant rate cut as high interest rates raise borrowing costs, escalating the chances of an economic slowdown.
Despite headwinds like the recent port strike and the Middle East tensions, investors would like to design a winning portfolio of broker-loved stocks for impressive returns. Brokers are deemed to be experts in the field of investing. Stocks such as American Airlines (AAL - Free Report) , Alaska Air Group (ALK - Free Report) , Delta Air Lines (DAL - Free Report) , Warner Bros. Discovery (WBD - Free Report) and Centene (CNC - Free Report) should be monitored for the purpose.
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 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 Airlines is based in Fort Worth, TX. The gradual increase in air travel demand (particularly leisure) aids AAL. However, high operating costs are hurting the bottom line.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has inched up 0.9%. AAL currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Alaska Air is based in Seattle, WA. The airline is being aided by the uptick in air travel demand. The carrier’s shareholder-friendly attitude also bodes well.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has been revised 12.5% upward. The Zacks Consensus Estimate for 2025 earnings has been revised 0.3% upward over the same time frame. ALK currently carries a Zacks Rank #3.
Delta is based in Atlanta, GA. The airline is benefiting from increased air travel demand. The carrier’s shareholder-friendly attitude also bodes well.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has been revised 0.3% upward. The Zacks Consensus Estimate for 2025 earnings has been revised 1% upward over the past 60 days. DAL currently carries a Zacks Rank #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 76.5% growth from the year-ago actuals.
Centene boasts an impressive inorganic growth strategy for expanding into new markets. Contract wins are increasing its medical membership base.
CNC surpassed the Zacks Consensus Estimate for earnings in three of the last four quarters (missing the mark in the other quarter). The average beat was 9.6%. 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