For Immediate Release
Chicago, IL –August 22, 2017 - Stocks in this week’s article include AppFolio, Inc.(NASDAQ:APPF – Free Report), Columbus McKinnon Corporation (NASDAQ:CMCO – Free Report), Concert Pharmaceuticals, Inc. (NASDAQ:CNCE – Free Report), Aceto Corporation (NASDAQ:ACET – Free Report) and Liberty Media Corporation (NASDAQ:FWONA – Free Report).
5 Stocks to Bet on with New Analyst Coverage
As analysts are one of the most important information intermediaries in capital markets, initiation of coverage by them creates value for companies.
It is to be borne in mind that that the lack of consistency in information creates inefficiencies that might result in the interpretation of stocks (over- or under-valued). Thus, initiation of coverage by analysts offers critical information on a stock which is of great value to investors.
Coverage initiation on a stock by analyst(s) usually depicts increased investor inclination. Investors, on their part, often assume that there is something in the stock that has attracted analyst attention. In other words, they believe that the company coming under the radar definitely has some value which can be tapped into.
Obviously, stocks are not arbitrarily chosen to cover. New coverage on a stock usually reflects an encouraging future envisioned by the analyst(s). At times, increased investor focus on a stock motivates analysts to take a closer look at it.
However, we have noticed that the average change in broker recommendation is preferred over a single recommendation change.
Analyst Coverage & Price Movement
Interestingly, the price movement is generally a function of the recommendations from new analysts. Stocks typically see an upward price movement with a new analyst coverage compared to what they witness with a rating upgrade under an existing coverage. Positive recommendations – Buy and Strong Buy – generally lead to a significantly positive price reaction than Hold recommendations. On the contrary, analysts hardly initiate coverage with a Strong Sell or Sell recommendation.
Now, if an analyst issues a new recommendation on a company that has limited or no existing coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.
So, it’s a good strategy to bet on stocks that have seen increased analyst coverage over the last few weeks.
Screening Criteria
Number of Broker Ratings now greater than the Number of Broker Ratings four weeks ago (This will shortlist stocks that have recent new coverage).
Average Broker Rating less than Average Broker Rating four weeks ago ('Less than' means 'better than' four weeks ago).
Increased analyst coverage and improving average rating are the primary criteria of this strategy but one should consider other relevant parameters to make the strategy foolproof.
Here are the other screening parameters:
Price greater than or equal to $5 (as a stock below $5 will not likely create significant interest for most investors).
Average Daily Volume greater than or equal to 100,000 shares (if volume isn’t enough, it will not attract individual investors).
Here are five of the nine stocks that passed the screen:
AppFolio, Inc. (NASDAQ:APPF – Free Report) offers cloud-based software solutions for property management and legal industries. The stock has climbed 72.3% year to date, while the industry gained 16%. This Zacks Rank #1 (Strong Buy) stock has seen earnings estimates move up 113.3% for this year and 50% for the next over the past 30 days. Positive earnings estimate revisions for 2017 and 2018 along with an expected earnings growth rate of 366.7% for 2017 and 39.6% for the next indicate the stock’s potential for price appreciation. The company has a solid average positive earnings surprise of 241.7% for the trailing four quarters.
Columbus McKinnon Corporation (NASDAQ:CMCO – Free Report), a broad-line designer, manufacturer and supplier of sophisticated material handling products and integrated material handling solutions, returned 14.1% year to date, as against its industry’s 2.6% decline. The company surpassed the Zacks Consensus Estimate in two of the past four quarters at an average of 10.70%. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Concert Pharmaceuticals, Inc. (NASDAQ:CNCE – Free Report) is a biopharmaceutical company. This Zacks Rank #3 (Hold) stock has seen earnings estimates move up for this year and the next over the past 30 days. The stock has climbed 38.6%, comparing favorably with the industry’s 3.5% decline so far this year.
Aceto Corporation (NASDAQ:ACET – Free Report) is a small cap distributer of chemical compounds. The stock holds a Zacks Rank #3 and a VGM Score of B. The company has a solid earnings growth rate of 32.9% for the current quarter and 57.1% for the next.
Liberty Media Corporation (NASDAQ:FWONA – Free Report) is engaged in media, communications and entertainment businesses. The stock has outperformed the industry, gaining 4.9% so far this year. The company has a solid average positive earnings surprise of 37.41% for the trailing four quarters.
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here https://at.zacks.com/?id=112
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time!Click here for your free subscription to Profit from the Pros.
Get the full Report on APPF - FREE
Get the full Report on CMCO - FREE
Get the full Report on CNCE - FREE
Get the full Report on ACET - FREE
Get the full Report on FWONA - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/performance
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
Image: Bigstock
Zacks.com featured highlights: AppFolio, Columbus McKinnon, Concert Pharmaceuticals, Aceto and Liberty Media
For Immediate Release
Chicago, IL –August 22, 2017 - Stocks in this week’s article include AppFolio, Inc.(NASDAQ:APPF – Free Report), Columbus McKinnon Corporation (NASDAQ:CMCO – Free Report), Concert Pharmaceuticals, Inc. (NASDAQ:CNCE – Free Report), Aceto Corporation (NASDAQ:ACET – Free Report) and Liberty Media Corporation (NASDAQ:FWONA – Free Report).
5 Stocks to Bet on with New Analyst Coverage
As analysts are one of the most important information intermediaries in capital markets, initiation of coverage by them creates value for companies.
It is to be borne in mind that that the lack of consistency in information creates inefficiencies that might result in the interpretation of stocks (over- or under-valued). Thus, initiation of coverage by analysts offers critical information on a stock which is of great value to investors.
Coverage initiation on a stock by analyst(s) usually depicts increased investor inclination. Investors, on their part, often assume that there is something in the stock that has attracted analyst attention. In other words, they believe that the company coming under the radar definitely has some value which can be tapped into.
Obviously, stocks are not arbitrarily chosen to cover. New coverage on a stock usually reflects an encouraging future envisioned by the analyst(s). At times, increased investor focus on a stock motivates analysts to take a closer look at it.
However, we have noticed that the average change in broker recommendation is preferred over a single recommendation change.
Analyst Coverage & Price Movement
Interestingly, the price movement is generally a function of the recommendations from new analysts. Stocks typically see an upward price movement with a new analyst coverage compared to what they witness with a rating upgrade under an existing coverage. Positive recommendations – Buy and Strong Buy – generally lead to a significantly positive price reaction than Hold recommendations. On the contrary, analysts hardly initiate coverage with a Strong Sell or Sell recommendation.
Now, if an analyst issues a new recommendation on a company that has limited or no existing coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.
So, it’s a good strategy to bet on stocks that have seen increased analyst coverage over the last few weeks.
Screening Criteria
Number of Broker Ratings now greater than the Number of Broker Ratings four weeks ago (This will shortlist stocks that have recent new coverage).
Average Broker Rating less than Average Broker Rating four weeks ago ('Less than' means 'better than' four weeks ago).
Increased analyst coverage and improving average rating are the primary criteria of this strategy but one should consider other relevant parameters to make the strategy foolproof.
Here are the other screening parameters:
Price greater than or equal to $5 (as a stock below $5 will not likely create significant interest for most investors).
Average Daily Volume greater than or equal to 100,000 shares (if volume isn’t enough, it will not attract individual investors).
Here are five of the nine stocks that passed the screen:
AppFolio, Inc. (NASDAQ:APPF – Free Report) offers cloud-based software solutions for property management and legal industries. The stock has climbed 72.3% year to date, while the industry gained 16%. This Zacks Rank #1 (Strong Buy) stock has seen earnings estimates move up 113.3% for this year and 50% for the next over the past 30 days. Positive earnings estimate revisions for 2017 and 2018 along with an expected earnings growth rate of 366.7% for 2017 and 39.6% for the next indicate the stock’s potential for price appreciation. The company has a solid average positive earnings surprise of 241.7% for the trailing four quarters.
Columbus McKinnon Corporation (NASDAQ:CMCO – Free Report), a broad-line designer, manufacturer and supplier of sophisticated material handling products and integrated material handling solutions, returned 14.1% year to date, as against its industry’s 2.6% decline. The company surpassed the Zacks Consensus Estimate in two of the past four quarters at an average of 10.70%. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Concert Pharmaceuticals, Inc. (NASDAQ:CNCE – Free Report) is a biopharmaceutical company. This Zacks Rank #3 (Hold) stock has seen earnings estimates move up for this year and the next over the past 30 days. The stock has climbed 38.6%, comparing favorably with the industry’s 3.5% decline so far this year.
Aceto Corporation (NASDAQ:ACET – Free Report) is a small cap distributer of chemical compounds. The stock holds a Zacks Rank #3 and a VGM Score of B. The company has a solid earnings growth rate of 32.9% for the current quarter and 57.1% for the next.
Liberty Media Corporation (NASDAQ:FWONA – Free Report) is engaged in media, communications and entertainment businesses. The stock has outperformed the industry, gaining 4.9% so far this year. The company has a solid average positive earnings surprise of 37.41% for the trailing four quarters.
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here https://at.zacks.com/?id=112
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time!Click here for your free subscription to Profit from the Pros.
Get the full Report on APPF - FREE
Get the full Report on CMCO - FREE
Get the full Report on CNCE - FREE
Get the full Report on ACET - FREE
Get the full Report on FWONA - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/performance
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.