Since 1988, stocks with a Zacks Rank #1 (Strong Buy) have
generated an average annual return of over 26% a year, nearly
tripling the S&P 500's 9.6% yearly average gain.
But our Zacks Rank #2s (Buys)have also outperformed the market with
an impressive 18.4% average annual return, effectively doubling the
While the list of #1s will be dominated by small and mid-cap
stocks, you'll find a greater number of larger-cap stocks in the #2
This is largely due to the extra difficulty a large-cap stock has
in achieving a high score on the Agreement factor (one of the four
factors that make up the Zacks Rank), which looks at the agreement
of analysts making upward earnings estimate revisions. (The more
analysts covering a stock, the harder it is to see a high
percentage of analysts moving their estimates in the same
For many large-cap stocks, a Zacks Rank #2 can be just as important
in signaling upcoming outperformance as a Zacks Rank #1 can be for
a small-cap stock.
Keep reading to find out how to spot the best Zacks Rank #2s
BlackRock is a large-cap stock in the Finance-Investment Management
industry. They are one of the largest Investment Management firms
in the US, providing products and services to both individual and
institutional investors in the US and internationally.
For anyone looking for a good place to invest at the beginning
2013, they didn't have to look any further than BlackRock itself.
On January 4th, 2013, they garnered a Zacks Rank #2 (Buy), which
signaled that BLK was ready to breakout to the upside.
And breakout they did. Starting at $218.03 when they first became a
Buy, to $271.34 as of 5/3/13 (and still a Buy), BLK has increased
by 24.5% (and still going).
During that time, their 12 Month Forward Earnings Estimate climbed
from $15.04 to $16.66. Staying in on this run couldn't have been
easier, as their earnings estimates literally increased each and
every week for 17 weeks straight, providing all of the incentive
needed to just sit back and watch the stock go.
Further reinforcement came within two weeks of getting in, with a
positive EPS surprise of 5.88% on 1/17/13, and then again, 3 months
later, with another 1.67% positive Surprise on 4/16/13.
BlackRock is a text book example of how a positive Zacks Rank and
upward earnings estimate revisions can get you in on some of the
best stocks on the move.
Fortunately, we see this happen over and over again when using the
Zacks Rank as your guide. Not only on when to buy but also on when
Click here to see more Zacks Rank #1 and #2 stocks
Disclosure: Performance information for Zacks portfolios and
strategies are available at:
BLACKROCK INC (BLK): Free Stock Analysis Report
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