There are few things as satisfying to an investor as getting
into a stock and seeing it turn into a wonderful uptrend. But if
you didn't get in at the beginning, and are looking for a place to
do so, there are few things as difficult as deciding when and where
to hop in on an existing trend in hopes of seeing it go up even
But a quick glance at the stock's earnings estimate revisions and
Zacks Rank can provide a clear signal when it's opportune to get in
with a high probability of success.
PetSmart, Inc. (
PetSmart is a large-cap growth stock in the Retail Industry. They
are one of the largest pet supply stores in the United States. If
you have a pet, you've likely been in one of their stores at some
point in time.
But you don't have to be a pet owner to love this stock. It's been
in a solid uptrend for several years, returning several hundred
If someone was looking for a place to get in on this uptrend, they
would have gotten their signal on October 21, 2011, as PETM once
again received the coveted Zacks Rank #1 (Strong Buy), suggesting
it would outperform the market over the next 1-3 months. At that
time, it was trading at $47.41 with a 12 Month Forward Earnings
Estimate of $2.79.
But this winner turned into something even bigger. For the next 10
months, its earnings estimates were continuously on the rise, going
from $2.79 to $3.63, while its Zacks Rank successfully predicted
four positive EPS Surprises, culminating in a 49.58% return,
compared to the market's 13.59% over that same time period.
The Zacks Rank is ideal for finding stocks ready to outperform over
the next 1-3 months. But many short-term outperformers, not
surprisingly, turn into longer-term outperformers, giving investors
an opportunity to beat the market over and over again. This makes
sense as companies receiving upward earnings estimate revisions
have a greater tendency of receiving even more upward earnings
estimate revisions. This typically leads to positive EPS surprises,
which in turn leads to more upward earnings estimate revisions,
with higher stock prices to follow.
It's a virtuous cycle that happily repeats itself over and over
again. These types of set-ups are happening all the time, and all
around you. You just need to know where to look. But you need to
look no further than the Zacks #1 Rank.
Click here to find more Zacks Rank #1 stocks.
Disclosure: Performance information for Zacks' portfolios and
strategies are available at:
PETSMART INC (PETM): Free Stock Analysis Report
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