Stocks with a Zacks #1 Rank (Strong Buy) have a high probability
of outperforming the market over the next 1-3 months. In fact,
since 1986, a portfolio of Zacks #1 Ranks, have shown an average
annual return of 26% per year, which is nearly triple that of the
This series is meant to
you how the Zacks Rank can get you in and keep you in on the most
Hint: it's all about earnings estimates revisions. (See below.)
Short-Term Trading Example: Brown Shoe Company
Brown Shoe Company
) is a small-cap value stock in the Shoes & Related Apparel
industry that markets footwear in the United States, Canada and
China through their retail stores named Famous Footwear,
Naturalizer and Dr. Scholls, to name a few.
This popular brand-name shoe company quickly became a top
performing stock as it more than tripled the market's return with a
24% gain within three short months.
On June 29, 2012, BWS received a Zacks #1 Rank, distinguishing
itself as a stock poised to outperform. Between 6/29/12 when it was
trading at $12.91 and 9/21/12 when it closed at $16.11, BWS
rewarded investors with a 24.79% gain in just under 3 short months
compared to the market's 7.19%.
During that time, their 12 Month Forward Earnings Estimates
continuously climbed higher from $1.02 to $1.11, producing a
spectacular 433% positive EPS surprise, and marking a path for
higher prices to follow.
In fact, during that entire time, the earnings estimates didn't go
down once, making for a worry free return. As you can see, rising
earnings estimates and rising prices go hand in hand.
And the Zacks Rank makes these stocks easy to find.
Want More of Our Best Recommendations?
Zacks' Executive VP, Steve Reitmeister, knows when key trades are
about to be triggered and which of our experts has the hottest
hand. Then each week he hand-selects the most compelling trades and
serves them up to you in a new program called
Kevin Matras is our world-class research expert who has
developed more than 30 market-beating strategies using the Zacks
Rank. He also directs our service that combines the Zacks Rank with
the best strategies for today's uncertain market, the
BROWN SHOE CO (BWS): Free Stock Analysis Report
To read this article on Zacks.com click here.