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For an individual investor, going through financials for each and every company and then deciding which stocks to buy is not an easy task. Therefore, some expert advice is always helpful. By following broker recommendations, one can easily find investment-worthy stocks.
Brokers have deeper insight into what's happening in a particular company as they directly communicate with management. They research on the company's publicly available financial statements and also attend conference calls.
At times, they even talk with customers to gauge what they like or dislike about the products and services offered by the company.
Also, brokers have a comprehensive understanding of the overall industry. They understand the company fundamentals and try to place them against the present macroeconomic backdrop to better understand how it may fare as an investment option.
So, after thorough research, brokers decide to rate that particular company's stock. So, when an analyst upgrades a stock, investors can easily depend on it.
But just relying on brokers' ratings is not the correct method to build an investment portfolio. One should take into consideration certain other factors as well to ensure robust returns.
Picking the Winning Strategy
We have a screening strategy that will help in your search for potential winners:
Broker Rating Upgrades (four weeks) of 1% or more: The screen selects stocks that have witnessed broker rating upgrades of 1% or more over the last four weeks.
Current Price greater than 5: The stocks must be trading above $5.
Average 20-day Volume greater than 100,000: A large trading volume guarantees that the stock is easily tradable.
Zacks Rank equal to #1 or 2: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) or #2 (Buy) have a proven record of success.
VGM Score of A: Our research shows that stocks with a VGM Score of A when combined with a Zacks Rank #1 or 2 offer the best upside potential.
Here are five of the 14 stocks that qualified the screening:
Brinker International, Inc. (NYSE: EAT ), based in Dallas, TX, owns, develops, operates and franchises casual dining restaurants. Its fiscal 2018 earnings are expected to rise 10%. The stock, carrying a Zacks Rank #2, has witnessed 7.1% upward revision in broker ratings over the past four weeks.
Dollar General Corp. (NYSE: DG ), headquartered in Goodlettsville, TN, is a discount retailer and provides various merchandise products. Its fiscal 2019 earnings are expected to increase 33.9%. The stock, with a Zacks Rank #2, has witnessed 5.3% upward revision in broker ratings over the past four weeks.
Fort Mill, SC-based Domtar Corp (NYSE: UFS ) designs, manufactures, markets and distributes various communication papers, specialty and packaging papers, and absorbent hygiene products. The company's earnings are expected to jump 26.2% in 2018. The stock, sporting a Zacks Rank #1, has witnessed 9.1% upward revision in broker ratings over the past four weeks.
Based in Sugar Land, TX- CVR Refining LP (NYSE: CVRR ) is as an independent petroleum refiner and marketer of transportation fuels. This Zacks Rank #1 company's earnings are expected to surge a whopping 246.7% for the current year. The stock has witnessed 20% upward revision in broker ratings over the past four weeks.
Dallas, TX-based Jacobs Engineering Group Inc (NYSE: JEC ) provides technical, professional, and construction services. The company's earnings are expected to surge 31.5% in fiscal 2018. The stock, carrying a Zacks Rank #2, has witnessed 7.7% upward revision in broker ratings over the past four weeks.
Get the rest of the stocks on the list and start putting this and other ideas to test. It can all be done with the Research Wizard stock picking and backtesting software.
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
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