With Q1 earnings season in full swing, some investors may get easily carried away by earnings beat and quarterly performances. One may think it's quite an easy task to choose stocks during this time.
Actually, it's the opposite. Just because a company has performed well in a particular quarter, it can't be picked for investment. Thorough research is required before investing in any stock.
For an individual investor, going through financials for each and every company and then deciding which ones to buy can be a daunting task. So here, some expert advice could be helpful. By following broker recommendations, one can find investment worthy stocks.
Brokers have deeper insight into what's happening in a particular company as they directly communicate with management. Also, they have a comprehensive understanding of the overall industry.
Brokers research on a company's publicly available financial statements, listen to conference calls and engage in talks directly with top management. At times, they even talk with customers to gauge what they like or dislike about the products and services offered by the company.
Further, brokers understand the company fundamentals and try to place them against the present economic background to figure out how it may fare as an investment. Hence, after thorough research, brokers decide to rate that particular company's stock. So, when an analyst upgrades a stock, one can easily depend on it.
However, solely depending on analysts' upgrades is not the right way to build an investment portfolio. One should also take into consideration certain other factors 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 (4 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. You can see the complete list of today's Zacks #1 Rank stocks here
. VGM Score equal to A or B:
Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 offer the best upside potential.
Here are five of the six stocks that qualified the screening: MGM Resorts International MGM
, based in Las Vegas, NV, owns and operates integrated casino, hotel, and entertainment resorts. Its fiscal 2019 earnings are expected to rise 6.1%. The stock, carrying a Zacks Rank #2, has witnessed 7.7% upward revision in broker ratings over the past four weeks. Avery Dennison Corporation AVY
, headquartered in Glendale, CA, produces and sells pressure-sensitive materials. Its 2018 earnings are expected to increase 17.6%. The stock, with a Zacks Rank #2, has witnessed 11.1% upward revision in broker ratings over the past four weeks.
Deerfield, IL-based Caterpillar Inc. CAT
manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. The company's earnings are expected to surge 36.3% in 2018. The stock, sporting a Zacks Rank #1, has witnessed 5% upward revision in broker ratings over the past four weeks.
Based in Phoenix, AZ- Avnet, Inc. AVT
distributes electronic components. This Zacks Rank #2 company's earnings are expected to increase 7.4% for the current year. The stock has witnessed 12.5% upward revision in broker ratings over the past four weeks.
Chattanooga, TN-based Covenant Transportation Group, Inc. CVTI
provides truckload transportation and brokerage services. The company's earnings are expected to surge 113.1% in 2018. The stock, carrying a Zacks Rank #2, has witnessed 25% 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 the 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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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Covenant Transportation Group, Inc. (CVTI): Free Stock Analysis Report MGM Resorts International (MGM): Free Stock Analysis Report Avnet, Inc. (AVT): Free Stock Analysis Report Caterpillar Inc. (CAT): Free Stock Analysis Report Avery Dennison Corporation (AVY): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research