For Immediate Release
Chicago, IL - Feb 1, 2018 - Stocks in this week's article include: Enterprise Financial Services Corp EFSC , LCI Industries LCII , Simpson Manufacturing Co., Inc. SSD and Synlogic, Inc. SYBX .
Screen of the Week of Zacks Investment Research:
New Analyst Coverage Puts the Spotlight on These 4 Stocks
Most investors bank on research done by analysts to avoid inefficiencies triggered by lack of information. When it comes to coverage initiation, analysts naturally play a pivotal role.
Coverage initiation by analyst(s) on a stock usually portrays higher investor inclination. Investors, on their part, often assume there is something special in a stock to attract analysts' attention. In other words, they believe that the company coming under the microscope definitely has some value.
Obviously, stocks are not randomly chosen to cover. New coverage on a stock usually reflects a reassuring future envisioned by the analyst(s). At times, increased investors' focus on a stock motivates analysts to take a closer look at it. After all, who doesn't love to produce something that is already in demand? Hence, we often find that analysts' ratings on newly-added stocks are more favorable than their ratings on continuously covered stocks.
Needless to say, the average change in broker recommendation is preferred over a single recommendation change.
Influence on Stock Price
The price movement of a stock is generally a function of the recommendations on it from new analysts. Stocks typically see an upward price movement with a new analyst coverage compared to what they witness with a rating upgrade under an existing coverage. Positive recommendations - Buy and Strong Buy - generally lead to a significantly positive price reaction than Hold recommendations. On the contrary, analysts hardly initiate coverage with a Strong Sell or Sell recommendation.
Now, if an analyst gives a new recommendation on a company that has very few or no existing coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.
So, it's a good strategy to bet on stocks that have seen increased analyst coverage over the last few weeks.
And that's what we're screening for today…
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/290698/new-analyst-coverage-puts-the-spotlight-on-these-4-stocks
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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.
About Screen of the Week
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Strong Stocks that Should Be in the News
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Contact: Jim Giaquinto
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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 Enterprise Financial Services Corporation (EFSC): Free Stock Analysis Report Simpson Manufacturing Company, Inc. (SSD): Free Stock Analysis Report Mirna Therapeutics, Inc. (SYBX): Free Stock Analysis Report LCI Industries (LCII): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research