It's not an easy task for individual investors to select profitable stocks on their own, given a number of fundamental and technical aspects that need to be considered. This is where expert advice comes in handy.
Since brokers are in direct communication with companies, they have more insight into what's happening. So, following what the majority of brokers are saying about a stock can help you understand its potential easily.
Moreover, brokers analyze fundamentals of the company and place them against the current economic backdrop to figure out how the stock will fare as an investment. Also, they have a deeper understanding of the overall industry and economy.
Specifically, brokers analyze a company's publicly available financial statements, attend conference calls and communicate directly with top management. So, there's extensive research behind the rating of a broker on a company's stock. Naturally, when an broker upgrades a stock, you can easily rely on it.
Nevertheless, it's not right to solely depend on brokers' upgrades to build your investment portfolio. You must also take into consideration certain other factors to ensure strong 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 past 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 of 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 eight stocks that qualified the screening:
Based in Richfield, MN, Best Buy Co., Inc.BBY is a retailer of technology products, services and solutions. Its fiscal 2020 earnings are expected to rise 5.9%. The stock, carrying a Zacks Rank #2, has witnessed 6.3% upward revision in broker ratings over the past four weeks.
TriNet Group, Inc.TNET , headquartered in Dublin, CA, provides human resources solutions for small and midsize businesses. Its earnings growth is expected to be 12.3% in 2019. The stock, sporting a Zacks Rank #1, has witnessed 66.7% upward revision in broker ratings over the past four weeks.
Saia, Inc.SAIA , headquartered in Johns Creek, GA, operates as a transportation company. Its earnings growth is expected to be 16.8% in 2019. The stock, carrying a Zacks Rank #2, has witnessed 10% upward revision in broker ratings over the past four weeks.
The Allstate CorporationALL provides property and casualty, and other insurance products. Earnings for this Northbrook, IL-based company are projected to increase 14.5% for 2019. The stock, carrying a Zacks Rank #2, has witnessed 7.1% upward revision in broker ratings over the past four weeks.
Headquartered in Estero, FL, Hertz Global Holdings, Inc.HTZ provides airport and off airport vehicle rental and leasing services. Its 2019 earnings are expected to surge 232%. The stock, carrying a Zacks Rank #2, has witnessed 20% 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.
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
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.