Selecting stocks from the vast investment universe is not an easy task. For this, one needs to understand the fundamentals of every company and try to place them against the present economic background to figure out how it may fare as an investment.
One way to cut this task out is to follow broker recommendation. Brokers have more insight into what’s happening in a particular company as they directly communicate with company management. Further, they have a deeper understanding of the overall industry.
Specifically, 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.
So, after thorough research, brokers decide to rate that company’s stock. Naturally, when a broker upgrades a stock, one can easily rely on it.
However, solely depending on analysts’ upgrades is not the right way to build investment portfolio. One should also take into consideration other factors to ensure solid returns.
Choosing 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. 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 three of the four stocks that qualified the screening:
Target Corporation TGT, based in Minneapolis, MN, operates as a general merchandise retailer. Its earnings are expected to grow8% in fiscal 2020. The stock, sporting a Zacks Rank #1, has witnessed 5% upward revision in broker ratings over the past four weeks.
Based in Stockholm, Sweden, Telefonaktiebolaget Lm Ericsson ERIC provides information and communications technology solutions for service providers. Its 2019 earnings are expected to surge1166.7%. The stock, sporting a Zacks Rank #1, has witnessed 16.7% upward revision in broker ratings over the past four weeks.
Hub Group, Inc. HUBG, headquartered in Oak Brook, IL, provides intermodal, trucking, truck brokerage, and other logistics services. Its earnings are expected to increase 27.2% in 2019. The stock, carrying a Zacks Rank #2, has witnessed 6.7% 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 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.
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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.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance
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Hub Group, Inc. (HUBG): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.