Stock Picking Ideas from Economic Reports - Screen of the Week
Every week the government and other entities release economic reports that cover all areas of the economy; from retail sales to housing, to international trade and consumer sentiment.
In fact, on virtually any given day there could be anywhere from one to a handful of reports.
And while the financial media does cover them, they usually focus on headline numbers without doing a deeper dive.
This is unfortunate because within these reports often exists money making details that can quickly be uncovered with just an extra few minutes of reading.
For example: in the Employment Situation report, it details which sectors saw the most new jobs, or labor force expansion, and which ones contracted.
For further example, when construction jobs were on the rise last year and populating this report over and over again - investors were alerted to the housing recovery. But the headline number and the obligatory one-or-two-sentence write ups on many news sites missed the best part of the story by not going the extra mile (or paragraph).
Well here we are again, with more stock picking insight straight from last week's Employment Situation report. Last week it showed that some of the biggest job creation came from these five industries:
1) Professional and Business Services
4) Manufacturing (particularly food and motor vehicle and parts)
5) Retail Trade
I like this report for stock picking because if an industry is hiring lots of new people, then that must mean there's lots of new activity to warrant it. And business activity usually means more money and profits for those companies and their stocks.
Once these reports point you in the right direction, you can then plug in the appropriate sectors and industries to capitalize on this information and find the best stocks within those groups.
In another article I'll go over some winning ways to do top-down analysis to zero in on the best stocks within a larger group.
But for now, once you uncover these not so hidden clues, go to any screener and locate the sector or industry of interest. Then consider looking for a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy); market beating growth rates; below industry valuations; and upward earnings estimate revisions.
Here are 5 stocks from some of the sectors singled out as the biggest job creators in last week's Employment report:
TW Towers Watson
(Professional and Business Services)
SWFT Swift Transportation
MPAA Motorcar Parts
(Manufacturing -- motor vehicle and parts)
TSCO Tractor Supply Co.
Profitable stock ideas can come at any time and any place. But instead of waiting for the next great stock to fall into your lap, you can actively search for them. And by reading a few extra reports and then putting those ideas into a capable screener, you'll soon be amazed at some of your newest picks. And you'll feel pretty smart after finding them too.
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 trial to the Research Wizard today. And the next time you read an economic report, open up the Research Wizard, plug your findings 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: http://www.zacks.com/performance .