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Zacks.com featured highlights: Canadian Imperial Bank of Commerce, Comfort Systems, Kratos Defense, Sterling Construction and Wesco Aircraft Holdings

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For Immediate Release

Chicago, IL - January 25, 2017 - Stocks in this week's article include Canadian Imperial Bank of Commerce (NYSE: CM - Free Report ), Comfort Systems (NYSE: FIX - Free Report ), Kratos Defense & security Solutions (NASDAQ: KTOS - Free Report ), Sterling Construction (NASDAQ: STRL - Free Report ) and Wesco Aircraft Holdings (NYSE: WAIR - Free Report ).

Screen of the Week of Zacks Investment Research:

The Power of New Analyst Coverage

Broker recommendations -- love them or hate them, they do have their place. And we all look at them eventually.

Whether you're a small individual investor or a large institutional portfolio manager (or somewhere in between), who doesn't like it when a stock gets an upgraded rating or sees a new analyst jumping in with coverage? We all do. (Although I should note that, in general, the change in the average broker recommendation is a better indicator than the actual recommendation itself.)

Anyway, today I want to talk about companies that receive new analyst coverage.

One of the things that generates analyst coverage is investor interest. How else can you explain the increased analyst coverage for Facebook (a company that's only been public for 2 1/2 yrs.) in comparison to a company like GE (public for more than 40 yrs.)?

And as new coverage is initiated, it becomes more visible, which in turn means potentially more demand (read higher prices).

This is often the case because analysts almost always initiate coverage with a positive recommendation. (Why write a research report on a company not widely followed only to say it stinks?)

And when it comes to companies with little to no analyst coverage, that one new recommendation can sometimes give portfolio managers the validation they need to build a position. (And the more money they can invest, the more they can potentially influence prices.)

The best way to use this information is to look for companies with analyst coverage that has increased over the last 4 weeks.

Simply look at the number of analyst recommendations now in comparison to the number of analyst recommendations 4 weeks ago. An increase in coverage is bullish whereas a decrease in coverage is bearish.

It's typically more bullish if the increase went from none to one or if the coverage was minimal to begin with. (Going from 25 to 26 isn't going to have the same impact because that 26th analyst isn't discovering something 'new'.) But increased coverage is better than decreased coverage -- assuming the coverage is positive of course.

Here's a screen to try:

Number of Broker Ratings now greater than the Number of Broker Ratings four weeks ago

(This shows stocks where new coverage has recently been added.)

Average Broker Rating less than Average Broker Rating four weeks ago

(By 'less than', I mean 'better than' four weeks ago.)

• And I'm applying all of the above parameters to stocks with Prices greater than or equal to 5 (most money managers won't even look at a stock under $5) and Average Daily Volume greater than or equal to 100,000 shares (if there's not enough volume, even individual investors won't want it).

Here are 5 stocks from this week's screen:

Canadian Imperial Bank of Commerce (NYSE: CM - Free Report )

(from 4 analysts four weeks ago to 5)

Comfort Systems (NYSE: FIX - Free Report )

(from 2 analysts four weeks ago to 3)

Kratos Defense & security Solutions (NASDAQ: KTOS - Free Report )

(from 3 analysts four weeks ago to 5)

Sterling Construction (NASDAQ: STRL - Free Report )

(from 2 analysts four weeks ago to 3)

Wesco Aircraft Holdings (NYSE: WAIR - Free Report )

(from 4 analysts four weeks ago to 5)

Many screeners won't let you search for the number of analysts covering a stock, let alone comparing the amount of coverage they had weeks or even months ago. But you can with the Research Wizard. And you can backtest it all. Find out how to pick the right stocks right now by taking a free trial to the Research Wizard stock picking and backtesting program.

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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About Screen of the Week

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Contact: Jim Giaquinto

Company: Zacks.com

Phone: 312-265-9268

Email: pr@zacks.com

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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer .

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.

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Canadian Imperial Bank of Commerce (CM): Free Stock Analysis Report

Comfort Systems USA, Inc. (FIX): Free Stock Analysis Report

Kratos Defense & Security Solutions, Inc. (KTOS): Free Stock Analysis Report

Sterling Construction Company Inc (STRL): Free Stock Analysis Report

Wesco Aircraft Holdings, Inc. (WAIR): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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