Chicago, IL - April 08, 2015 - Stocks in this week's article include: Lionbridge Technologies (LIOX - Free Report), Mednax (MD - Free Report) and Costco Wholesale Corp. (COST - Free Report) . Kevin Matras shows why stocks with new analyst coverage are stocks you want to have.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
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 to 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 what sectors saw the most new jobs or labor force expansion, and which ones contracted.
I can remember countless times where that report got me into the right sectors and industries at the right time before anybody else was talking about them.
In fact, I still remember getting into housing in early 2012 while everybody else was staying as far away from it as possible. But, after seeing construction jobs continue to rise in report after report after report, I knew the housing market had turned. And that was one of the first alerts to the housing recovery - for those who knew where to look.
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 three industries:
1) Professional and Business Services +40,000
(noted areas: computer system design, architectural & engineering services, and management & technical consulting services)
2) Health Care +34,000
(up 363,000 over last 12 months)
3) Retail Trade +26,000
(noted areas: general merchandise stores)
The reason why I like this report for stock picking is because if an industry is hiring lots of new people, 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.
This is just one very specific way to do top down analysis. But you can go to any screener (like the one on Zacks.com or the Research Wizard) and locate the sector, then industry of interest.
Then you should add in your favorite and most successful stock-picking criteria to drill down to the best ones, such as Zacks Rank 1s or 2s (Strong Buys or Buys); market-beating growth rates; below industry valuations; upward earnings estimate revisions, etc.
Here are 3 stocks from some of the industries singled out as the biggest job creators in last week's Employment report:
(Professional and Business Services -- Computer-Services)
(Health Care -- Medical-Hospitals)
(Retail Trade -- Retail-Discount)
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 the new picks you come up with.
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 finds in, and see what gems come out.
Sign up now for your free trial today and start picking better stocks immediately. And with the backtesting feature, you can test your ideas to see how you can improve your trading in both up markets and down markets. Don't wait for the market to get better before you decide to do better. Start learning how to be a better trader today: http://at.zacks.com/?id=111
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.
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