Given the relatively positive market sentiments since the election results, it might just be the right time to add some good stocks to your portfolio. If you are thinking that it’s relatively easy to buy stocks in the bullish market, then you are wrong. You might end up buying overpriced stocks, which may not appreciate further.
In such a situation, expert advice helps to select the right stocks. One could easily follow rating upgrades by brokers as they have a deeper insight into stocks, the sectors and the overall economy. They are in direct communication with the company executives and even attend conference calls.
Further, brokers thoroughly study the publicly available documents and scrutinize the fundamentals of companies and place them against the current economic environment to find out how the stocks will fare as an investment option. Hence, by following broker rating upgrades, you can easily find attractive stocks.
However, solely depending on analysts’ upgrades is not the right way to build your investment portfolio. You must also take into consideration certain other factors before picking any stock. This way you can ensure solid returns.
The Winning Strategy
The following screen will help you in your search for potential winners:
Broker Rating Upgrades (4 weeks): The screen selects stocks that have witnessed broker rating upgrades 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: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven record of success. You can see the complete list of today’s Zacks #1 Rank stocks here.
VGM Score equal to 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 (Buy) offer the best upside potential.
Here are four of the six stocks that made it through the screen:
Headquartered in Tulsa, OK, Alliance Resource Partners LP ARLP produces and markets coal primarily to utilities and industrial users in the U.S. Over the trailing four quarters, the company delivered an average positive surprise of 10.4%. The stock has witnessed 10% upward revisions in broker ratings over the past four weeks.
EnerSys ENS, headquartered in Reading, PA, manufactures, markets, and distributes industrial batteries. The company boasts a strong surprise history, with a trailing four-quarter average beat of 3.0%. The stock has witnessed 14.3% upward revision in broker ratings over the past four weeks.
Cambrex Corporation CBM, based in East Rutherford, NJ provides various products and services for the development and commercialization of new and generic therapeutics across the globe. The company boasts a strong surprise history, with a trailing four-quarter average beat of 19.8%. The stock has witnessed 50% upward revision in broker ratings over the past four weeks.
Secaucus, NJ -based The Children's Place, Inc. PLCE operates as a children's specialty apparel retailer. The company boasts a strong surprise history, with a trailing four-quarter average beat of 36.3%. The stock 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.
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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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