Concerns like the persistent disruptions in the global supply chain system, record-high inflation, the continuation of higher interest rate monetary policy globally and rising recession risk are weighing on investor sentiments. This is leading to huge market volatility, making it difficult for investors to select stocks independently and generate solid returns.
One way to choose the right stocks in the current situation is to follow rating upgrades by brokers. In this regard, stocks like The Kroger Co. KR, Halliburton Company HAL, Humana Inc. HUM, Associated Banc-Corp ASB and Pure Storage, Inc. PSTG are worth a look.
As brokers directly communicate with the top management, they have a deeper insight into what is happening in a particular company. They diligently review companies’ publicly available documents and even attend conference calls.
Brokers have a more understanding of the overall sector and industry. They place company fundamentals against the current economic backdrop to determine how a particular stock will fare as an investment.
Hence, when brokers upgrade a stock, you can rely on their judgment. But solely depending on broker upgrades is not a good way to build your investment portfolio. Several other factors should be taken into consideration to ensure steady returns.
Selecting the Winning Strategy
We have a screening strategy that will help you 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 trade 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: Despite good or bad market conditions, 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 five of 21 stocks that qualified for the screening:
Kroger, based in Cincinnati, OH, operates in the thin-margin grocery industry. KR’s supermarket and multi-department stores operate under four formats combo stores (combination of food and drug stores), multi-department stores, marketplace stores and price impact warehouses.
Kroger’s fiscal 2023 earnings are projected to increase 10.3%. The company, carrying a Zacks Rank #2 at present, has witnessed a 5.6% upward revision in broker ratings over the past four weeks.
Houston, TX-based Halliburton is one of the largest oilfield service providers in the world, which operates in more than 80 countries. HAL provides a variety of equipment, maintenance, and engineering and construction services to the energy, industrial and government sectors.
The company’s earnings for fiscal 2023 are expected to jump 92.6%. Halliburton, currently sporting a Zacks Rank #1, has witnessed a 6.7% upward revision in broker ratings over the past four weeks.
Headquartered in Louisville, KY, Humana is one of the largest health care plan providers in the United States. HUM provides health insurance benefits under Health Maintenance Organization (HMO), Private Fee-For-Service (PFFS) and Preferred Provider Organization (PPO) plans.
Humana’s 2022 earnings are projected to rise 21.3%. The company, carrying a Zacks Rank #2 at present, has witnessed a 5.6% upward revision in broker ratings over the past four weeks.
Associated Banc-Corp, based in Green Bay, WI, is a bank holding company that offers an array of banking and non-banking products and services. ASB provides a full range of financial products and services through more than 200 banking offices in Wisconsin, Illinois and Minnesota and commercial, financial services in Indiana, Michigan, Missouri, Ohio and Texas.
Associated Banc-Corp’s 2022 earnings are projected to increase 4.6%. The company, carrying a Zacks Rank #2 at present, has witnessed a 16.7% upward revision in broker ratings over the past four weeks.
Headquartered in Mountain View, CA, Pure Storage provides software-defined all-flash solutions that are uniquely fast and cloud-capable for customers. PSTG is the pioneer of the Evergreen Storage business model of hardware and software innovation, support and maintenance.
Pure Storage’s fiscal 2023 earnings are projected to surge 63.9%. The company, carrying a Zacks Rank #2 at present, has witnessed a 5.9% 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.
Click here to 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
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Halliburton Company (HAL) : Free Stock Analysis Report
Humana Inc. (HUM) : Free Stock Analysis Report
The Kroger Co. (KR) : Free Stock Analysis Report
Associated BancCorp (ASB) : Free Stock Analysis Report
Pure Storage, Inc. (PSTG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research