You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 Broker-Loved Stocks to Keep an Eye on Post Fed's Huge Rate Cut
Read MoreHide Full Article
On Sept. 18, 2024, the Federal Reserve cut interest rates by 50 basis points in response to the cooling inflation scenario. This was the first time that interest rates were slashed since March 2020. While a 25-basis-point rate cut was more or less assured, the 50-basis-point rate cut highlights the Fed’s increasing focus on bolstering the job market. The Fed signaled that it will cut the rate by another half a percentage point in the current year.
The economy is likely to benefit from this considerable rate cut. Given this brightening scenario, investors should design a winning portfolio of broker-friendly stocks for impressive returns. Brokers are deemed to be experts in the field of investing. Stocks such as American Airlines (AAL - Free Report) , Alaska Air Group (ALK - Free Report) , Warner Bros. Discovery (WBD - Free Report) , Dana (DAN - Free Report) and Best Buy Company (BBY - Free Report) should grace their portfolios.
We have designed a screening process to shortlist stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of broker information, it has been included. The price/sales ratio takes care of the company’s top line, making the strategy a well-rounded one.
Screening Criteria
# (Up or Down Rating)/Total (four weeks) = Top #75 (This gives the list of the top 75 companies that witnessed net upgrades over the last 4 weeks.)
% change in Q(1) est. (four weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter.)
Price-to-Sales = Bot%10 (The lower the ratio, the better. Companies meeting this criterion are in the bottom 10% of our universe of more than 7,700 stocks with respect to this ratio.)
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded.)
Market value ($ million) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization.)
Com/ADR/Canadian = Com (This takes out the ADR and Canadian stocks.)
Here are five of the 10 stocks that made it through the screening:
American Airlines is based in Fort Worth, TX. A gradual increase in air travel demand (particularly for leisure) is aiding AAL. However, high operating costs are hurting its bottom line.
Alaska Air is based in Seattle, WA. The uptick in air travel demand is aiding the airline. The carrier’s shareholder-friendly attitude bodes well.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has been revised 8.8% upward. The Zacks Consensus Estimate for 2025 earnings has been revised 2.9% upward over the past 60 days. ALK currently carries a Zacks Rank #3.
Warner Bros. Discovery benefits from impressive streaming subscriber growth, driven by an expanding content portfolio. The company’s focus on sports streaming, particularly live sports, is another tailwind.
WBD currently carries a Zacks Rank #3. The Zacks Consensus Estimate for WBD’s current-quarter earnings indicates growth in excess of 100% from the year-ago actual.
Dana is a provider of power conveyance and energy-management solutions for vehicles and machinery in North America, Europe, South America and the Asia Pacific. The company is headquartered in Maumee, OH.
DAN currently carries a Zacks Rank #3. The Zacks Consensus Estimate for DAN’s 2024 earnings has been revised 30.7% upward over the past 60 days.
Best Buy retails technology products in the United States and Canada. The companyis benefitting from an uptick in retail sales. Best Buy’s initiatives to invest in systems and boost omni-channel capabilities should certainly lift its profit margins.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has been revised 2.5% upward. The company currently carries a Zacks Rank #3.
You can get the rest of the stocks on this list by signing up now for a 2-week free trial to the Research Wizard stock picking and backtesting software. You can also create your own strategies and test them first before making investments.
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.
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.
On Sept. 18, 2024, the Federal Reserve cut interest rates by 50 basis points in response to the cooling inflation scenario. This was the first time that interest rates were slashed since March 2020. While a 25-basis-point rate cut was more or less assured, the 50-basis-point rate cut highlights the Fed’s increasing focus on bolstering the job market. The Fed signaled that it will cut the rate by another half a percentage point in the current year.
The economy is likely to benefit from this considerable rate cut. Given this brightening scenario, investors should design a winning portfolio of broker-friendly stocks for impressive returns. Brokers are deemed to be experts in the field of investing. Stocks such as American Airlines (AAL - Free Report) , Alaska Air Group (ALK - Free Report) , Warner Bros. Discovery (WBD - Free Report) , Dana (DAN - Free Report) and Best Buy Company (BBY - Free Report) should grace their portfolios.
We have designed a screening process to shortlist stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of broker information, it has been included. The price/sales ratio takes care of the company’s top line, making the strategy a well-rounded one.
Screening Criteria
# (Up or Down Rating)/Total (four weeks) = Top #75 (This gives the list of the top 75 companies that witnessed net upgrades over the last 4 weeks.)
% change in Q(1) est. (four weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter.)
Price-to-Sales = Bot%10 (The lower the ratio, the better. Companies meeting this criterion are in the bottom 10% of our universe of more than 7,700 stocks with respect to this ratio.)
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded.)
Market value ($ million) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization.)
Com/ADR/Canadian = Com (This takes out the ADR and Canadian stocks.)
Here are five of the 10 stocks that made it through the screening:
American Airlines is based in Fort Worth, TX. A gradual increase in air travel demand (particularly for leisure) is aiding AAL. However, high operating costs are hurting its bottom line.
The Zacks Consensus Estimate for third-quarter 2024 earnings has been unchanged at 4 cents per shareover the past 90 days. AAL currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Alaska Air is based in Seattle, WA. The uptick in air travel demand is aiding the airline. The carrier’s shareholder-friendly attitude bodes well.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has been revised 8.8% upward. The Zacks Consensus Estimate for 2025 earnings has been revised 2.9% upward over the past 60 days. ALK currently carries a Zacks Rank #3.
Warner Bros. Discovery benefits from impressive streaming subscriber growth, driven by an expanding content portfolio. The company’s focus on sports streaming, particularly live sports, is another tailwind.
WBD currently carries a Zacks Rank #3. The Zacks Consensus Estimate for WBD’s current-quarter earnings indicates growth in excess of 100% from the year-ago actual.
Dana is a provider of power conveyance and energy-management solutions for vehicles and machinery in North America, Europe, South America and the Asia Pacific. The company is headquartered in Maumee, OH.
DAN currently carries a Zacks Rank #3. The Zacks Consensus Estimate for DAN’s 2024 earnings has been revised 30.7% upward over the past 60 days.
Best Buy retails technology products in the United States and Canada. The companyis benefitting from an uptick in retail sales. Best Buy’s initiatives to invest in systems and boost omni-channel capabilities should certainly lift its profit margins.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has been revised 2.5% upward. The company currently carries a Zacks Rank #3.
You can get the rest of the stocks on this list by signing up now for a 2-week free trial to the Research Wizard stock picking and backtesting software. You can also create your own strategies and test them first before making investments.
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