The favorable December inflation reading has come as a relief for investors. Rising inflation over the past few months had raised concerns that the Federal Reserve could slow or halt its interest rate cuts. The strong start to the fourth-quarter 2024 earnings season is another bright spot.
Investors would like to take advantage of this bright scenario and design a winning portfolio for healthy returns. Given the enormity and difficulty of this task, as stocks from different industries are present in the market, investors are advised to get help from brokers, who are deemed to be experts in the field of investing. Broker-favorite stocks such as National Vision Holdings EYE, Cencora COR, ABM Industries ABM, Arrow Electronics ARW and Bunge Global BG are therefore in focus.
We have designed a screen 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.
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks).
% change in Q (1) est. (4 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 over 7,700 stocks with respect to this ratio).
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = 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 screen:
National Vision is a leading optical retailer. It is deploying remote medicine technology in tandem with electronic health record technology to drive expanded capacity, improve in-store efficiencies and improve the patient experience.
Following a comprehensive store fleet review, National Vision is taking actions to improve the overall health of the core business and deploy capital to growth initiatives. National Vision surpassed estimates in each of the trailing four quarters, delivering an earnings surprise of 93.7%, on average. EYE currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
Cencora is benefiting from continued solid organic revenue growth. The strong performance of Cencora’s World Courier unit is a huge positive. Cencora is expected to benefit from generics growth in the long run.
Cencora surpassed estimates in each of the trailing four quarters, delivering an earnings surprise of 7%, on average. COR currently carries a Zacks Rank #2 (Buy).
New York-based ABM Industries is a provider of integrated facility solutions in the United States and other countries. ABM currently carries a Zacks Rank #2. The company has an impressive surprise history, with its earnings surpassing the Zacks Consensus Estimate in each of the last four quarters, the average beat being 11.6%.
ABM launched ELEVATE in 2021. It is designed to drive organic growth and modernize its digital ecosystem. The acquisition of RavenVolt in 2022 strengthened the company’s presence in EV infrastructure and power solutions.
Arrow’s core strength of providing best-in-class services and easy-to-acquire technologies is expected to bolster growth in the future. The company has been active on the acquisition front, having acquired as many as 45 businesses over the last three decades.
The company has an impressive surprise history, with its earnings surpassing the Zacks Consensus Estimate in each of the last four quarters. The average beat is 11.8%. ARW currently carries a Zacks Rank #3 (Hold).
Bunge Global has its registered office in Geneva, Switzerland and its corporate headquarters in St. Louis, MO. It aims to connect farmers to consumers to deliver essential food, feed and fuel to the world.
Bunge Global has an impressive surprise history, with its earnings surpassing the Zacks Consensus Estimate in three of the last four quarters and missing on the other occasion. The average beat is 13.4%. BG currently carries a Zacks Rank #3.
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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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Arrow Electronics, Inc. (ARW) : Free Stock Analysis Report
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National Vision Holdings, Inc. (EYE) : Free Stock Analysis Report
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