The U.S. equity markets are in good health despite geopolitical tensions. Many U.S. companies have seen an uptick in their stock price following Donald Trump’s victory in the Presidential election. The Trump administration’s expected policies and anticipation of less regulatory scrutiny have lifted the stock price of certain companies.
Investors should take advantage of the post-election rally to design their stock portfolios for healthy returns. One way to do this would be to follow the advice of brokers, as they are deemed to be experts in the field of investing. Having broker-friendly stocks like Air Canada ACDVF, DXC Technology DXC, Cracker Barrel Old Country Store CBRL, Sally Beauty Holdings SBH and Deluxe DLX in one’s portfolio is advisable.
We have designed a screen to shortlist stocks based on improving analyst recommendations and upward revisions to earnings estimates over the last four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of analyst information, it has also been included. The price/sales ratio takes care of the company’s top line, making the strategy foolproof.
Screening Criteria
# (Up-Down Rating)/ Total (4 weeks) = Top #75(This gives the list of the top 75 companies that have witnessed net upgrades over the last 4 weeks).
Percentage 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).
We have also added the following screening parameters to ensure that the strategy is a winning one:
Price-to-Sales Ratio = 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 screen:
Air Canada, Canada’s leading airline, is benefiting from the buoyant scenario concerning air travel demand. Driven by this tailwind, shares of this carrier have gained 31.5% in the past six months.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has gained 39.6%. ACDVF currently carries a Zacks Rank #3 (Hold).
DXC Technology is benefiting from strength in the digital business and partnerships, which are helping it expand in the cloud computing space. DXC is implementing robust cost-saving measures to enhance its financial performance.
Over the past 60 days, the Zacks Consensus Estimate for DXC Technology’s current-year earnings has increased 8.7%. DXC’s earnings surpassed estimates in the last four quarters, the average beat being 22.2%. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cracker Barrel is prioritizing menu innovation and pricing to drive growth. The company is introducing the latest offerings, including shareable starters and specialty beverages, while optimizing pricing to enhance value. These initiatives aim to attract customers and support profitability.
CBRL has outpaced the Zacks Consensus Estimate for earnings in three of the last four quarters, missing the mark on the other occasion, the average beat being 14.9%. CBRL shares have gained 13.8% over the past six months. CBRL currently carries a Zacks Rank #3.
Sally Beauty is on track to drive growth, courtesy of initiatives like product innovation, expanded distribution, and new concepts and services. With regard to customer-centric efforts, the company is focused on acquiring customers via marketing programs, differentiated product offerings and strategic initiatives.
SBH has outpaced the Zacks Consensus Estimate for earnings in three of the last four quarters, missing the mark on the other occasion, the average beat being 3.7%. CBRL shares have gained 25.8% over the past six months. SBH currently carries a Zacks Rank #3.
Deluxe, headquartered in Minneapolis, MA, is a trusted payment and business technology company. Its solutions help businesses pay, get paid and grow.
DLX has a Zacks Rank #2 and a Value Score of A at present. Deluxe has a projected 3-5-year EPS growth rate of 12%.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
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.
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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.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>Cracker Barrel Old Country Store, Inc. (CBRL) : Free Stock Analysis Report
Sally Beauty Holdings, Inc. (SBH) : Free Stock Analysis Report
Deluxe Corporation (DLX) : Free Stock Analysis Report
DXC Technology Company. (DXC) : Free Stock Analysis Report
Air Canada (ACDVF) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
