While recent economic data point to some effectiveness of the Federal Reserve’s ultra-aggressive monetary tightening, we are still not out of the woods. The central bank is expected to keep raising interest rates until inflation comes down reasonably. This has made investors wary as higher rates will lead to a recession in the next six-nine months.
The pessimistic investor sentiments are leading to huge market volatility, making it difficult for individual investors to pick stocks independently and generate solid returns. At this stage, one way to choose the right stocks in the current situation is to follow rating upgrades by brokers. In this regard, stocks like
United Therapeutics Corporation
UTHR
,
StoneCo Ltd.
STNE
,
Reinsurance Group of America, Incorporated
RGA
and
United Airlines Holdings, Inc.
UAL
are worth considering.
As brokers directly communicate with the top management, they have a deeper understanding into what is happening in a particular company. They meticulously assess 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.
So, 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 four stocks that qualified for the screening:
Silver Spring, MD-based
United Therapeutics
markets four medicines in the United States to treat pulmonary arterial hypertension. UTHR is also engaged in research and development efforts to increase the supply of transplantable organs and tissues through regenerative medicine and organ manufacturing.
United Therapeutics’ 2022 earnings are projected to jump 65.1%. The company, carrying a Zacks Rank #2 at present, has witnessed an 8.3% upward revision in broker ratings over the past four weeks.
Cayman Islands-based
StoneCo
provides financial technology solutions to merchants and integrated partners to conduct electronic commerce across in-store, online and mobile channels in Brazil. STNE distributes its solutions to digital merchants through sales and technical personnel and software vendors.
The company’s earnings for 2022 are expected to surge 191.7%. StoneCo, currently carries a Zacks Rank #2, has witnessed an 11.1% upward revision in broker ratings over the past four weeks.
Headquartered in Chesterfield, MO,
Reinsurance Group of America
is a leading global provider of traditional life and health reinsurance and financial solutions. RGA reports through four geographic segments: the United States and Latin America, Canada, Europe, the Middle East and Africa, and Asia Pacific.
Reinsurance Group of America’s 2022 earnings are projected to surge 1224.8%. The company, carrying a Zacks Rank #2 at present, has witnessed a 14.3% upward revision in broker ratings over the past four weeks.
United Airlines
, based in Chicago, transports people and cargo not only throughout North America but also to destinations in Asia, Europe, the Middle East and Latin America. UAL is part of four passenger joint business arrangements
United Airlines’ 2022 earnings are projected to jump 114.3%. The company, carrying a Zacks Rank #2 at present, has witnessed a 6.3% upward revision in broker ratings over the past four weeks.
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
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From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
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This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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