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4 Broker-Favorite Stocks to Monitor Post Analyst Upgrades

Despite signs of cooling inflation, the measure is still well above the Fed’s 2% target. In fact, Fed Chairman Jerome Powell recently indicated just one cut for 2024. In March, the Fed had hinted at three rate cuts for the year.

The latest stance implies that rates will remain high for longer than anticipated and push up the cost of borrowing. Despite the high interest rate-induced uncertainty, investors would want to design a portfolio that fetches handsome returns. For this, proper guidance from investment experts is needed.

Brokers, who are believed to be specialists in this field, are equipped with thorough knowledge and a clear insight into the nitty-gritties of the investment world. They have at their disposal a lot more information on a company and its prospects than individual investors.

Keeping this in mind, we designed a screen to shortlist stocks based on improving analyst recommendation 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 analyst information, it has been included. The price/sales ratio takes care of the company’s top line, making the strategy more effective.

Screening Criteria

# (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).

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% 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 four of the 10 stocks that made it through the screen:

.Bread Financial BFH: Based in Columbus, OH, the company continues to benefit from data-driven marketing strategies. Solid receivables growth in Card Services should drive its top line. Acquisitions and divestitures will aid the company in growing inorganically and expanding its international footprint.

Over the past 60 days, the Zacks Consensus Estimate for BFH’s current-quarter earnings has increased 3.5%. Bread Financial currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

New York-based ABM Industries ABM is a provider of integrated facility solutions in the United States and other countriesABM currently carries a Zacks Rank #3. The company has an impressive surprise history, with its earnings surpassing the Zacks Consensus Estimate in three of the last four quarters (missing the mark on the other occasion), the average beat being 7.3%.

The company's comprehensive transformational initiative called 2020 Vision has helped it attain long-term profitable growth through an industry-based go-to-market approach. The multi-year comprehensive strategic plan, ELEVATE, is expected to accelerate ABM’s organic growth, improve its strategic and comprehensive positioning, and reinforce profitability.

Centene CNC witnessed an uptick in revenues on strength in the Medicare and Medicaid businesses. A well-diversified healthcare suite and solid nation-wide presence have fetched multiple contract wins and deal renewals for CNC. This Zacks Rank #3 health insurer follows an inorganic growth route, which, in turn, bolsters its capabilities and provides an opportunity to boost top-line growth.

The Zacks Consensus Estimate for Centene’s 2024 earnings is currently pegged at $6.82 per share, indicating a 1.04% rise from the year-ago reported figure. CNC’s earnings surpassed estimates in each of the last four quarters, with an average beat of 10.45%.

AdvanSix ASIX is a diversified chemistry company that produces essential materials for its customers in a wide variety of end markets. The company’s operations are being hurt due to disruption at its Frankford site. Efforts to reward its shareholders, however, bode well.

The Zacks Consensus Estimate for AdvanSix’s 2024 earnings is currently pegged at $1.43 per share, indicating an 8.33% rise from the year-ago reported figure. ASIX’s earnings surpassed estimates in two of the last four quarters (missing the mark in the other two quarters). ASIX 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

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

ABM Industries Incorporated (ABM) : Free Stock Analysis Report

Centene Corporation (CNC) : Free Stock Analysis Report

AdvanSix (ASIX) : Free Stock Analysis Report

Bread Financial Holdings, Inc. (BFH) : Free Stock Analysis Report

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