Breaking News
0

5 Stocks In Focus As Analysts Initiate Coverage

By Zacks Investment ResearchJul 17, 2019 08:31AM ET
www.investing.com/analysis/5-stocks-in-focus-as-analysts-initiate-coverage-200440634
5 Stocks In Focus As Analysts Initiate Coverage
By Zacks Investment Research   |  Jul 17, 2019 08:31AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Coverage initiation on a stock by analyst(s) helps in interpreting information pertaining to capital markets, creating value for investors. Lack of information creates inefficiencies that might trigger misinterpretation of stocks (over- or under-valued).

In fact, coverage initiation usually depicts increased investor inclination. Investors, on their part, often assume that there is something in the stock that has attracted analyst attention. In other words, they believe that the company coming under the microscope definitely has some value.
Obviously, stocks are not arbitrarily chosen to cover. New coverage on a stock usually reflects an encouraging future envisioned by the analyst(s). At times, increased investor focus on a stock motivates analysts to take a closer look at it.

Notably, the average change in broker recommendation is preferred over a single recommendation change.

Influence on Stock Price

It is interesting to note that the price impact of analyst initiation depends on the initial recommendation. Positive recommendations — Buy and Strong Buy — generally lead to a significantly positive price reaction in comparison to Hold recommendations. On the contrary, analysts hardly initiate coverage with a Strong Sell or Sell recommendation. Meanwhile, stocks typically see an upward price movement with a new analyst coverage compared to what is witnessed with a rating upgrade under an existing coverage.

Now, if an analyst gives a new recommendation on a company that has very few or no existing coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.

So, it’s a good strategy to bet on stocks that have seen increased analyst.

Screening Criteria

Number of Broker Ratings now greater than the Number of Broker Ratings four weeks ago (This will shortlist stocks that have recent new coverage).

Average Broker Rating less than Average Broker Rating four weeks ago ('Less than' means 'better than' four weeks ago).

Increased analyst coverage and improving average rating are the primary criteria of this strategy but one should consider other relevant parameters to make the strategy foolproof.

Here are the other screening parameters:

Price greater than or equal to $5 (as a stock below $5 will not likely create significant interest for most investors).

Average Daily Volume greater than or equal to 100,000 shares (if volume isn’t enough, it will not attract individual investors).

Here are five of the 11 stocks that passed the screen:

AllianceBernstein Holding L.P. (NYSE:AB) , a diversified investment management service provider, currently carries a Zacks Rank #2 (Buy). Shares have gained 12.6% year to date, compared with its industry’s rally of 19.3%. The company's earnings estimates have risen 3% for the current year over the past seven days, depicting analysts’ optimism over the stock’s earnings potential. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

LiqTech International, Inc. (NASDAQ:LIQT) , a clean technology company, currently has a Zacks Rank #3 (Hold). Shares have gained 77% year to date, outperforming its industry’s rally of 31%. The company’s earnings for the current year are expected to grow a solid 133.3%.

Amadeus IT Group, S.A. (OTC:AMADY) provides technology solutions for the global travel industry and currently carries a Zacks Rank #3. Although the stock has underperformed its industry year to date, earnings estimates have risen 1% for the current year over the past 30 days, depicting the stock’s solid growth potential.

Plantronics, Inc. (NYSE:PLT) , a global leader in audio communications for businesses and consumers, currently carries a Zacks Rank #3. The company’s Return on Equity (ROE) of 20% is higher than the industry’s 2.6%. A high ROE means the company is spending wisely and is in all possibilities running a profitable business.

Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) designs, develops, manufactures, and sells aerospace and defense products and systems in the United States and currently carries a Zacks Rank #3. Its shares have gained 28.7% year to date, compared with its industry’s rally of 32.4%. That said, earnings estimates have risen 18.4% for the current year over the past 90 days, depicting analyst optimism over the stock’s earnings potential.

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.

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



Plantronics, Inc. (PLT): Free Stock Analysis Report

Aerojet Rocketdyne Holdings, Inc. (AJRD): Free Stock Analysis Report

AllianceBernstein Holding L.P. (AB): Free Stock Analysis Report

LiqTech International, Inc. (LIQT): Free Stock Analysis Report

Amadeus IT Group SA (AMADY): Free Stock Analysis Report

Original post
5 Stocks In Focus As Analysts Initiate Coverage
 
5 Stocks In Focus As Analysts Initiate Coverage

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email