5 Best Stocks With Upgraded Broker Ratings

As things stand today, with overall market sentiments fairly positive, you must be thinking picking stocks is the easiest thing on earth. However, with almost all the stocks witnessing a bullish trend, you might end up choosing the wrong ones.

In such a situation, it is prudent to seek help from the pros. One way of doing it is to follow broker rating upgrades, as brokers have a deeper insight into stocks and the overall sectors.

Brokers analyze the company’s publicly available documents, go to conference calls and are in direct communication with the top management. Also, they talk to customers to understand what they like or dislike about the products and services offered by the company.

Hence, there’s an all-inclusive research behind the rating of a broker on a company’s stock. By following what the majority of brokers are saying about a stock can help you gauge its potential. Naturally, when an analyst upgrades a stock, you can easily rely on it.

Arguably, it’s not the right thing to depend solely on brokers’ upgrades to build your portfolio. You must also take into consideration other factors to ensure strong returns.

Screening Parameters

Here we have a screening strategy that should result in good returns:

Broker Rating Upgrades (4 weeks): The screen chooses those stocks that have witnessed broker upgrades over the last four weeks.

Current Price greater than or equal to 5: The stocks must be trading at $5 or above.

Average 20-day Volume greater than 100,000: A large trading volume ensures that the stock is easily tradable.

Zacks Rank equal to #1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of success.

VGM Score less than or equal to B: Our research indicates that stocks with a VGM Score of ‘A’ or ‘B’ when combined with a Zacks Rank #1 or 2 (Buy) offer the best upside potential.

5 Stocks to Bet on

Here are five of the eight stocks that made it through the screen:

Select Comfort Corporation (NASDAQ:SCSS) is engaged in the manufacture, retailing and direct marketing of premium quality, innovative adjustable-firmness beds and other sleep-related products. The company boasts a strong surprise history, with a trailing four-quarter beat of 54.19%.

Select Medical Holdings Corporation (NYSE:SEM) operates specialty hospitals and outpatient rehabilitation clinics. Over the trailing four quarters, the company delivered an average surprise of 5.49%.

WEX Inc. (NYSE:WEX) offers physical, digital and virtual corporate card payment solutions. Over the trailing four quarters, the company delivered an average earnings surprise of 2.11%.

NuVasive, Inc. (NASDAQ:NUVA) is one of the leading global medical device companies in the global spine market, focused on developing minimally-disruptive surgical products and procedurally-integrated solutions for the spine. The company also boasts a strong surprise history, with a trailing four-quarter beat of 23.50%.

Post Holdings, Inc. (NYSE:POST) is a manufacturer, marketer and distributor of branded ready-to-eat cereals in the U.S. and Canada. The company has a strong surprise history, with a trailing four-quarter beat of 345.14%.

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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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SELECT COMFORT (SCSS): Free Stock Analysis Report

WEX INC (WEX): Free Stock Analysis Report

NUVASIVE INC (NUVA): Free Stock Analysis Report

SELECT MEDICAL (SEM): Free Stock Analysis Report

POST HOLDINGS (POST): Free Stock Analysis Report

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Zacks Investment Research