With the United States and Iran once again exchanging fire, the already fragile ceasefire is under renewed strain. Moreover, the increase in hostilities in the Ukraine-Russia conflict has accentuated the uncertain global scenario.
The resulting market volatility makes it very difficult for individual investors to design a winning stock portfolio. Choice of improper stocks can adversely impact returns, thereby ruining the very objective of investing one’s hard-earned money in a highly unpredictable stock market.
So, what's the way forward? One way is to trust broker advice and have broker-favorite stocks like Par Pacific PARR, Bassett Furniture Industries BSET, ChargePoint Holdings CHPT, Cleveland-Cliffs CLF and Alaska Air Group ALK in one’s portfolio.
Since brokers meticulously follow the stocks in their coverage, they revise their earnings estimates after carefully examining the pros and cons of an event for the concerned company. Naturally, their estimate revisions serve as an important pointer regarding the price of a stock. Given this extensive know-how, brokers are deemed to be experts, equipped with thorough knowledge and a clear insight into the nitty-gritty of the investment world. Paying heed to such well-researched information is, therefore, advisable for investors.
Screening Parameters
# (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).
% 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 concerning this ratio).
Current 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 eliminates the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
Par Pacific is benefiting from a refining business that remains well-positioned in the current crude-price environment. Although geopolitical tensions have been supporting crude prices, oil remains well below the highs seen earlier this year. The current price scenario continues to provide refiners like Par Pacific with relatively attractive feedstock costs.
Instead of relying on a single source of crude, PARR has been depending on crude from a variety of sources, comprising U.S. inland oil fields, imported oil delivered by ship and Canadian heavy crude. By having exposure to Canadian heavy oil, which is cheaper than lighter crude, Par Pacific is likely enjoying a cost advantage.
Par Pacific, currently sporting a Zacks Rank #1 (Strong Buy), surpassed the Zacks Consensus Estimate for earnings in two of the last four quarters and missed the mark twice, the average beat being 69.9%.
You can see the complete list of today’s Zacks #1 Rank stocks here
Bassett Furniture Industries is enhancing its business model even as the housing market remains weak. The company operates multiple company-owned and licensed home furnishing stores that offer free in-home design consultations along with custom furniture design and manufacturing services.
Beyond its retail presence, Bassett maintains a strong wholesale business, supplying products to more than 1,000 open-market accounts. Bassett Furniture, currently sporting a Zacks Rank #1, has seen the Zacks Consensus Estimate for current-quarter earnings being revised 8.3% upward over the past 60 days.
ChargePoint is benefiting from increased revenues and a notable reduction in debt. Efforts to strengthen its balance sheet and improve financial flexibility bode well for the company’s growth. It is well-positioned to benefit from the rapid adoption of electric vehicles (“EVs”). ChargePoint continues to strengthen its competitive position through innovation and strategic partnerships.
Beyond expanding its footprint, ChargePoint is increasingly focused on improving the economics of its business. Rising platform engagement is helping drive monetization opportunities, while stronger cost controls and better supply-chain execution are improving network reliability and deployment efficiency.
ChargePoint, currently carrying a Zacks Rank #2 (Buy), has an impressive earnings surprise history. CHPT surpassed the Zacks Consensus Estimate for earnings in three of the last four quarters and missed the mark once, the average beat being 15.7%.
Cleveland-Cliffs should gain from its merger with AK Steel and the buyouts of ArcelorMittal USA and Stelco. It will also benefit from higher steel prices and its vertically integrated profile. The Stelco acquisition is also expected to significantly drive its shipment volumes in the current year.
Cleveland-Cliffs, currently carrying a Zacks Rank #3 (Hold), has an impressive earnings surprise history. CLF surpassed the Zacks Consensus Estimate for earnings in each of the last four quarters, the average beat being 18.1%.
Alaska Air is benefiting from impressive air travel demand, which has remained resilient across the carrier’s network. Apart from demand trends remaining supportive, fleet investments to upgrade the fleet and buybacks enhance per share value over time.
Alaska Air, currently carrying a Zacks Rank #3, has a decent earnings surprise history. ALK surpassed the Zacks Consensus Estimate for earnings in two of the last four quarters, missing the mark on the other occasions. The average beat is 73.8%.
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Cleveland-Cliffs Inc. (CLF): Free Stock Analysis Report
Alaska Air Group, Inc. (ALK): Free Stock Analysis Report
Bassett Furniture Industries, Incorporated (BSET): Free Stock Analysis Report
Par Pacific Holdings, Inc. (PARR): Free Stock Analysis Report
ChargePoint Holdings, Inc. (CHPT): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).