CHICAGO, July 21, 2011 /PRNewswire/ -- Stocks in this
week's article include: Bed Bath & Beyond Inc. (NASDAQ:
BBBY), Complete Production Services, Inc. (NYSE: CPX),
Discover Financial Services (NYSE: DFS), Liquidity
Services, Inc. (NASDAQ: LQDT) and Polypore International,
Inc. (NYSE: PPO). Kevin Matras
explains why looking for stocks with upgraded broker ratings can
upgrade your portfolio to a whole new level.
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Screen of the Week written by Kevin
Matras of Zacks Investment Research:
I'm sure we've all had the pleasure of waking one morning and
seeing that a broker has upgraded one of our stocks. Unfortunately,
we've probably all had the experience of waking up and seeing one
of our stocks downgraded as well.
While nobody can perfectly predict an upgrade or guard against a
downgrade, it's important to know how the market reacts to these
things so you can stay in your upgraded winners (or buy if you're
on the fence) and consider getting out if a downgrade comes your
way.
One thing I've been doing lately is screening for stocks that
have recently seen a broker rating upgrade. Tests have proven that
stocks with broker rating upgrades outperform those that don't get
upgraded. Furthermore, they outperform even more against stocks
that get downgraded.
By how much?
I created three screens and ran some tests over the last 10
years. And I applied all the below criteria to stocks trading at
greater than or equal to $5 with an
average daily trading volume of greater than or equal to
100,000.
In screen 1: I backtested only those companies with broker
rating upgrades.
In screen 2: I tested companies with no rating change at all.
Whatever the rating was, good or bad, there was no change.
And in screen 3: I screened only those companies that received
broker rating downgrades.
For the rest of this Screen of the Week article, please visit
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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.
About Screen of the Week
Zacks.com created the first and best screening system on the web
earning the distinction as the "#1 site for screening stocks" by
Money Magazine. But powerful screening tools is just the
start. That is why Zacks created the Screen of the Week to
highlight profitable stock picking strategies that investors can
actively use. Each week, Zacks Profit from the Pros free email
newsletter shares a new screening strategy. Learn more about it
here http://at.zacks.com/?id=112
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