New to Investing? This 1 Finance Stock Could Be the Perfect Starting Point

HAt Zacks, we provide our members with many different opportunities to take full advantage of the stock market, as well as how to invest in a way that leads to long-term success.

One of our most popular services, Zacks Premium offers daily Zacks Ranking and Zacks Industry Ranking updates; full access to the Zacks #1 ranking list; Equity Research Reports; and premium action screens like the ESP filter on gains. All are useful tools for finding out what stocks to buy, what to sell, and what are the hottest industries today.

It also includes the Focus List, a long-term portfolio of the best stocks that have all the elements to beat the market.

Breaking down Zacks focus list

Building an investment portfolio from scratch can be difficult, so if you could, wouldn’t you take a look at a curated list of the best stocks?

Enter Zacks focus list. It’s a portfolio of 50 stocks that are expected to beat the market over the next 12 months; each selected company serves as a foundation for long-term investors looking to build an individual portfolio.

One thing that makes the focus list even better is that each selection comes with a comprehensive Zacks analyst report. This helps explain why each stock was selected and why we think it’s a good long-term choice.

The portfolio’s past performance only reinforces why investors should take it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500 return of 9.38%. Cumulatively, the portfolio returned 2,519.23% while the S&P returned 854.95%. Returns are for the period from February 1, 1996 to March 31, 2021.

Focus List Methodology

When stocks are selected for the Focus list, it reflects our enduring reliance on the power of earnings estimate revisions.

Earnings estimates, or growth and profitability expectations, come from brokerage analysts who track publicly traded companies; these analysts work with company management to analyze all aspects that could affect future earnings, such as interest rates, the economy, and sector and industry optimism.

Revisions to earnings estimates are very important, as investors must also consider what a company will earn in the future.

When a stock receives upward revisions to earnings estimates, it will likely see even more positive changes going forward. For example, if an analyst raised their earnings outlook last month, they will likely do so again this month, and other analysts will follow suit.

Using the power of revenue estimate revisions is where the Zacks rank joins the party. A unique and proprietary stock rating model, Zacks Rank uses changes to quarterly earnings forecasts to help investors create a winning portfolio.

The Zacks Ranking consists of four main pillars: Accord, Magnitude, Upside, and Surprise. Each receives a raw score, which is recalculated each night and compiled into the rank. Next, stocks are classified into five groups, ranging from “Strong Buy” to “Strong Sell”, using this data.

The Focus list is made up of stocks hand-picked from a long list of companies ranked #1 (Strong Buy) or #2 (Buy), meaning each new addition benefits from a bullish consensus on earnings among analysts.

Since stock prices react to revisions, it can be very profitable to buy stocks with rising earnings estimates. By buying stocks from the targeted list, you are therefore likely entering companies that will have increased future earnings estimates, which could lead to price momentum.

Discussion List Spotlight: CBRE Group (CBRE)

Based in Dallas, TX, CBRE Group, Inc. is a commercial real estate and investment services company, providing a broad range of services to tenants, landlords, lenders and investors in office, retail, industrial, multi-family and other types of businesses. real estate in all major metropolitan areas of the world. Services include facility, transaction and project management; property management; investment management; assessment and evaluation; real estate leasing; strategic advice; real estate sales; mortgage services and development services. With over 100,000 employees, the company serves customers in more than 100 countries.

On March 13, 2017, CBRE was added to the Focus listing at $36.40 per share. Shares have risen 180.55% to $102.12 since then, and the company is number 2 (buy) on the Zacks chart.

An analyst has revised up its earnings estimate over the past 60 days for fiscal 2021, while Zacks’ consensus estimate rose $0.03 to $5.33. CBRE also claims an average earnings surprise of 41%.

Additionally, analysts expect CBRE’s earnings to rise 63% for the current fiscal year.

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CBRE Group, Inc. (CBRE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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