Author: Zacks Equity Research

COP – ConocoPhillips (COP) Outpaces Stock Market Gains: What You Should Know

ConocoPhillips (COP Free Report) closed at $60.31 in the latest trading session, marking a +0.57% move from the prior day. The stock outpaced the S&P 500’s daily gain of 0.18%.

Heading into today, shares of the energy company had gained 6.1% over the past month, outpacing the Oils-Energy sector’s gain of 4.11% and the S&P 500’s gain of 2.43% in that time.

Wall Street will be looking for positivity from COP as it approaches its next earnings report date. On that day, COP is projected to report earnings of $0.84 per share, which would represent year-over-year growth of 191.3%. Our most recent consensus estimate is calling for quarterly revenue of $9.63 billion, up 139.76% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.46 per share and revenue of $38.97 billion, which would represent changes of +456.7% and +102.36%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for COP. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 4.08% higher within the past month. COP is currently a Zacks Rank #3 (Hold).

Digging into valuation, COP currently has a Forward P/E ratio of 17.32. Its industry sports an average Forward P/E of 19.73, so we one might conclude that COP is trading at a discount comparatively.

Investors should also note that COP has a PEG ratio of 3.46 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. The Oil and Gas – Integrated – United States was holding an average PEG ratio of 3.46 at yesterday’s closing price.

The Oil and Gas – Integrated – United States industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 222, which puts it in the bottom 13% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

CC – Are Investors Undervaluing Chemours (CC) Right Now?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system’s “Value” category. Stocks with “A” grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Chemours (CC Free Report) is a stock many investors are watching right now. CC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 11.53, while its industry has an average P/E of 14.61. Over the past year, CC’s Forward P/E has been as high as 12.18 and as low as 7.85, with a median of 10.37.

We also note that CC holds a PEG ratio of 0.44. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. CC’s industry has an average PEG of 0.75 right now. Over the last 12 months, CC’s PEG has been as high as 0.45 and as low as 0.40, with a median of 0.43.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock’s price with the company’s revenue. This is a prefered metric because revenue can’t really be manipulated, so sales are often a truer performance indicator. CC has a P/S ratio of 1.22. This compares to its industry’s average P/S of 1.25.

Finally, investors should note that CC has a P/CF ratio of 11.47. This metric takes into account a company’s operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock’s P/CF looks attractive against its industry’s average P/CF of 11.63. Over the past year, CC’s P/CF has been as high as 22.03 and as low as 7.22, with a median of 11.69.

These are just a handful of the figures considered in Chemours’s great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CC is an impressive value stock right now.

FCX – Why Freeport-McMoRan (FCX) Stock Might be a Great Pick

One stock that might be an intriguing choice for investors right now is Freeport-McMoRan Inc. (FCX Free Report) . This is because this security in the Mining – Non Ferrous space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.

This is important because, often times, a rising tide will lift all boats in an industry, as there can be broad trends taking place in a segment that are boosting securities across the board. This is arguably taking place in the Mining – Non Ferrous space as it currently has a Zacks Industry Rank of 68 out of more than 250 industries, suggesting it is well-positioned from this perspective, especially when compared to other segments out there.

Meanwhile, Freeport-McMoRan is actually looking pretty good on its own too. The firm has seen solid earnings estimate revision activity over the past month, suggesting analysts are becoming a bit more bullish on the firm’s prospects in both the short and long term.

In fact, over the past month, current quarter estimates have risen from 70 cents per share to 77 cents per share, while current year estimates have risen from $2.84 per share to $3.18 per share. The company currently carries a Zacks Rank #3 (Hold), which is also a favorable signal. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

So, if you are looking for a decent pick in a strong industry, consider Freeport-McMoRan. Not only is its industry currently in the top third, but it is seeing solid estimate revisions as of late, suggesting it could be a very interesting choice for investors seeking a name in this great industry segment.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.

See 3 crypto-related stocks now >>

FB – Here's Why Facebook (FB) is a Great Momentum Stock to Buy

Momentum investing revolves around the idea of following a stock’s recent trend in either direction. In the ‘long’ context, investors will be essentially be “buying high, but hoping to sell even higher.” With this methodology, taking advantage of trends in a stock’s price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Facebook (FB Free Report) , which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.

It’s also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Facebook currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?

Let’s discuss some of the components of the Momentum Style Score for FB that show why this social media company shows promise as a solid momentum pick.

Looking at a stock’s short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It’s also helpful to compare a security to its industry; this can show investors the best companies in a particular area.

For FB, shares are up 0.28% over the past week while the Zacks Internet – Services industry is up 0.99% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 4.85% compares favorably with the industry’s 2.59% performance as well.

While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Shares of Facebook have increased 14.18% over the past quarter, and have gained 44.92% in the last year. On the other hand, the S&P 500 has only moved 8.17% and 43.13%, respectively.

Investors should also take note of FB’s average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, FB is averaging 13,981,456 shares for the last 20 days.

Earnings Outlook

The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with FB.

Over the past two months, 14 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost FB’s consensus estimate, increasing from $11.40 to $13.18 in the past 60 days. Looking at the next fiscal year, 13 estimates have moved upwards while there have been no downward revisions in the same time period.

Bottom Line

Given these factors, it shouldn’t be surprising that FB is a #2 (Buy) stock and boasts a Momentum Score of B. If you’re looking for a fresh pick that’s set to soar in the near-term, make sure to keep Facebook on your short list.

KLAC – KLA (KLAC) is a Great Momentum Stock: Should You Buy?

Momentum investing is all about the idea of following a stock’s recent trend, which can be in either direction. In the ‘long’ context, investors will essentially be “buying high, but hoping to sell even higher.” And for investors following this methodology, taking advantage of trends in a stock’s price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at KLA (KLAC Free Report) , which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.

It’s also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. KLA currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?

Let’s discuss some of the components of the Momentum Style Score for KLAC that show why this maker of equipment for manufacturing semiconductors shows promise as a solid momentum pick.

Looking at a stock’s short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.

For KLAC, shares are up 0.98% over the past week while the Zacks Electronics – Miscellaneous Products industry is flat over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 4.7% compares favorably with the industry’s 2.52% performance as well.

While any stock can see its price increase, it takes a real winner to consistently beat the market. That is why looking at longer term price metrics — such as performance over the past three months or year — can be useful as well. Over the past quarter, shares of KLA have risen 9.3%, and are up 73.32% in the last year. In comparison, the S&P 500 has only moved 8.17% and 43.13%, respectively.

Investors should also pay attention to KLAC’s average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. KLAC is currently averaging 991,889 shares for the last 20 days.

Earnings Outlook

The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with KLAC.

Over the past two months, 6 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost KLAC’s consensus estimate, increasing from $13.44 to $14.07 in the past 60 days. Looking at the next fiscal year, 6 estimates have moved upwards while there have been no downward revisions in the same time period.

Bottom Line

Taking into account all of these elements, it should come as no surprise that KLAC is a #2 (Buy) stock with a Momentum Score of B. If you’ve been searching for a fresh pick that’s set to rise in the near-term, make sure to keep KLA on your short list.

CBT – Cabot (CBT) Upgraded to Strong Buy: Here's Why

Cabot (CBT Free Report) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #1 (Strong Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.

A company’s changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate — the consensus measure of EPS estimates from the sell-side analysts covering the stock — for the current and following years.

Individual investors often find it hard to make decisions based on rating upgrades by Wall Street analysts, since these are mostly driven by subjective factors that are hard to see and measure in real time. In these situations, the Zacks rating system comes in handy because of the power of a changing earnings picture in determining near-term stock price movements.

As such, the Zacks rating upgrade for Cabot is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price.

Most Powerful Force Impacting Stock Prices

The change in a company’s future earnings potential, as reflected in earnings estimate revisions, and the near-term price movement of its stock are proven to be strongly correlated. That’s partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company’s shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.

Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Cabot imply an improvement in the company’s underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.

Harnessing the Power of Earnings Estimate Revisions

Empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, so it could be truly rewarding if such revisions are tracked for making an investment decision. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here >>>>.

Earnings Estimate Revisions for Cabot

This chemical company is expected to earn $4.70 per share for the fiscal year ending September 2021, which represents a year-over-year change of 126%.

Analysts have been steadily raising their estimates for Cabot. Over the past three months, the Zacks Consensus Estimate for the company has increased 23.7%.

Bottom Line

Unlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of ‘buy’ and ‘sell’ ratings for its entire universe of more than 4000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a ‘Strong Buy’ rating and the next 15% get a ‘Buy’ rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.

You can learn more about the Zacks Rank here >>>

The upgrade of Cabot to a Zacks Rank #1 positions it in the top 5% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.

ZEUS – Olympic Steel (ZEUS) Is Up 1.74% in One Week: What You Should Know

Momentum investing revolves around the idea of following a stock’s recent trend in either direction. In the ‘long’ context, investors will be essentially be “buying high, but hoping to sell even higher.” With this methodology, taking advantage of trends in a stock’s price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Olympic Steel (ZEUS Free Report) , a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.

It’s also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Olympic Steel currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?

Let’s discuss some of the components of the Momentum Style Score for ZEUS that show why this steel maker shows promise as a solid momentum pick.

Looking at a stock’s short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It’s also helpful to compare a security to its industry; this can show investors the best companies in a particular area.

For ZEUS, shares are up 1.74% over the past week while the Zacks Steel – Producers industry is up 0.23% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 12.46% compares favorably with the industry’s 1.96% performance as well.

While any stock can see its price increase, it takes a real winner to consistently beat the market. That is why looking at longer term price metrics — such as performance over the past three months or year — can be useful as well. Shares of Olympic Steel have increased 31.58% over the past quarter, and have gained 211.07% in the last year. On the other hand, the S&P 500 has only moved 8.17% and 43.13%, respectively.

Investors should also take note of ZEUS’s average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, ZEUS is averaging 185,486 shares for the last 20 days.

Earnings Outlook

The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock’s price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with ZEUS.

Over the past two months, 1 earnings estimate moved higher compared to none lower for the full year. These revisions helped boost ZEUS’s consensus estimate, increasing from $2.48 to $3.76 in the past 60 days. Looking at the next fiscal year, 2 estimates have moved upwards while there have been no downward revisions in the same time period.

Bottom Line

Taking into account all of these elements, it should come as no surprise that ZEUS is a #1 (Strong Buy) stock with a Momentum Score of B. If you’ve been searching for a fresh pick that’s set to rise in the near-term, make sure to keep Olympic Steel on your short list.

ISRG – Here's Why Intuitive Surgical, Inc. (ISRG) is a Great Momentum Stock to Buy

Momentum investing revolves around the idea of following a stock’s recent trend in either direction. In the ‘long’ context, investors will be essentially be “buying high, but hoping to sell even higher.” With this methodology, taking advantage of trends in a stock’s price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Intuitive Surgical, Inc. (ISRG Free Report) , a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.

It’s also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Intuitive Surgical, Inc. Currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?

Let’s discuss some of the components of the Momentum Style Score for ISRG that show why this company shows promise as a solid momentum pick.

Looking at a stock’s short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.

For ISRG, shares are up 3.95% over the past week while the Zacks Medical – Instruments industry is up 2.65% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 3.71% compares favorably with the industry’s 8.49% performance as well.

Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Shares of Intuitive Surgical, Inc. Have increased 22.16% over the past quarter, and have gained 54.77% in the last year. In comparison, the S&P 500 has only moved 8.17% and 43.13%, respectively.

Investors should also take note of ISRG’s average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, ISRG is averaging 538,653 shares for the last 20 days.

Earnings Outlook

The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock’s price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with ISRG.

Over the past two months, 6 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost ISRG’s consensus estimate, increasing from $12.31 to $13.58 in the past 60 days. Looking at the next fiscal year, 6 estimates have moved upwards while there have been no downward revisions in the same time period.

Bottom Line

Given these factors, it shouldn’t be surprising that ISRG is a #1 (Strong Buy) stock and boasts a Momentum Score of B. If you’re looking for a fresh pick that’s set to soar in the near-term, make sure to keep Intuitive Surgical, Inc. On your short list.

HSON – Hudson Global (HSON) Upgraded to Strong Buy: Here's What You Should Know

Hudson Global (HSON Free Report) could be a solid choice for investors given its recent upgrade to a Zacks Rank #1 (Strong Buy). This rating change essentially reflects an upward trend in earnings estimates — one of the most powerful forces impacting stock prices.

The sole determinant of the Zacks rating is a company’s changing earnings picture. The Zacks Consensus Estimate — the consensus of EPS estimates from the sell-side analysts covering the stock — for the current and following years is tracked by the system.

Since a changing earnings picture is a powerful factor influencing near-term stock price movements, the Zacks rating system is very useful for individual investors. They may find it difficult to make decisions based on rating upgrades by Wall Street analysts, as these are mostly driven by subjective factors that are hard to see and measure in real time.

Therefore, the Zacks rating upgrade for Hudson Global basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.

Most Powerful Force Impacting Stock Prices

The change in a company’s future earnings potential, as reflected in earnings estimate revisions, and the near-term price movement of its stock are proven to be strongly correlated. That’s partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company’s shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.

For Hudson Global, rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company’s underlying business. And investors’ appreciation of this improving business trend should push the stock higher.

Harnessing the Power of Earnings Estimate Revisions

As empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here >>>>.

Earnings Estimate Revisions for Hudson Global

This staffing company is expected to earn $0.86 per share for the fiscal year ending December 2021, which represents a year-over-year change of 300%.

Analysts have been steadily raising their estimates for Hudson Global. Over the past three months, the Zacks Consensus Estimate for the company has increased 11.1%.

Bottom Line

Unlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of ‘buy’ and ‘sell’ ratings for its entire universe of more than 4000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a ‘Strong Buy’ rating and the next 15% get a ‘Buy’ rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.

You can learn more about the Zacks Rank here >>>

The upgrade of Hudson Global to a Zacks Rank #1 positions it in the top 5% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.

CSLT – Here's Why Castlight Health (CSLT) is a Great Momentum Stock to Buy

Momentum investing revolves around the idea of following a stock’s recent trend in either direction. In the ‘long’ context, investors will be essentially be “buying high, but hoping to sell even higher.” With this methodology, taking advantage of trends in a stock’s price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Castlight Health (CSLT Free Report) , a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.

It’s also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Castlight Health currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?

Let’s discuss some of the components of the Momentum Style Score for CSLT that show why this online health care software company shows promise as a solid momentum pick.

Looking at a stock’s short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.

For CSLT, shares are up 3.96% over the past week while the Zacks Internet – Software industry is up 3.38% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 16.67% compares favorably with the industry’s 9.44% performance as well.

Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Shares of Castlight Health have increased 16.02% over the past quarter, and have gained 152.62% in the last year. In comparison, the S&P 500 has only moved 8.17% and 43.13%, respectively.

Investors should also take note of CSLT’s average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, CSLT is averaging 1,264,225 shares for the last 20 days.

Earnings Outlook

The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock’s price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with CSLT.

Over the past two months, 3 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost CSLT’s consensus estimate, increasing from -$0.03 to $0.00 in the past 60 days. Looking at the next fiscal year, 2 estimates have moved upwards while there have been no downward revisions in the same time period.

Bottom Line

Given these factors, it shouldn’t be surprising that CSLT is a #2 (Buy) stock and boasts a Momentum Score of B. If you’re looking for a fresh pick that’s set to soar in the near-term, make sure to keep Castlight Health on your short list.