At 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 Rank and Zacks Industry Rank updates; full access to the Zacks # 1 ranking list; stock research reports; and Premium stock screens like the ESP Earnings Filter. All of them are useful tools for figuring out what stocks to buy, what to sell, and what are the hottest industries today.
The service also includes the Focus List, which is a long-term portfolio of the best stocks offering a winning and better-than-market combination of growth qualities and dynamism.
Break down Zacks’ focus list
If you could have access to an organized list of stocks to jumpstart your investment portfolio, wouldn’t you jump at the chance to take a look?
Enter Zacks’ focus list. It’s a portfolio of 50 stocks that should beat the market over the next 12 months; each company selected serves as a basis for long-term investors seeking to build up an individual portfolio.
One thing that makes the Focus List even more beneficial is that each pick comes with a full Zacks Analyst Report. It helps explain why each stock was picked and why we think it’s a good choice in the long run.
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 versus the S&P 500’s return of 9.38%. Cumulatively, the portfolio returned 2,519.23% while the S&P returned 854.95%. The declarations cover the period from February 1, 1996 to March 31, 2021.
Focus List Methodology
When stocks are selected for the Focus list, it reflects our continued confidence in the power of earnings estimate revisions.
Earnings estimates are expectations of growth and profitability, and are determined by analysts of the brokerage. Together with company management, these analysts examine all aspects that may affect future profits, such as interest rates, economics and optimism in the sector and industry.
Investors should also consider what a business will earn in the future. This is why revisions to earnings estimates are so important.
Stocks that receive upward revisions to earnings estimates are more likely to receive even more upward changes in the future. For example, if an analyst raised their estimates last month, they are more likely to do so again this month, and other analysts are likely to do the same.
The Zacks Ranking, which is a proprietary stock rating model, uses revisions to earnings estimates to help build a winning portfolio.
Rank Zacks consists of four main pillars: Accord, Magnitude, Upside, and Surprise. Each receives a raw score, which is recalculated each night and compiled into the leaderboard. Then stocks are categorized into five groups, ranging from âStrong Buyâ to âStrong Sellâ, using this data.
The Focus List is made up of stocks handpicked from a long list of companies ranked # 1 (strong buy) or # 2 (buy), meaning that every new addition enjoys a bullish earnings consensus among analysts.
Since stock prices react to revisions, buying stocks with rising earnings estimates can be very profitable. Focus List stocks provide an excellent opportunity for investors to enter companies with higher future earnings estimates, which could lead to price momentum.
Spotlight on Priority List: Nvidia (NVDA – Free report)
NVIDIA Corporation is the world leader in visual computing technologies and the inventor of the graphics processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to artificial intelligence (AI) based solutions that now support high performance computing (HPC), gaming and reality platforms. virtual (VR).
NVDA, a # 3 (hold) share, was added to the Focus List on May 20, 2019 at $ 156.53 per share. Since then, shares have risen 31.84% to $ 206.37.
For fiscal 2022, seven analysts revised their earnings estimates upward over the past 60 days, and Zacks’ consensus estimate rose $ 0.01 to $ 3.97. NVDA posts an average profit surprise of 12%.
In addition, NVDA’s profits are expected to increase by 58.8% for the current year.
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