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Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.
One of our most popular services, Zacks Premium offers daily updates of the Zacks Rank and Zacks Industry Rank; full access to the Zacks #1 Rank List; Equity Research reports; and Premium stock screens like the Earnings ESP filter. All are useful tools to find what stocks to buy, what to sell, and what are today’s hottest industries.
The service also includes the Focus List, which is a long-term portfolio of top stocks that boast a winning, market-beating combination of growth and momentum qualities.
Breaking Down the Zacks Focus List
If you could, wouldn’t you jump at the chance for access to a curated list of stocks to kickstart your investing journey?
That’s what the Zacks Focus List offers. It’s a portfolio of 50 stocks that serve as a starting point for long-term investors to build their individual portfolios. The stocks included in the list are set to outperform the market over the next 12 months.
Additionally, each selection is accompanied by a full Zacks Analyst Report, something that makes the Focus List even more valuable. The report explains in detail why each stock was picked and why we believe it’s good for the long-term.
The portfolio’s past performance only solidifies why investors should consider it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500’s return of 9.38%. Cumulatively, the portfolio has returned 2,519.23% while the S&P returned 854.95%. Returns are for the period of February 1, 1996 to March 31, 2021.
Focus List Methodology
When stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.
Earnings estimates are expectations of growth and profitability, and are determined by brokerage analysts. Together with company management, these analysts examine every aspect that may affect future earnings, like interest rates, the economy, and sector and industry optimism.
Earnings estimate revisions are very important, since investors also need to take into consideration what a company will earn in the future.
When a stock receives upward earnings estimate revisions, it will likely get even more positive changes in the future. For instance, if an analyst raised their earnings outlook last month, they’ll probably do so again this month, and other analysts will follow.
Utilizing the power of earnings estimate revisions is when the Zacks Rank joins the party. A unique, proprietary stock-rating model, the Zacks Rank uses changes to quarterly earnings expectations to help investors create a winning portfolio.
Four primary factors make up the Zacks Rank: Agreement, Magnitude, Upside, and Surprise. Each is given a raw score that’s recalculated every night and compiled into the Rank, and with this data, stocks are then classified into five groups, ranging from “Strong Buy” to “Strong Sell.”
The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.
Because stock prices react to revisions, buying stocks with rising earnings estimates can be very profitable. Focus List stocks offer investors a great opportunity to get into companies whose future earnings estimates will be raised, potentially leading to price momentum.
Focus List Spotlight: Ubiquiti Inc. UI
Headquartered in New York, Ubiquiti Inc., along with its subsidiaries, offers a comprehensive portfolio of networking products and solutions for service providers and enterprises. Its service-provider product platforms offer carrier-class network infrastructure for fixed wireless broadband, wireless backhaul systems and routing; while enterprise product platforms provide wireless local area network (WLAN) infrastructure, video surveillance products and machine-to-machine communication components. The company was earlier known as Ubiquiti Networks Inc. and traded under the symbol “UBNT”.
UI, a #2 (Buy) stock, was added to the Focus List on January 7, 2019 at $99.94 per share. Since then, shares have increased 205.97% to $305.79.
One analysts revised their earnings estimate upwards in the last 60 days for fiscal 2022. The Zacks Consensus Estimate has increased $0.26 to $11.33. UI boasts an average earnings surprise of 20.5%.
Earnings for UI are forecasted to see growth of 15.9% for the current fiscal year as well.
Another standout Focus List stock you could consider is JPM Chase & Co. JPM. JPM is one of the largest financial service firms in the world, with assets of $3.68 trillion.
JPM is a #2 (Buy)-ranked stock, and shares have gained almost 150% since being added to the portfolio.
Five analysts have raised their earnings outlook for the current fiscal year. JPM’s bottom line is now expected to rise about 60% year-over-year; the Zacks Consensus Estimate has increased $0.09 to $14.14 per share. Additionally, JPM has an average earnings surprise of 33.27%.
Reveal Winning Stocks
Unlock all of our powerful research, tools and analysis, including the Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. You’ll quickly identify which stocks to buy, hold and sell, and target today’s hottest industries, to help improve the performance of your portfolio. Gain full access now >>
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JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Ubiquiti Inc. (UI) : Free Stock Analysis Report
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