Maximize Your Investments with Zacks Premium: Uncovering Style Scores and Top Stocks
Investing wisely in the stock market is a goal for both new and seasoned investors. Zacks Premium offers a range of tools designed to boost your confidence and knowledge about investing.
With daily updates from the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, detailed Equity Research reports, and Premium stock screens, this service can transform you into a more informed and confident investor.
Additionally, Zacks Premium provides valuable insights through the Zacks Style Scores.
Understanding the Zacks Style Scores
The Zacks Style Scores were created alongside the Zacks Rank as additional indicators for investors. They help in identifying stocks likely to outperform the market within the next month.
Each stock receives a rating from A to F based on three key characteristics: value, growth, and momentum. Much like school grades, an A denotes a better investment potential than a B, and so forth.
The Style Scores break down into four distinct categories:
Value Score
Value investors seek companies that trade below their true worth. The Value Style Score evaluates stocks based on ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, identifying the most appealing options that might be overlooked by the broader market.
Growth Score
For growth investors, the focus is on a company’s future potential and overall financial health. The Growth Style Score looks at projected earnings, sales, and cash flow to spot companies likely to sustain growth over time.
Momentum Score
Momentum investors capitalize on trends, believing “the trend is your friend.” The Momentum Style Score identifies the right moments to buy stocks, analyzing factors such as recent price changes and shifts in earnings estimates.
VGM Score
The VGM Score merges the insights from the three Style Scores to help investors find stocks with a compelling combination of value, growth potential, and positive momentum. This score also works exceptionally well alongside the Zacks Rank.
How Style Scores Integrate with the Zacks Rank
The Zacks Rank is a unique stock-rating model that utilizes revisions in earnings estimates to guide investors in building successful portfolios.
This model has proven effective, with #1 (Strong Buy) stocks producing an average annual return of +25.41% since 1988, significantly outperforming the S&P 500. However, with over 200 companies rated as Strong Buy and around 600 more ranked #2 (Buy) at any time, it can be challenging to choose the best stocks for your portfolio.
This challenge is where the Style Scores prove useful.
To enhance your returns, focus on stocks with Zacks Ranks of #1 or #2 coupled with Style Scores of A or B. If you’re considering stocks rated #3 (Hold), ensure they also have Style Scores of A or B to retain strong upside potential.
As highlighted, Style Scores should guide your stock selections in tandem with the Zacks Rank, primarily when assessing a company’s earnings outlook.
A stock rated #4 (Sell) or #5 (Strong Sell), even with high Style Scores, might still face challenges due to declining earnings forecasts, which could negatively affect its stock price. Hence, prioritizing stocks with #1 or #2 ranks, along with strong Style Scores, is advisable.
Spotlight on Meta Platforms (META)
Meta Platforms stands as the largest social media company globally. Its offerings have expanded from the original Facebook app to include Instagram and WhatsApp, as well as Messenger. As of March 31, 2024, nearly 3.24 billion people utilize Meta’s suite of applications every day.
Currently, META holds a #2 (Buy) rating on the Zacks Rank with a VGM Score of B.
This company also presents a compelling opportunity for growth investors. META’s Growth Score of B predicts a robust 44.2% year-over-year earnings increase for the current fiscal year.
In the last two months, four analysts have raised their earnings estimates for fiscal 2024, with the Zacks Consensus Estimate improving by $0.14 to $21.44 per share. Additionally, META has shown an average earnings surprise of 12.6%.
With its solid Zacks Rank and high Growth and VGM Style Scores, META is a stock worth considering for your investment list.
Top 7 Stocks to Watch Over the Next 30 Days
Experts have identified seven exceptional stocks from the current list of 220 Zacks Rank #1 Strong Buys, labeling them “Most Likely for Early Price Pops.”
Since 1988, this list has consistently outperformed the market, with an impressive average yearly gain of +23.7%. Be sure to review these carefully selected seven stocks without delay.
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Meta Platforms, Inc. (META): 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.
