Unlocking Stock Market Potential with Zacks Premium
For both new and seasoned investors, confidently navigating the stock market is a key objective. Zacks Premium offers a variety of resources designed to help achieve this goal.
This popular research service empowers you to become a more informed investor, providing daily updates on the Zacks Rank, Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
Understanding Zacks Style Scores
One of the standout features of Zacks Premium is the Zacks Style Scores. This system rates stocks across three main investing styles and serves as an essential companion to the Zacks Rank. By using both systems, investors can identify stocks that have the highest potential for market outperformance in the upcoming 30 days.
Stocks receive a rating from A to F based on their value, growth, and momentum characteristics. An A rating signifies a higher likelihood of outperforming the market, compared to a B or C, and so on.
The Style Scores fall into four categories:
- Value Score
- Growth Score
- Momentum Score
- VGM Score
Value investors aim to discover stocks priced lower than their true worth. The Value Style Score relies on key ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow to uncover attractive investment opportunities.
For growth investors, future performance is paramount. The Growth Style Score examines projected and historical earnings, sales, and cash flow to identify stocks with sustained growth potential.
Momentum trading focuses on leveraging price trends. The Momentum Style Score assesses one-week price changes and monthly shifts in earnings estimates to determine optimal buying moments.
The VGM Score combines all three Style Scores, making it a powerful tool in conjunction with the Zacks Rank. It evaluates stocks based on their weighted scores, highlighting companies that exhibit solid value, promising growth prospects, and favorable momentum.
Linking Style Scores to the Zacks Rank
The Zacks Rank is a proprietary model that analyzes earnings estimate revisions to guide successful investing. Since 1988, stocks rated #1 (Strong Buy) have generated an impressive average annual return of +25.41%, significantly surpassing the S&P 500.
However, with potentially over 800 top-rated stocks available, selecting the right ones can become daunting.
This is where Style Scores play a crucial role. Investors looking for the best returns should focus on stocks with a Zacks Rank of #1 or #2, accompanied by a Style Score of A or B. Even for #3 (Hold) ranked stocks, high Style Scores can ensure maximum upside potential.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating may have decent Style Scores but a negative earnings outlook, increasing the risk of price declines.
Therefore, it’s advantageous to build a portfolio rich in stocks with a #1 or #2 Rank and Style Scores of A or B.
Spotlight Stock: Kirby Corporation (KEX)
Kirby Corporation stands out as the largest tank barge operator in the United States. Based in Houston, TX, it primarily transports bulk liquids across the Mississippi River System and the Gulf Intracoastal Waterway, covering all U.S. coasts as well as Alaska and Hawaii.
KEX currently holds a #3 (Hold) on the Zacks Rank and boasts a VGM Score of A. It could attract growth investors, as it has a Growth Style Score of B, projecting year-over-year earnings growth of 46.5% for the current fiscal year.
In the past 60 days, one analyst increased their earnings estimate for 2024, with the Zacks Consensus Estimate rising by $0.01 to $5.45 per share. Notably, KEX has showcased an average earnings surprise of 9.4%.
With a strong Zacks Rank and impressive Growth and VGM Style Scores, KEX is worth considering for investment.
Exclusive Investment Opportunity
Zacks’ research team has identified a “Single Best Pick to Double” from thousands of stocks. Five experts have chosen their top picks, and Director of Research Sheraz Mian has selected one with exceptional upside potential.
This company focuses on millennial and Gen Z customers, generating nearly $1 billion in revenue last quarter, and has a recent pullback that presents a prime buying opportunity. Past selections, like Nano-X Imaging, which surged +129.6% within nine months, exemplify the promise of Zacks’ insights.
Explore our top stock and four additional recommendations by clicking here for your free report.
Kirby Corporation (KEX): Free Stock Analysis Report
For more details, visit Zacks.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
