Investing Smarter: How Zacks Premium Shines a Light on Growth Opportunities

New and experienced investors alike strive to navigate the stock market with confidence. Zacks Premium provides various tools to support these goals.

With daily updates on the Zacks Rank and Industry Rank, a complete access to the Zacks #1 Rank List, detailed Equity Research reports, and Premium stock screens, Zacks Premium equips users to enhance their investment strategies.

Understanding the Zacks Style Scores

The Zacks Style Scores, developed in conjunction with the Zacks Rank, serve as important indicators to help investors identify stocks likely to outperform the market in the next 30 days.

Stocks are rated with letters from A to F, signifying their value, growth, and momentum characteristics. An A rating indicates a stronger potential for performance compared to a B, and so forth.

The Style Scores include four key categories:

Value Score

For value investors, the focus is on identifying stocks priced below their actual value before the market catches on. The Value Style Score uses ratios, such as P/E, PEG, Price/Sales, and Price/Cash Flow, to spotlight these attractive opportunities.

Growth Score

Growth investors, in contrast, emphasize a company’s financial health and future potential. This score evaluates projected and historical earnings, sales, and cash flow to discover stocks poised for sustainable growth.

Momentum Score

Momentum investing hinges on the belief that “the trend is your friend.” This strategy focuses on capitalizing on trends in stock prices or earnings. By analyzing one-week price changes and monthly earnings estimate shifts, the Momentum Style Score signals the opportune moments for investing.

VGM Score

Investors who appreciate a blend of styles will find the VGM Score valuable. This score integrates Value, Growth, and Momentum Scores, making it a comprehensive tool in evaluating investments.

Intersecting Style Scores with the Zacks Rank

The Zacks Rank is a proprietary stock-rating model that leverages earnings estimate revisions to aid investors in building successful portfolios.

Historically, #1 (Strong Buy) stocks have achieved an impressive +25.41% average annual return since 1988, significantly outperforming the S&P 500. A wide selection of stocks exists, with over 200 rated as Strong Buy and around 600 as #2 (Buy) each day.

Selecting from more than 800 highly rated stocks can be daunting, which is where Style Scores add value.

To maximize returns, investors are encouraged to focus on stocks carrying a Zacks Rank of #1 or #2 combined with Style Scores of A or B. This combination increases the likelihood of success. Even for #3 (Hold) ranked stocks, having A or B Scores remains crucial for ensuring upside potential.

The trend of earnings estimate revisions plays a vital role in determining stock selections. For instance, a stock with a low rating, like #4 (Sell) or #5 (Strong Sell), could present a higher risk, even if it holds Strong Style Scores.

Consequently, owning a portfolio rich in #1 or #2 Ranked stocks with corresponding A or B Style Scores is advisable.

Spotlight on Meta Platforms (META)

Meta Platforms stands out as the world’s largest social media entity. Initially known only for the Facebook app, the company now encompasses popular platforms like Instagram and WhatsApp, reaching nearly 3.24 billion users daily as of March 31, 2024.

Currently, META holds a #2 (Buy) Zacks Rank and has a VGM Score of B.

Momentum investors should observe this technology giant closely. With a Momentum Style Score of B, META’s shares have increased by 15.4% in just the past four weeks.

In the last 60 days, one analyst has raised their earnings forecast for fiscal 2024, leading to a revision of the Zacks Consensus Estimate, which increased by $0.10 to $21.37 per share. META displays an average earnings surprise of 12.6%.

With a solid Zacks Rank and strong Style Scores for Momentum and VGM, META is worth considering for prospective investors.

Is Meta Platforms, Inc. (META) a Smart Investment?

For those contemplating an investment in Meta Platforms, Inc. (META), Zacks Investment Research provides insights on the best stocks for the next month. Their offerings include a free report detailing the seven top stocks to consider.

Since 1978, Zacks Investment Research has equipped investors with independent tools and research. Notably, the Zacks Rank system has consistently outperformed the S&P 500 with an average gain of +24.08% per year, a record returning from January 1, 1988, through May 6, 2024.

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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.