Zacks Investment Research: Combining Proven Systems with Latest Trends
At Zacks Investment Research, we pride ourselves on our unique approach to stock selection. While our primary focus is on the Zacks Rank system, we understand the importance of staying informed about the latest value, growth, and momentum trends in the market.
The Zacks Rank System: A Proven Approach
The Zacks Rank system is a proprietary stock-picking model that emphasizes earnings estimates and estimate revisions to identify stocks that are likely to outperform the market. The model assigns a ranking of 1 to 5, with a 1 indicating strong buy and a 5 indicating strong sell, based on four factors:
- Zacks Rank #1: Strong Buy – Zacks Rank #1 stocks have seen significant positive estimate revisions and have the potential to significantly outperform the market.
- Zacks Rank #2: Buy – Zacks Rank #2 stocks have seen positive estimate revisions and have a good chance of outperforming the market.
- Zacks Rank #3: Hold – Zacks Rank #3 stocks have seen no change in the latest estimate revisions and are expected to perform in line with the market.
- Zacks Rank #4: Sell – Zacks Rank #4 stocks have seen negative estimate revisions and have a higher likelihood of underperforming the market.
- Zacks Rank #5: Strong Sell – Zacks Rank #5 stocks have seen significant negative estimate revisions and are best avoided.
Staying Informed About Latest Trends
While the Zacks Rank system is our primary tool for stock selection, we also pay close attention to the latest value, growth, and momentum trends in the market. This allows us to identify stocks that may not yet be reflected in the earnings estimates and estimate revisions that drive the Zacks Rank.
Value investing, for example, involves looking for stocks that are undervalued relative to their intrinsic worth. This can be measured by various metrics, such as price-to-earnings ratio, price-to-book ratio, and price-to-sales ratio.
Growth investing, on the other hand, focuses on companies that are expected to grow faster than the market average. This can be measured by metrics such as earnings growth rate, revenue growth rate, and cash flow growth rate.
Momentum investing involves looking for stocks that have recently outperformed the market and are expected to continue doing so. This can be measured by metrics such as price momentum, earnings momentum, and earnings surprise.
The Impact on Individuals
For individual investors, using a combination of the Zacks Rank system and an understanding of value, growth, and momentum trends can lead to more informed investment decisions. By focusing on stocks with strong Zacks Rank and positive trends in value, growth, or momentum, investors can increase their chances of outperforming the market.
The Impact on the World
On a larger scale, the use of the Zacks Rank system and an understanding of value, growth, and momentum trends can have a significant impact on the investing community and the broader economy. By helping investors make more informed decisions, these approaches can lead to more efficient markets and a more stable economy.
Conclusion
At Zacks Investment Research, we believe that a combination of the proven Zacks Rank system and an understanding of the latest value, growth, and momentum trends is the key to successful investing. By focusing on stocks with strong Zacks Rank and positive trends in value, growth, or momentum, investors can increase their chances of outperforming the market and contributing to a more efficient and stable investing community and economy.
So whether you’re an individual investor looking to grow your portfolio or a financial professional seeking to provide guidance to clients, the Zacks Rank system and an understanding of value, growth, and momentum trends are essential tools for success. Join us at Zacks and start making smarter investment decisions today.
