Discovering Winning Stocks with the Zacks Style Scores
If you’re an investor seeking to build a profitable portfolio, you’re likely always on the lookout for strong, market-beating stocks. The process of identifying these stocks can be daunting, given the vast number of options available. However, there’s a powerful tool at your disposal that can help simplify your search: the Zacks Style Scores.
What are Zacks Style Scores?
The Zacks Style Scores are a unique set of metrics developed by Zacks Investment Research to help investors identify stocks with the highest probability of success. These scores are calculated based on six key factors: Value, Growth, Momentum, Size, and two Quality sub-scores, Profitability and Stability.
How Do the Zacks Style Scores Work?
Each stock is assigned a rank from 1 to 10 for each of the six factors, with 1 representing the lowest score and 10 representing the highest. The Style Scores are then calculated as a composite score for each factor, with a higher overall Style Score indicating a stronger investment candidate.
The Power of the Zacks Style Scores
Research has shown that a higher Zacks Style Score can significantly increase the likelihood of a stock outperforming its peers. For instance, a study conducted by Zacks found that stocks with a Style Score of A or B in all six categories have, on average, returned 11.6% per year, compared to just 3.4% for those with a D or F.
Applying the Zacks Style Scores in Your Portfolio
To use the Zacks Style Scores in your investment strategy, start by screening for stocks that have a high overall Style Score. You can also refine your search by focusing on specific categories, such as Value or Growth stocks, depending on your investment objectives.
The Impact of Zacks Style Scores on Your Investments
By using the Zacks Style Scores, you’ll be able to make more informed decisions when selecting stocks for your portfolio. This can lead to better performance, as you’ll be focusing on stocks with strong fundamentals and a proven track record of success.
The Global Impact of Zacks Style Scores
The Zacks Style Scores are not limited to the US stock market. They can be used to analyze stocks from around the world, providing investors with a valuable tool for identifying strong investment opportunities in various markets.
For instance, a study conducted by Zacks found that international stocks with a high overall Style Score have, on average, returned 12.2% per year, compared to just 6.6% for those with a low overall Style Score. This highlights the potential benefits of using the Zacks Style Scores in a global investment strategy.
Conclusion
The Zacks Style Scores offer a powerful, data-driven approach to investing, helping you identify stocks with the highest probability of success. By focusing on stocks with strong fundamentals and a proven track record, you’ll be better positioned to build a profitable, diversified portfolio. And with the ability to apply the Zacks Style Scores to international markets, you can expand your investment horizons and tap into opportunities around the world.
- The Zacks Style Scores are a set of metrics that help investors identify strong, market-beating stocks.
- Each stock is assigned a rank from 1 to 10 for six key factors: Value, Growth, Momentum, Size, Profitability, and Stability.
- Higher overall Style Scores indicate stronger investment candidates.
- Research shows that stocks with high Style Scores have outperformed their peers.
- The Zacks Style Scores can be used to analyze stocks from around the world.
