Zacks #1 refers to the top-ranked stocks in the Zacks Rank system, which is a quantitative model used to identify stocks with the highest probability of price appreciation. Here are the key points about Zacks #1:
- High Growth Potential: Zacks #1 stocks are selected based on aggressive earnings growth or revenue growth, which is expected to propel their stock price higher in the future1.
- Strong Buy Rating: These stocks are assigned a "Strong Buy" rating, which indicates that analysts have a very positive outlook on the stock's performance2.
- Average Annual Return: The average yearly gain for Zacks #1 Rank stocks is +24.10% per year since 19883. This highlights the strong performance of these stocks over the long term.
- Selective Selection: Only the top 5% of stocks receive a #1 Zacks Rank, which means that the selection process is quite competitive, and these stocks are handpicked for their exceptional growth potential4.
- Earnings Estimate Revisions: The Zacks Rank is based on earnings estimate revisions, which are changes in analysts' forecasts of a company's future earnings. A positive trend in earnings estimates is a powerful force impacting stock prices, and Zacks #1 stocks are those that are benefiting from this trend the most25.
- Industry Consideration: The performance of Zacks #1 stocks is also influenced by the industry they operate in. Being in a top-ranked industry, such as technology or healthcare, can further enhance a stock's probability of success8.
In summary, Zacks #1 stocks are the cream of the crop, selected for their aggressive growth potential, strong buy rating, and historical performance. They are the stocks that analysts believe will outperform the market and are ideal for investors looking for high-return opportunities.
10/27/2024 05:51am
