Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.
The Zacks Premium service makes this easier. It features daily updates of the Zacks Rank and Zacks Industry Rank; full access to the Zacks #1 Rank List; Equity Research reports; and Premium stock screens like the Earnings ESP filter. All of these can help you quickly identify what stocks to buy, what to sell, and what are today's hottest industries.
Also included in Zacks Premium is the Focus List. This is a long-term portfolio of top stocks that have all the traits to beat the market.
Breaking Down the Zacks Focus List
Building an investment portfolio from scratch can be difficult, so if you could, wouldn't you take a peek at a curated list of top stocks?
That's what the Zacks Focus List offers. It's a portfolio of 50 stocks that serve as a starting point for long-term investors to build their individual portfolios. The stocks included in the list are set to outperform the market over the next 12 months.
Additionally, each selection is accompanied by a full Zacks Analyst Report, something that makes the Focus List even more valuable. The report explains in detail why each stock was picked and why we believe it's good for the long-term.
The portfolio's past performance only solidifies why investors should consider it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500's return of 9.38%. Cumulatively, the portfolio has returned 2,519.23% while the S&P returned 854.95%. Returns are for the period of February 1, 1996 to March 31, 2021.
Focus List Methodology
When stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.
Earnings estimates are expectations of growth and profitability, and are determined by brokerage analysts. Together with company management, these analysts examine every aspect that may affect future earnings, like interest rates, the economy, and sector and industry optimism.
Earnings estimate revisions are very important, since investors also need to take into consideration what a company will earn in the future.
Stocks that receive upward earnings estimate revisions are more likely to receive even more upward changes in the future. For example, if an analyst raised their estimates last month, they're more likely to do it again this month, and other analysts are likely to do the same.
Harnessing the power of earnings estimate revisions is where the Zacks Rank comes in. The Zacks Rank is a unique, proprietary stock-rating model that utilizes changes to a company's quarterly earnings expectations to help investors build a winning portfolio.
There are four main factors behind the Zacks Rank: Agreement, Magnitude, Upside, and Surprise. Each one of these features is then given a raw score that's recalculated every night and compiled into the Rank. Using this data, stocks are classified into five groups, ranging from "Strong Buy" to "Strong Sell."
The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.
It can be very profitable to buy stocks with rising earnings estimates, as stock prices respond to revisions. By adding Focus List stocks, there's a great chance you'll be getting into companies whose future earnings estimates will be raised, which can lead to price momentum.
Focus List Spotlight: HCA Holdings (HCA)
Effective May 8, 2017, the company’s name was changed to HCA Healthcare, Inc. from HCA Holdings, Inc. It is the largest non-governmental operator of acute care hospitals in the U.S. Headquartered in Nashville, TN, it operates hospitals and related health care entities.
Since being added to the Focus List on January 7, 2019 at $123.39 per share, shares of HCA have increased 69.84% to $209.56. The stock is currently a #3 (Hold) on the Zacks Rank.
Nine analysts revised their earnings estimate higher in the last 60 days for fiscal 2021, while the Zacks Consensus Estimate has increased $1.40 to $14.15. HCA also boasts an average earnings surprise of 67.1%.
Earnings for HCA are forecasted to see growth of 29.5% for the current fiscal year as well.
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HCA Healthcare, Inc. (HCA) : Free Stock Analysis Report
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