Tariff tensions are heating up, with new tariffs levied by the U.S. federal government on March 4, 2025. With a second round of tariffs imposed by President Donald Trump, the United States’ biggest trading partners — Canada, Mexico and China — are impacted. China and Canada are coming up with retaliatory tariffs (Mexico’s retaliatory response is expected to be announced soon) against the United States, and trade tensions are escalating.
This trade war is expected to result in increased volatility and uncertainty going forward, as far as U.S. equity markets are concerned. However, this uncertain scenario does not mean that investors should turn their backs on stocks. Keeping an eye on broker-favorite stocks like Cardinal Health CAH, DXC Technology DXC, Cross Country Healthcare CCRN, Avnet AVT and Asbury Automotive Group ABG appears prudent.
We have designed a screen to shortlist stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of broker information, it has been included. The price/sales ratio takes care of the company’s top line, making the strategy a well-rounded one.
Screening Criteria
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks).
% change in Q (1) est. (4 weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter).
Price-to-Sales = Bot%10 (The lower the ratio, the better. Companies meeting this criterion are in the bottom 10% of our universe of over 7,700 stocks with respect to this ratio).
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com (This takes out the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
Cardinal Health is a nationwide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. CAH has two reporting segments — Pharmaceutical and Specialty Solutions, Global Medical Products and Distribution and Others.
Cardinal Health has an expected earnings growth rate of 5.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 60 days. CAH currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
DXC Technology is benefiting from strength in the digital business and partnerships, which are helping it expand in the cloud computing space. DXC is implementing robust cost-saving measures to enhance its financial performance.
Over the past 60 days, the Zacks Consensus Estimate for DXC Technology’s current-year earnings has increased by 5.4%. DXC’s earnings surpassed estimates in each of the last four quarters, the average beat being 23.8%. The company currently carries a Zacks Rank #3 (Hold).
Cross Country Healthcare: This talent management and other consultative services provider for healthcare clients is improving from the strength in its current relationships, and momentum in home care, physician staffing and education.
CCRN’s home care staffing business is benefiting from the rising number of PACE program wins, and the physician staffing business is growing from higher billable days and revenues per day sales. Improving operating leverage from volume growth and proactive cost management are driving the bottom line.
Cross Country Healthcare currently carries a Zacks Rank #3. CCRN’s earnings surpassed estimates in three of the last four quarters (missing the mark in the other quarter), the average beat being 2.7%.
Avnet is benefiting from the strength of the defense and data center end markets. Its continued focus on boosting the Internet of Things capabilities is helping it expand in newer markets and gain customers. Better sales execution is anticipated to aid revenue growth in the near term.
AVT, currently carrying a Zacks Rank of 3, has a decent surprise history, with its earnings surpassing the Zacks Consensus Estimate in two of the last four quarters, missing the mark on the other occasions. The average beat is 8.7%.
Asbury’s diversified product mix and multiple streams of income improve its risk profile and position it for top-line growth. The company’s e-commerce platform— Clicklane— is driving growth. Strategic buyouts are helping the auto retailer increase its market share.
Investor-friendly moves also instill optimism. Asbury currently carries a Zacks Rank # 3. Over the past 30 days, the Zacks Consensus Estimate for ABG’s current-quarter earnings has increased by 1.3%.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
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