U.S. equity markets have been experiencing extreme volatility lately, largely due to escalating trade tensions. Stocks have been tumbling on fears of a recession as uncertainty grows over President Trump’s tariff policies. The recent turmoil has resulted in the three major stock indexes — the Dow, the S&P 500, and the Nasdaq Composite — being in negative territory year to date. Recently released key economic data have indicated clearly that the U.S. economy is slowing down.
In view of the prevalent uncertainties surrounding the economy and the rise in inflation over the past few months, markets will likely stay volatile for a longer period. However, this unstable scenario does not mean that investors should shy away from investing in stocks. Keeping an eye on broker-loved stocks like Air Canada ACDVF, Enerflex Ltd. EFXT, AutoNation AN, Centene Corporation CNC and CVS Health CVS 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 the 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:
Air Canada has been benefiting from the impressive scenario in air travel demand. The Zacks Consensus Estimate for 2025 and 2026 sales has increased 0.12% and 5.6%, respectively, on a year-over-year basis.
The Zacks Consensus Estimate for current-year earnings has remained stable over the past seven days. ACDVF currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Canada-based Enerflex provides oilfield services for natural gas and petroleum producers. The company’s efforts to reward its shareholders are commendable.
The Zacks Consensus Estimate for EFXT’s next-year earnings has increased by 46% over the past 60 days. The company’s earnings surpassed estimates in one of the last four quarters, missed twice and matched on the other occasion, the average miss being 53%. The company currently carries a Zacks Rank #3.
AutoNation is one of the largest automotive retailers in the United States. The company’s diversified product mix and multiple streams of income lower its risk profile and augur well for earnings and sales growth.
The adoption of digital solutions has enhanced its market presence and revenues. The company currently carries a Zacks Rank #3. AN’s earnings surpassed estimates in two of the last four quarters and missed the mark in the other two quarters, the average miss being 0.03%.
Centene boasts an impressive inorganic growth strategy for expanding into new markets. Contract wins are increasing its medical membership base.
CNC surpassed the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in one. The average beat was 21.8%. The company currently carries a Zacks Rank #3.
CVS Health focuses on expanding healthcare services, cost-cutting measures and the introduction of smaller pharmacy-centric stores. Additionally, strong revenue growth in its pharmacy businesses is commendable.
CVS surpassed the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in one. The average beat was 4.6%. The company currently carries a Zacks Rank #3.
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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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