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.
It also includes the Focus List, a long-term portfolio of top stocks that have all the elements to beat the market.
Breaking Down the Zacks Focus List
If you could, wouldn't you jump at the chance for access to a curated list of stocks to kickstart your investing journey?
Enter the Zacks Focus List. It's a portfolio made up of 50 stocks that are set to beat the market over the next 12 months; each company selected serves as a foundation for long-term investors looking to create an individual portfolio.
What makes the Focus List even more helpful is that each selection is accompanied by a full Zacks Analyst Report, which explains the reasoning behind every stock's selection and why we believe it's a good pick 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, or expectations of growth and profitability, come from brokerage analysts who track publicly traded companies; these analysts work together with company management to analyze every aspect that may affect future earnings, like interest rates, the economy, and sector and industry optimism.
What a company will earn down the road also needs to be taken into consideration, and this is why earnings estimate revisions are so important.
When a stock receives upward earnings estimate revisions, it will likely get even more positive changes in the future. For instance, if an analyst raised their earnings outlook last month, they'll probably do so again this month, and other analysts will follow.
Utilizing the power of earnings estimate revisions is when the Zacks Rank joins the party. A unique, proprietary stock-rating model, the Zacks Rank uses changes to quarterly earnings expectations to help investors create 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: GE HealthCare Technologies (GEHC)
Chicago, IL-based GE HealthCare Technologies, a leading global medtech company, operates across four primary segments — Imaging, Ultrasound (AVS), Patient Care Solutions (PCS), and Pharmaceutical Diagnostics (PDx). Headquartered in Chicago, the company has a diversified portfolio of advanced medical imaging systems, ultrasound devices, monitoring equipment, and a growing radiopharmaceuticals pipeline. With a mission to deliver precision care, GEHC continues to pivot from a traditional equipment vendor toward an integrated solutions provider, combining hardware, software, digital analytics, and pharmaceuticals.
Since being added to the Focus List on January 4, 2023 at $60.49 per share, shares of GEHC have increased 29.34% to $78.24. The stock is currently a #3 (Hold) on the Zacks Rank.
For fiscal 2025, five analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.04 to $4.57. GEHC boasts an average earnings surprise of 11.1%.
Earnings for GEHC are forecasted to see growth of 1.8% for the current fiscal year as well.
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GE HealthCare Technologies Inc. (GEHC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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