Buy These 4 Stocks as Analysts Spot Strength in Volatile Times

In today’s uncertain economic climate, new analyst coverage has become increasingly valuable for investors navigating volatility. With the Federal Reserve maintaining interest rates and signaling two possible cuts later in 2025, concerns about stagflation are rising, especially as GDP growth slows to 1.4% and inflation climbs to 3%, partly due to shifting tariff policies under President Trump.

Against this backdrop, new analyst coverage does more than spotlight stocks. It provides timely insights, updated models, and context on how companies might fare amid inflationary pressures, cost volatility, and weakening demand. Recent initiations on Karooooo Ltd. KARO, OppFi Inc. OPFI, QXO, Inc. QXO, and United Fire Group, Inc. UFCS reflect this growing need for sharper analysis, potentially boosting investor interest in these names.

Why New Analyst Coverage Holds Weight

Analysts typically possess specialized knowledge and expertise in particular industries or sectors. Through thorough research and analysis, they offer investors critical insights into a company's financial health, growth potential, competitive standing, and industry trends — insights that are often difficult for individual investors to acquire independently.

Coverage initiation on a stock by analyst(s) usually portrays a higher investor inclination. Investors, on their part, often assume that there is something special in a stock to attract analysts to cover it. In other words, they believe that the company coming under the microscope definitely holds some value.

Do analysts create value for companies by initiating coverage? Of course, they do because they play an important intermediary role with their extensive access to relevant data. Many investors have immense faith in analysts’ research as they fear that a lack of information might trigger inefficiencies.

Obviously, stocks are not randomly chosen to cover. A new coverage on a stock usually reflects a reassuring future envisioned by the analyst(s). At times, increased investor focus on a stock motivates analysts to take a closer look at it. After all, who doesn’t like to produce something that is already in demand? Hence, we often find that analysts’ ratings on newly added stocks are more favorable than their ratings on continuously covered stocks.

Needless to say, the average change in broker recommendation is preferable to a single recommendation change. Again, if an analyst issues a new recommendation on a company that has very little or no existing coverage, investors start paying more attention to it. Also, any further information attracts portfolio managers to build a position in the stock.

Stock Price Movements and Market Impact

New analyst coverage often leads to immediate stock price volatility. A positive rating can attract bullish sentiment and drive share prices higher, while neutral or negative ratings may trigger sell-offs. When multiple analysts initiate favorable coverage, the resulting investor confidence can lead to sustained upward momentum in valuation. Conversely, if coverage highlights overlook risks, investor enthusiasm may be dampened, and long-term performance can be hindered.

Are there newly covered stocks on your radar? Now might be the perfect time to dig deeper and uncover your next winning investment.

So, it’s a good strategy to bet on stocks that have seen increased analyst coverage over the last few weeks.

Screening Criteria

The Number of Broker Ratings is greater than the Number of Broker Ratings four weeks ago (this will shortlist stocks that have recent new coverage).

Average Broker Rating less than Average Broker Rating four weeks ago (“less than” means “better than” four weeks ago).

Increased analyst coverage and improving average rating are the primary criteria of this strategy, but one should also consider other relevant parameters to make it foolproof.

Here are the other screening parameters:

Price greater than or equal to $5 (as a stock below $5 will not likely create significant interest for most investors).

Average Daily Volume greater than or equal to 100,000 shares (if the volume isn’t enough, it will not attract individual investors).

Here are four out of seven stocks that passed the screen:

Karooooo: Karooooo, headquartered in Singapore, offers a mobility SaaS platform for connected vehicles across South Africa, other parts of Africa, Europe, Asia-Pacific, the Middle East, and the United States. Karooooo currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Karooooo shares have gained 36.4% in the past three months, below the industry’s 41.4% rise. Nonetheless, the fiscal 2026 earnings per share (EPS) estimate has increased to $1.87 from $1.82 over the past 30 days, depicting analysts’ optimism over the company’s prospects. The estimated figure for fiscal 2026 indicates 14.7% year-over-year growth. 

OppFi: Headquartered in Chicago, IL, this tech-driven digital finance platform offers a range of financial products and services to banks across the United States. OppFi currently sports a Zacks Rank #1.

OppFi shares have gained 73.2% in the past three months, outperforming the industry’s 16.2% rise. The 2025 EPS estimate has increased to $1.23 from $1.07 over the past 60 days. The estimated figure for 2025 indicates 29.5% year-over-year growth. Again, OppFi carries an impressive VGM Score of A.

QXO:  Based in Greenwich, CT, QXO distributes roofing, waterproofing, and building products across the United States. QXO currently carries a Zacks Rank #2 (Buy).

QXO shares have gained 78% in the past three months, outperforming the industry’s 42.6% growth. The 2025 EPS estimate has increased to 39 cents against a loss per share of 12 cents over the past 30 days. The estimated figure for 2025 indicates improvement from the year-ago reported loss per share of 10 cents.

United Fire Group: Based in Cedar Rapids, IA, United Fire Group offers property and casualty insurance to individuals and businesses across the United States. The company currently carries a Zacks Rank #2.

United Fire Group has gained 9.4% in the past three months, outperforming the industry’s 0.1% decline. The 2025 EPS estimate has increased to $3.50 from $2.42 over the past 60 days. The estimated figure for 2025 indicates a 2.4% year-over-year decline. Yet, UFCS carries an impressive VGM Score of A.

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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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