Zacks Rank #1 (Strong Buy) stocks have a long history of outperforming the market over a 1-3 month time period. This exclusive ranking system helps you identify leading companies both big and small that are poised for near term growth, as only 5% of the Zacks Rank universe receives this unique rank.
he example below demonstrates how being added to the Zacks Ranked #1 list not only helps you identify top stock over the short term, but how they can continue to grow while they remain on the list.
Example: Zagg Inc. (ZAGG)
Zagg Inc (ZAGG) is a small-cap growth company that designs, manufactures and distributes protective clear coverings and accessories for consumer electronic and hand-held devices, worldwide. ZAGG's flagship brand, the invisibleSHIELD, is a protective, high-tech patented film covering, designed for iPods, laptops, cell phones, digital cameras, PDAs, watch faces, GPS systems, gaming devices and other items.
On March 10th, ZAGG was upgraded to a Zacks Rank #1 (Strong Buy) after its Q4 16 earnings announcement (On March 7th) where management increased their FY 2017 revenue guidance above previous expectations; the new range of $470-500 million, up from the consensus of $456 million. The increase in revenue estimates was driven by new products, key launches, legacy products, and the Mophie acquisition. The company saw analysts increase their expected FY target prices after the announcement. The stock price closed at $6.85 on March 10th.
The company proceeded to beat both the Zacks consensus earnings and revenue estimates for the next two quarters. Further, management reiterated their FY 2017 revenue guidance each quarter which caused analysts to raise their earnings and revenue estimates once again. Three months after ZAGG became a Rank #1, the stock price was up +27% (on June 12th).
Then on November 1st, management announced Q3 17 earnings where they easily beat both the top and bottom line expectations for the third consecutive quarter. Further, management increased FY 2017 revenue guidance by another $20-30 million to a new range of $500-520 million. The performance in their wireless charge pads drove the new estimates. As one would expect, analysts raised their target prices once again, causing to the stock price to jump up even higher. As of the closing bell on November 17th, the stock was trading at $21.45, a +213% increase from when it first became a Zacks Rank #1 on March 10th.
The table below shows the price performance of ZAGG (in green), and the 12 month forward looking EPS estimate (in red) from when it became a Zacks Rank #1 till the close of the bell November 17th.
Overall, by utilizing the Zacks Ranking system, you can easily identify the elite stocks which are best positioned to beat the market on a consistent basis, and how to stay in those top stocks as they continue to grow.
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ZAGG Inc (ZAGG): Free Stock Analysis Report
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