Chicago-based Zacks Investment Research believes earnings estimate revisions are the most powerful force impacting stock prices.
Chicago-based Zacks Investment Research announced today that it had added drug maker Teva (Nasdaq: TEVA) to its “Strong Buy” Zacks #1 Ranked list. Zacks said stocks on the list had produced an average annual return of 34% since its inception in 1980, adding that the list was up 11.9% through July 1, 2002.
Zacks added Teva to its number 1 list after the company saw its second quarter earnings jump by more than 40% with a revenue advance of 11%.
“However, analysts really took notice when the company promised to perform as well or better in the third quarter. In the past month, estimates have improved by about 11 cents for this year and eight cents for next. With drug patents running out continually, Teva finds itself in a good position to continue its growth,” Zacks said.
Zacks Investment Research was formed in 1978, and distributes investment research to both institutional and individual investors. The Zacks Rank system is based on the theory that earnings estimate revisions are the most powerful force impacting stock prices. Zacks has as many “Strong Sell” recommendations (Zacks Rank #5) as Strong Buy recommendations (Zacks Rank #1). Since 1980, the #5 ranked “Strong Sells” have underperformed the S&P 500 by 89.8% annually, Zacks said.
Published by Globes [online] - www.globes.co.il - on 15 August, 2002