I’m currently enjoying a free trial to Zacks Elite and Research Wizard. I remember seeing Zacks being advertised all over the place in the mid-90s, but I hadn’t really looked at the service for quite some time until I was recently contacted by them to try out their premium services. You too can try out Zacks Elite for free by visiting this link. I’m hoping some of you also try this service out with me so you can share your thoughts with me on this service while I explore it.
The main feature of ZacksElite is their Zacks Rank, which is based on consensus earnings per share (EPS) estimates from brokers. I’m not a big fan of these so called Sell-Side analyst estimates, so I am coming into my review of ZacksElite with a bias. The Zacks Rank is calculated from four primary inputs: agreement, magnitude, upside, and surprise. This means that much of the rank is based on relative changes in brokerage analysts EPS estimates, which might make this metric a bit more robust. However, humans and especially professionals tend to seek consensus based on the herd mentality of most mammals. Therefore, you tend to find estimates all cluster around each other regardless if they are all wrong.
Leaving the Zacks Rank aside, I did notice that there is also Zacks Recommendation based on both a qualitative model to predict prices and analyst recommendations from the Zacks Equity Research division. I believe that Zacks Recommendation is used to develop the Zacks Focus list, which is a diverse portfolio of stocks from different industries and market caps expected to outperform the market over the next 12 months. This list is then broken down further each week into Targeted Recommendations. Tuesdays, ZacksElite issues targeted recommendations for “Value Stocks”.
I thought you might be interested in looking at this week’s Value Stocks Targeted Recommendations list. I’m having a lot of trouble finding value opportunities, so I was interested to see what ZackElite has come up with. This week they targeted U.S. Steel (X) and Wellpoint (WLP). I’m not particularly interested in commodity companies like U.S. Steel but Wellpoint is a health insurer that could be promising. It was even featured in this past weekend’s Barron’s. Listed below are all the other stocks within the Focus List with the cheapest valuations:
Zacks Featured Target: Value Stocks
What are your thoughts on these stocks? Please share your thoughts below on this Focus List and on the ZacksElite service in general.
Full Disclosure: I do not own any of the stock mentioned in this post. I am receiving a free trial to ZacksElite and Research Wizard, but I am not receiving an compensation for this review.