Inflation is showing signs of cooling, while consumer spending is increasing. U.S. consumer prices increased less than expected in May as cheaper gasoline partially offset higher rents. This was the fourth consecutive month when the core inflation rise was less than expected. Consumer confidence rebounded in May, indicating that people now have more faith in the economy’s prospects.
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Trade negotiations with several countries are ongoing. In this brightening scenario, monitoring broker-favorite stocks like BrightSpring Health Services BTSG, Allegiant Travel ALGT, CVR Energy CVI, Alta Equipment Group ALTG and Cracker Barrel Old Country Store CBRL appears prudent.
We have designed a screen to shortlist stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks. Also, since the price/sales ratio is a strong complementary valuation metric in the presence of broker information, it has been included. The price/sales ratio takes care of the company’s top line, making the strategy a well-rounded one.
# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks).
% change in Q (1) est. (4 weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter).
Price-to-Sales = Bot%10 (The lower the ratio, the better. Companies meeting this criterion are in the bottom 10% of our universe of over 7,700 stocks with respect to this ratio).
Price greater than 5 (as a stock trading below $5 will not likely create significant interest for most of the investors).
Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).
Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).
Com/ADR/Canadian= Com (This eliminates the ADR and Canadian stocks).
Here are five of the 10 stocks that made it through the screen:
BrightSpring: The company provides complementary and integrated home- and community-based pharmacy and health solutions for complex populations in need of specialized and/or chronic care. Through BTSG’s service lines, including pharmacy, home health care and primary care, rehabilitation, and behavioral health, the company provides comprehensive care and clinical solutions in all 50 states to over 400,000 customers, clients, and patients daily.
BrightSpring’s 2025 earnings growth rate is pegged at 96.4%. The Zacks Consensus Estimate for BTSG’s 2025 sales indicates a rise of 9.1% from 2024’s actuals. The stock carries a Zacks Rank #2 (Buy) currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
