The picture emerging from the third-quarter 2025 earnings season has been a huge positive for the broader equity markets, despite the prolonged government shutdown. The recent rate cut by the Federal Reserve marked the second time this year that rates have been reduced. Relatively lower rates will increase borrowing and boost market liquidity, driving deal volumes and trading opportunities. However, concerns related to the increasing valuation of AI firms persist.
Given this volatile scenario, choosing appropriate stocks for a portfolio to achieve impressive returns may not be possible for individual investors. One way forward is to pay heed to broker advice. Brokers are considered experts in investing. Brokers gain valuable insights into companies through direct interactions with senior management, careful analysis of public disclosures and active participation in earnings calls, enabling them to make informed recommendations for investors. Broker-friendly stocks like Par Pacific Holdings PARR, General Motors GM, American Airlines AAL, Allegiant Travel Company ALGT and Dana Incorporated DAN should be monitored for healthy returns.
We have designed a screen to shortlist stocks based on improving analyst recommendations and upward estimate revisions over the last 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 concerning this ratio).
Current 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:
