Bank of America (BAC) Boasts Earnings & Price Momentum: Should You Buy?
Finding strong, market-beating stocks with a positive earnings outlook becomes easier with the Focus List, a top feature of the Zacks Premium portfoli...
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Breaking Down the Zacks Focus List
If you could get access to a curated list of stocks to kickstart your investment portfolio, wouldn't you jump at the chance to take a peek?
Enter the Zacks Focus List. It's a portfolio made up of 50 stocks that are set to beat the market over the next 12 months; each company selected serves as a foundation for long-term investors looking to create an individual portfolio.
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The portfolio's past performance only solidifies why investors should consider it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500's return of 9.38%. Cumulatively, the portfolio has returned 2,519.23% while the S&P returned 854.95%. Returns are for the period of February 1, 1996 to March 31, 2021.
Focus List Methodology
When stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.
Earnings estimates are expectations of growth and profitability, and are determined by brokerage analysts. Together with company management, these analysts examine every aspect that may affect future earnings, like interest rates, the economy, and sector and industry optimism.
Investors also need to look at what a company will earn down the road. This is why earnings estimate revisions are so important.
Stocks that receive upward earnings estimate revisions are more likely to receive even more upward changes in the future. For example, if an analyst raised their estimates last month, they're more likely to do it again this month, and other analysts are likely to do the same.
Harnessing the power of earnings estimate revisions is where the Zacks Rank comes in. The Zacks Rank, which is a unique, proprietary stock-rating model, employs earnings estimate revisions to make it easier to build a winning portfolio.
Four primary factors make up the Zacks Rank: Agreement, Magnitude, Upside, and Surprise. Each is given a raw score that's recalculated every night and compiled into the Rank, and with this data, stocks are then classified into five groups, ranging from "Strong Buy" to "Strong Sell."
The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.
Because stock prices react to revisions, buying stocks with rising earnings estimates can be very profitable. Focus List stocks offer investors a great opportunity to get into companies whose future earnings estimates will be raised, potentially leading to price momentum.
Focus List Spotlight: Bank of America (BAC)
Headquartered in Charlotte, NC, Bank of America Corporation (incorporated in 1874) is one of the largest financial holding companies in the United States. With total assets worth $3.03 trillion as of Jun 30, 2021, it provides a diverse range of banking and non-banking financial services and products.
Since being added to the Focus List on January 9, 2017 at $22.68 per share, shares of BAC have increased 85.36% to $42.04. The stock is currently a #3 (Hold) on the Zacks Rank.
For fiscal 2021, seven analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.20 to $3.30. BAC boasts an average earnings surprise of 16.9%.
Earnings for BAC are forecasted to see growth of 76.5% for the current fiscal year as well.
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Bank of America Corporation (BAC): Free Stock Analysis Report
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