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Earnings Growth & Price Strength Make Tyson Foods (TSN) a Stock to Watch

Wondering how to pick strong, market-beating stocks for your investment portfolio? Look no further than the Zacks Focus List.

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This story originally appeared on Zacks

Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.

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The Zacks Premium service, which provides daily updates of the Zacks Rank and Zacks Industry Rank; full access to the Zacks #1 Rank List; Equity Research reports; and Premium stock screens like the Earnings ESP filter, makes these more manageable goals. All of the features can help you identify what stocks to buy, what to sell, and what are today's hottest industries.

It also includes the Focus List, a long-term portfolio of top stocks that have all the elements to beat the market.

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.

Additionally, each selection is accompanied by a full Zacks Analyst Report, something that makes the Focus List even more valuable. The report explains in detail why each stock was picked and why we believe it's good for the long-term.

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.

Brokerage analysts are in charge of determining a company's growth and profitability expectations, or earnings estimates. These analysts work together with company management to evaluate all factors that may affect future earnings, like interest rates, the economy, and sector and industry optimism.

Earnings estimate revisions are very important, since investors also need to take into consideration what a company will earn in the future.

When a stock receives upward earnings estimate revisions, it will likely get even more positive changes in the future. For instance, if an analyst raised their earnings outlook last month, they'll probably do so again this month, and other analysts will follow.

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: Tyson Foods (TSN)

Headquartered in Arkansas, Tyson Foods Inc. was founded in 1935. It is the biggest U.S. chicken company and produces, distributes and markets chicken, beef, pork as well as prepared foods. Its products are marketed and sold primarily by sales staff to grocery retailers, grocery wholesalers, meat distributors, military commissaries, industrial food processing companies, chain restaurants, international export companies and domestic distributors.

Since being added to the Focus List on September 19, 2016 at $65.58 per share, shares of TSN have increased 25.79% to $80.20. The stock is currently a #3 (Hold) on the Zacks Rank.

For fiscal 2021, three analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.59 to $8.03. TSN boasts an average earnings surprise of 38.4%.

Additionally, TSN's earnings are expected to grow 42.4% for the current fiscal year.

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