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Michael Michaud is the founder of Invest2Success.com (http://www.invest2success.com/) and the Invest2Success Blog (http://invest2success.blogspot.com/). He has been investing and trading in the financial markets since 1989. He founded Invest2Success.com to empower individual institutional... More
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  • Top Ranked Stock Sectors 0 comments
    May 15, 2013 5:44 AM | about stocks: RYL, OA, STT, IDA, SMP

    By Zacks Investment Research Earnings Estimates Stock Rank

    It's that time again. Every few months, I like running this screen to see which Sectors are considered the best Sectors.

    Since roughly half of a stock's price move can be directly attributed to the group that it's in, it's important to stay on top of which groups are the best ones.

    And with the brunt of earnings season having just completed, some new groups have found their way on this list.

    In my testing, I have found that getting into an average stock in a strong group will oftentimes outperform even the best stocks in a troubled group.

    Put the Odds on Your Side

    Just because stocks in the best groups have a tendency to outperform doesn't mean you can just pick anything and make money. Far from it. But it illustrates how powerful the underlying group is to the success of your stock picking.

    There are several ways you can define the best Sectors or Industries.

    Today, I'm going to focus on just the Zacks Rank. The best Zacks Rank stocks, on average, nearly triple the market each year. And a sector or Industry is simply a group of stocks in similar businesses. So looking at the average Zacks Rank for all of the stocks in that group will tell you if that group as a whole is enjoying good times or bad.

    Stocks that receive upward earnings estimate revisions have a tendency of receiving even more upward earnings estimate revisions. And that leads to an increase in price.

    So the better the average Zacks Rank is for the Sector, the better the chances that your stocks have a top Zacks Rank, and move higher.

    And given the uneasiness of the market at these new highs, this is something everyone can use right now.

    The Top 5 Zacks Ranked Sectors

    Currently, the top 5 Zacks Ranked sectors are:

    1) Construction - Average Zacks Rank 2.74

    2) Aerospace - Average Zacks Rank 2.81

    3) Finance - Average Zacks Rank 2.82

    4) Utilities - Average Zacks Rank 2.88

    5) Auto/Tires/Trucks - Average Zacks Rank 2.91

    And here are 5 stocks, each from one of the top 5 Zacks Ranked sectors:

    (NYSE:RYL) Ryland Group Inc. - Construction

    ( ATK ) Alliant Techsystems Inc. - Aerospace

    (NYSE:STT) State Street Corp. - Finance

    (NYSE:IDA) IdaCorp, Inc. - Utilities

    (NYSE:SMP) Standard Motor Products Inc. - Auto/Tires/Trucks

    All of these stocks are in the top 5 Sectors as defined by the average Zacks Rank, and they all look set to outperform.

    Start picking stocks in the best Sectors and Industries on your own today. It's easy to do with the Research Wizard. Start putting the odds of success in your favor.

    Click Here to Review More Stock Picking Advisory Services

    Stocks: RYL, OA, STT, IDA, SMP
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