Zacks Awards 5 Stars to Top Stock Pickers of 2015

CHICAGO, April 5, 2016 /PRNewswire/ -- The old adage, "It's a market of stocks and not a stock market," seems to be an appropriate description of the market these days. Picking winning stocks has never been an easy task. But given all the headwinds and constantly changing dynamics hitting the market, it's an even bigger challenge for analysts. Last year, 2015 stock investing wasn't easy anywhere. "Even to broad Health Care sector investors -- a perennial overweight sector due to its aging demographics tailwind— it was crummy," says John Blank, Chief Equity Strategist at Zacks Investment Research.  "The major large cap Health Care ETFs logged in negative annual returns for 2015.  Losing money isn't any fun."  However, interestingly, Zacks top analysts in 2015 were found mostly in Drugs and Biotech. They delivered active annual returns of between +35% and +59.8%

There is more than one lesson here. What makes a great investor is following the best stock pickers. So what makes a great stock picker?  Blank, who also manages Zacks International Trader service and portfolio, has more than just a theoretical opinion here. "My thoughts --and likely this Zacks top analyst list confirms-- you need experience in the stock picking game. A great analyst needs to learn firsthand from the rough-and-tumble of the existing system.  Practical insights trump theory.  For capturing stock ticker Alpha in the face on no stock market Beta, a great analyst needs to become a great hunter in the field."  Blank adds, "They need to know the trading patterns of actively traded stock names well. They must track closely the companies, to know their management and the quality of their strategies in the marketplace, and to evaluate their core products, with valuable insights into what happens in the near future.  It is not enough to pick great companies. You must pick their stocks at times of weakness AND sell them off when the good fundamental EPS and revenue growth news is fully priced in.  That's a skill only time in the game delivers".

Zacks Investment Research analyzes the performance of the stock recommendations made by brokerage analysts on an ongoing basis.  "Analysts who are objectively determined to be at the top of their game, receive the prestigious title of "All-Star", with the 5 Star ranking being the best of the best," explains Adam Cohen, VP of Institutional Services at Zacks. 

Of all of the brokerage analysts that have been awarded the 5 Star ranking, the Top 10, 5 Star Analysts for Year-End 2015 Include…

Cohen adds, "Analyst performance is measured by the return an investor would have achieved if they followed the analyst's recommendations. To be eligible for star rankings in an industry, analysts must have made at least 5 simultaneous recommendations for companies within that industry during the year. The Zacks Stars are assigned to an analyst in an industry based on the performance of a hypothetical model portfolio which includes, at any time, all stocks in the industry rated by the analyst.  All stocks in an analyst's portfolio are given equal weight. It is assumed that their portfolio begins each year with an equal amount of money invested in each of the stocks recommended by the analyst at the beginning of the year. Portfolio holdings are rebalanced to equally weighted positions at the end of trading days on which a stock recommendation is changed in the portfolio. Portfolio returns include capital gains and dividends." 

The data shows there continues to be a select group of brokerage analysts who are still able to identify the stocks most likely to outperform the market.

Zacks Investment Research, Inc., A Chicago based provider of independent equity research, has been conducting this survey since 1978. Zacks Investment Research, Inc., developed the concept of the EPS Surprise and created the first quantitative model to predict stock prices based on patterns, estimate revisions and surprises, called the Zacks Rank. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. To learn more about Zacks Investment Research go to http://www.zacks.com.

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Terry Ruffolo
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SOURCE Zacks Investment Research, Inc.

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