Shikiho offers a compelling method for spotting emerging stars by analyzing consensus ratings.
Many investors are skeptical of analyst ratings, often questioning their objectivity. However, in a turbulent market, one effective way to spot stocks gaining genuine momentum is to focus on those with consistently improving consensus ratings.
Rather than relying on current high ratings—which often reflect already-realized expectations—this approach focuses on the trajectory of sentiment. Upgrades from ‘neutral’ or ‘sell’ to more favorable ratings can indicate a potential turnaround, strategic pivot, or improving fundamentals that the market has yet to fully recognize.
These gradual but steady upward rating trends can serve as early indicators of recovery or growth, hinting at undervalued opportunities before they catch the broader market’s eye.
Today’s screening seeks to extract these stocks which show the above characteristics using IBES rating*:
- Show month-over-month consensus rating improvements for the past three months.
- Have a positive forecast for 12-month net profit growth.
- Are followed by at least five analysts, ensuring forecast credibility.
*IBES ratings: smaller numbers are better
2.5 to 3.5: neutral
1.5 to 2.5: buy
The Table which is in the report available to my clients is the resulting selection of the stocks. Please become my client so that you will have access this table and many more!
While many of these in the table may already be familiar to you, feel free to let me know if there’s any you’d like to explore further.