5 Broker-Adored Stocks to Watch as Iran-U.S. Tensions Refuse to Fade

There seems to be no end in sight as far as the tensions between Iran and the United States are concerned. The United States has threatened to impose new sanctions that aim to block all potential sources of revenues for Iran. Oil prices have been surging once again on fears that the Middle East crisis could continue for a longer period.

Moreover, the weak July jobs data has reduced the likelihood of the Fed raising interest rates at its September meeting to curb the stubborn inflation in the United States. However, higher oil prices could lead to a further spike in inflation, which will compel the Fed to hike interest rates.

This uncertain environment has made it increasingly difficult for individual investors to construct a stock portfolio that consistently delivers strong performance. Choosing the wrong stocks can hurt returns and compromise the objective of growing hard-earned savings in an inherently unpredictable market.

So, how should investors navigate these conditions? One strategy is to follow broker recommendations and monitor broker-favored stocks such as Centene Corporation CNC, Archer-Daniels-Midland Company ADM, Avnet AVT, Arrow Electronics ARW and AMN Healthcare Services AMN.

To identify promising opportunities, we have developed a screening strategy that focuses on stocks benefiting from improved analyst ratings and upward earnings estimate revisions over the past four weeks. In addition, the price-to-sales (P/S) ratio has been incorporated as a complementary valuation measure, given its effectiveness alongside broker insights. By emphasizing a company’s revenue performance, the P/S ratio helps create a more balanced and comprehensive investment approach.

Screening Parameters    

# (Up- Down Rating)/ Total (4 weeks) =Top #75 (This gives the list of top 75 companies that have witnessed net upgrades over the last 4 weeks).

% change in Q (1) est. (4 weeks) = Top #10 (This gives the top 10 stocks that have witnessed earnings estimate revisions over the past 4 weeks for the upcoming quarter).

Price-to-Sales = Bot%10 (The lower the ratio, the better. Companies meeting this criterion are in the bottom 10% of our universe of over 7,700 stocks concerning this ratio).

Current Price greater than 5 (as a stock trading below $5 is unlikely to create significant interest for most investors).

Average Daily Volume greater than 100,000 shares over the last 20 trading days (Volume has to be significant to ensure that these are easily traded).

Market value ($ mil) = Top #3000 (This gives us stocks that are the top 3000 in terms of market capitalization).

Com/ADR/Canadian= Com (This eliminates the ADR and Canadian stocks).

Here are five of the 10 stocks that made it through the screen:

Centene Corporation is a well-diversified healthcare company that primarily provides services to government-sponsored healthcare programs, while also serving underinsured and uninsured individuals through member-focused services.

CNC is also engaged in providing education and outreach programs to inform and assist members in accessing quality, appropriate healthcare services. Centene operates a capitated managed-care model, under which it receives a fixed payment per member per month from government programs such as Medicaid, Medicare and ACA Marketplace plans. The company, currently sporting a Zacks Rank #1 (Strong Buy), beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The average beat is 157.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.

ArcherDaniels is strengthening its presence in food innovation through investments in natural ingredients, plant proteins and emerging production technologies. The company is expanding its natural-colors footprint as food manufacturers move from artificial to natural ingredients. ADM has already signed contracts to convert artificial red, yellow, and orange shades to natural alternatives across a packaged-food line and flavored beverages.

Precision fermentation represents another area of development for this Zacks Rank #1 company. Archer Daniels is also planning at least one natural color produced through precision fermentation. The company beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The average beat is 11.3%.

Avnet is one of the world’s largest distributors of electronic components and computer products. Broader demand, value-added mix, Farnell recovery, operating leverage, working-capital discipline and deleveraging support Avnet’s earnings and shareholder returns over time.

The Zacks Consensus Estimate for AVT’s fiscal 2027 sales and EPS implies year-over-year growth of 24% and 84.3%, respectively. Avnet currently sports a Zacks Rank #1. 

Arrow Electronics is well positioned to benefit from demand across electronic components and enterprise computing solutions, supported by its role as a key distribution partner, strong engineering services and expertise in high-performance computing.

Its diversified customer base across industries and geographies reduces concentration risk, while digital capabilities, value-added offerings and disciplined capital allocation strengthen customer relationships, improve operating efficiency and financial flexibility. The company, currently sporting a Zacks Rank #1, outpaced the Zacks Consensus Estimate for earnings in each of the last four quarters. The average beat is 34.4%.

AMN Healthcare Services, a leader and innovator in total talent solutions for healthcare, carries a Zacks Rank #3 (Hold) presently. The company has a trailing four-quarter earnings surprise of 96.6%, on average. 

Shares of AMN have surged 119% year to date. Changes in demand for healthcare services, particularly at acute care hospitals and other inpatient facilities, continue to boost demand for AMN Healthcare’s services. The company’s business is supported by long-term structural drivers, including population growth, aging demographics and the increasing complexity of care delivery.

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This article originally published on Zacks Investment Research (zacks.com).

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