Zacks.com Highlights: Enterprise Financial Services, LCI Industries, Simpson Manufacturing And Synlogic

For Immediate Release

Chicago, IL – Feb 1, 2018 - Stocks in this week’s article include: Enterprise Financial ServicesCorp (NASDAQ:EFSC) , LCI Industries (NYSE:LCII) , Simpson Manufacturing Co., Inc. (NYSE:SSD) and Synlogic, Inc. (NASDAQ:SYBX) .

Screen of the Week of Zacks Investment Research:

New Analyst Coverage Puts the Spotlight on These 4 Stocks

Most investors bank on research done by analysts to avoid inefficiencies triggered by lack of information. When it comes to coverage initiation, analysts naturally play a pivotal role.

Coverage initiation by analyst(s) on a stock usually portrays higher investor inclination. Investors, on their part, often assume there is something special in a stock to attract analysts’ attention. In other words, they believe that the company coming under the microscope definitely has some value.

Obviously, stocks are not randomly chosen to cover. New coverage on a stock usually reflects a reassuring future envisioned by the analyst(s). At times, increased investors’ focus on a stock motivates analysts to take a closer look at it. After all, who doesn’t love to produce something that is already in demand? Hence, we often find that analysts’ ratings on newly-added stocks are more favorable than their ratings on continuously covered stocks.

Needless to say, the average change in broker recommendation is preferred over a single recommendation change.

Influence on Stock Price

The price movement of a stock is generally a function of the recommendations on it from new analysts. Stocks typically see an upward price movement with a new analyst coverage compared to what they witness with a rating upgrade under an existing coverage. Positive recommendations — Buy and Strong Buy — generally lead to a significantly positive price reaction than Hold recommendations. On the contrary, analysts hardly initiate coverage with a Strong Sell or Sell recommendation.

Now, if an analyst gives a new recommendation on a company that has very few or no existing coverage, investors start paying more attention to it. Also, any new information attracts portfolio managers to build a position in the stock.

So, it’s a good strategy to bet on stocks that have seen increased analyst coverage over the last few weeks.

And that's what we're screening for today…

For the rest of this Screen of the Week article please visit Zacks.com at: Zacks Investment Research

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Written By: Zacks Investment Research