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JimDean |
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Owner/Admin Posts: 3922     Location: USA: GA, Lawrenceville | |||
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| JimDean |
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Owner/Admin Posts: 3922 Location: USA: GA, Lawrenceville | Here are some handy snapshots of the Industry layouts ... and a Zacks-sourced alphabetical PDF with notes at the end (from Barry) explaining the Nirvana implementation and ZG######### "Symbols" names. Source: http://www.zacksdata.com/data/zacks-sector-industry-classification/ ... the Zacks symbol-counts on the far right will change with time, and MGs to some degree ... ... OmniScan omits the few Expanded Zacks Groups and SubGroups, that have no symbols ... (Zacks Industries Map (02mar20).png) (MG Industries Map (02mar20).png) Attachments  Zacks Sector Industry Mapping Scheme.pdf (182KB - 6 downloads) Zacks Industries Map (02mar20).png (345KB - 7 downloads) MG Industries Map (02mar20).png (274KB - 6 downloads) | ||
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| JimDean |
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Owner/Admin Posts: 3922 Location: USA: GA, Lawrenceville | Zacks offers a "marketing-flavored" document explaining their Ranks ... you can download the complete PDF from this link: https://www.zacks.com/education/stock-education Here are some extracts from it that might be helpful, relative to what Nirvana offers from Zacks. I've left out marketing blurb, info specific to using their webpages (although the OT Chart "Research" Tab includes a lot of that), and most examples and graphics, but left explanations, for conciseness ... pdf is 26 pages ... I've added bolding to highlight key points ... "Earnings estimate revisions are the most powerful force impacting stock prices." Stocks with rising earnings estimates have significantly outperformed the S&P 500 year after year. While stocks with falling earnings estimates have underperformed the S&P 500 year after year. This means the stocks most likely to outperform are the ones whose earnings estimates are being raised. And the stocks most likely to underperform are the ones whose earnings estimates are being lowered. Zacks and the Zacks Rank In 1978, Zacks Investment Research was formed to compile and analyze brokerage research for both institutional and individual investors. Today, Zacks processes this information from roughly 3,000 analysts at over 150 different brokerage firms. At any given point in time, we're monitoring well over 200,000 earnings estimates and other related data looking for any change. The Zacks Rank uses four factors related to earnings estimates to classify stocks into five groups, ranging from "Strong Buy" to "Strong Sell". More importantly, it allows individual investors to take advantage of trends in earnings estimate revisions, and benefit from the power of institutional investors. The Influence of Institutional Investors Institutional investors are the professionals who manage the trillions of dollars invested in mutual funds, investment banks, hedge funds, etc. Studies have shown that institutional investors can and do move the market due to the large amounts of money they invest with. Because of this, the market has a tendency to move in the same direction as these institutional investors. How Institutional Investors Use Earnings Estimate Revisions Most institutional investors attended prestigious business schools where they were taught a number of classical financial models, many of which were designed to calculate the fair value of a company and of its shares. Almost without exception, these valuation models focus on earnings and earnings estimates. Very simply, if you raise the earnings estimates used in the model, then it will create a higher fair value for the company and its stock price. Institutional investors then act on these changes in earnings estimates, typically buying those with rising earnings estimates and selling those with falling earnings estimates ... an increase in the earnings estimates can translate into a higher price for the stock and bigger gains for the investor. And since it can often take weeks, if not months, for an institutional investor to build a position (given their size), the individual investor who can get in at the first sign of upward earnings estimate revisions (e.g., new Zacks Rank #1s), has a distinct advantage over these larger investors, and can benefit by the expected institutional buying that will follow. Where Do Earnings Estimates Come From? The best and most widely used source of earnings estimates comes from the brokerage analysts who track these publicly traded firms. These analysts work hand in hand with company management, and independently, to analyze every aspect that may affect future earnings. The typical analyst at a brokerage firm will work 80 hour weeks, devoting all his or her time to, at most, maybe 20 companies. And many companies are followed by 5 to 10 analysts or more (30 or 40 for the biggest ones). One of their main tasks is to determine what a company's earnings will be. This is where they excel; not in their ratings, but in their earnings estimates (also known as earnings per share or EPS estimates). Consensus Estimates From these individual analyst estimates, Zacks creates a consensus EPS estimate, which is the average of all estimates made within the last 120 days (older estimates are not included). Zacks calculates this consensus estimate for each of the next four quarters, each of the next three years, and as a growth rate over the next five years. These consensus estimates are the benchmark by which the company will be judged by the investment community. Earnings Estimate Revisions When trying to determine the future direction of a stock's price move, you need to look at what a company will earn in the future. This is why earnings expectations or earnings estimates are so important. And it's the change in the earnings estimates (earnings estimate revisions) that have proven to be the most important. This is because stocks that receive upward earnings estimate revisions are more likely to receive even more upward earnings estimate revisions in the future. This is true because many analysts will revise their earnings estimate slowly and incrementally. For example, if an analyst raised his earnings estimates last month, he's more likely to do it again this month, and the other analysts are likely to do the same Since stock prices respond to earnings estimate revisions, it's very profitable to buy stocks whose earnings estimates are being raised. And by getting into stocks whose earnings estimates are being raised, you're likely getting into companies whose future earnings estimates will be raised as well, potentially influencing stock prices even more. Zacks Rank Performance Given the sheer number of earnings estimate revisions made on a daily basis, it can be very difficult to determine which stocks to buy and which ones to avoid. The Zacks Rank solves this problem by helping investors harness the power of earnings estimate revisions to invest more successfully. The Zacks Rank is a proprietary stock-rating model that uses trends in earnings estimate revisions and EPS surprises to classify stocks into five groups: 1. Strong Buy, 2. Buy, 3. Hold, 4. Sell, 5. Strong Sell (... see snapshots below ...) Four Factors Behind the Zacks Rank The Zacks Rank is calculated from four primary inputs: Agreement, Magnitude, Upside and Surprise. A. Agreement This is the extent to which all brokerage analysts are revising their earnings estimates in the same direction. The greater the percentage of analysts that are revising their estimates higher, the better the score will be for this component. If 40% of the analysts are increasing their earnings estimates for a stock, whereas only 10% are increasing it for another stock, the higher the percentage of analysts making upward estimate revisions the better. B. Magnitude This is the size of the recent change in the current consensus estimate for the fiscal year and the next fiscal year. A 5% increase in the earnings estimate revision is better than a 2% increase in the earnings estimate revision and will thus get a better score for this component. C. Upside This is the difference between the most accurate estimate as calculated by Zacks and the consensus estimate. A bigger difference between the most accurate estimate and the consensus estimate is better. D. Surprise The Zacks Rank factors in the last few quarters' earnings per share (EPS) surprise as well. Companies with a positive earnings surprise are more likely to surprise again in the future. Each one of these components is given a raw score and it is recalculated every night. These raw scores are then compiled into the Zacks Rank and is made available to investors every day. This has made the process of identifying stocks with changing earnings estimates easy and very profitable, helping investors beat the market no matter what the market is doing. Points made from PDF examples: Simply put, when earning estimates are going up, the stock should go up as well. And your best first alert that a company's outlook is improving, is a Zacks Rank of 1. Rising earnings estimates and rising prices go hand in hand. And the Zacks Rank makes these stocks easy to find. Once you're in a stock destined for greatness it's important to not get bucked off. But if earnings estimates continue to rise, that will give investors plenty of reason to push the stock higher, and keep you on board the entire time. The previous trading examples illustrate how the Zacks Rank can get you in on some of the most profitable opportunities over the short-term (1-3 month period). The Zacks Rank has proven to be an excellent timing indicator. Short-term gains like these are taking place all the time and illustrate how the Zacks Rank #1 stocks have produced a +24.5% annual return. But it's also great for getting into stocks that develop into longer-term trades and core holdings. By following the Zacks Rank and the trajectory of earnings estimate revisions, not only will you know when to buy, but also learn how to ride your best stocks for bigger gains. And when the time comes, know when to sell. Integrating the Zacks Rank Into Your Investing Strategies The Zacks Rank works well with all investment strategies and styles and can help improve performance. Here are suggestions on how to use the Zacks Rank with the four main investment styles: A. Momentum, B. Aggressive Growth, C. Value, and D. Growth & Income A. Momentum Traders and Investors Momentum Traders and Investors look to take advantage of upward trends (or downward trends) in a stock's price or earnings. Momentum traders believe that these stocks will continue to head in the same direction because of the momentum that is already behind them. We've all heard the old adage, "the trend is your friend." And who doesn't like riding a trend? In fact, studies have shown that stocks making new highs have a tendency of making even higher highs. The Zacks Rank #1 stocks are ideally suited for folks who rely on momentum or technical analysis because it can tip them off before most other systems. Rather than simply looking for price trends, the Zacks Rank is about "cause and effect". The cause of the move is positive revisions in earnings estimates. This upward shift in earnings estimates prompts more and more investors to take an interest in the company with the effect being that the shares in the company start on a bull run. Volume increases, as does the stock price. But simply relying on price movement alone often doesn't alert investors until after the move has already begun, costing active traders opportunities to maximize profits. Conversely, by focusing on earnings estimate revisions, the Zacks Rank can identify stocks that are likely to move upward in the future - before the breakout has occurred! In other words, the Zacks Rank helps traders get in ahead of the action. B. Aggressive Growth Traders Aggressive Growth Traders are primarily focused on stocks with aggressive earnings growth (or at least the potential for aggressive growth), which should propel their stock price higher in the future. You'll often find smaller-cap stocks in this category because these are typically newer companies that are in the early part of their growth cycle. But you'll also find plenty of mid-caps and large-caps too. By concentrating on Zacks Rank #1 stocks, growth investors can easily screen for companies exhibiting these stellar growth rates with a likelihood of it continuing. The best part of the Zacks Rank is its ability to alert investors, at the earliest stages, that a company's prospects are looking very bright. And getting in early on an emerging growth story generally leads to strong investment returns. Many growth investors, however, make the mistake of looking for those with the highest growth rates possible. Unfortunately, many such companies underperform in spite of their outsized growth rates. A company with a 500% growth rate, that just received a downward estimate revision and now 'only' has a 400% growth rate, may still look good on the surface, but the growth rate was just reduced by a significant amount and therefore could see a price correction. The Zacks Rank, which focuses on earnings estimate revisions, notifies investors at the first sign of weakness (Zacks Rank of 4 or 5), providing the opportunity to lock-in profits and avoid unnecessary losses. C. Value Investors Value Investors are looking for good stocks at great prices. This does not mean they have to be cheap stocks in price however. The key is the belief that they are undervalued. That they are trading under their true value, i.e., 'fair value', or potential. And the value investor hopes to get in before the market corrects in the price, or in other words, goes higher. Many institutional investors focus on this very thing. Zacks Rank #1s and #2s signal that earnings estimates are on the rise, prompting investors to view the stock as being undervalued relative to its future earnings prospects, and in turn, drive prices even higher. Typical value investors will look at valuations like P/E ratios, PEG ratios, Price to Book ratios, etc. Too many 'value' stocks, however, have low valuations because they don't have compelling enough earnings or growth rates to speak of. The key for value investors is really earnings, which is the basis of most valuation models. When the Zacks Rank signals a "Strong Buy" or "Buy" (Zacks Rank #1 or #2), that means earnings estimates for a stock are rising. Given this new information, other investors will likely view the stock as being undervalued relative to its future prospects. So, they jump in, which in turn drives the price of the stock higher. The beauty of the Zacks Rank is that it is also a timeliness indicator, meaning that value investors can use it to identify precisely when a company's prospects are beginning to improve as opposed to waiting and waiting for business conditions to improve. And nothing can make an investor sit up and take notice of a stock faster than rising earnings estimates. Although, one should plan on holding onto these value gems a little longer than a typical Growth or Momentum investor, and consider keeping it as long as it remains a Zacks Rank #3 or better, and its other characteristics remain attractive, to maximize the upside returns. D. Growth and Income Investors Growth and Income Investors are generally looking for companies with solid revenue and that pay a good dividend. Oftentimes, these companies are more mature, larger-cap companies that pass along a portion of their earnings to their shareholders in the form of a dividend. Some of these companies may not have the kinds of spectacular growth rates like some of the younger or smaller companies have (or like they themselves had when they were younger and earlier in their growth cycle). But many of these companies are generating huge amounts of cash, but because of their size, may not have the growth opportunities they once had. The key ingredients, however, for a growth & income investor, are the fundamentals such as earnings growth, strong management/leadership, excellent products and a competitive strategy. The most tangible proof that a company is worth holding for the long term is earnings and earnings growth. Not necessarily explosive growth, but steady and consistent growth. A company that has strong management and excellent products should be producing a steady stream of positive earnings estimate revisions. Here again earnings estimate revisions are the cornerstone of the Zacks Rank. Whenever you find positive earnings revisions, you will generally find a company moving in the right direction, and that is a candidate for long-term ownership. There may be fewer of these stocks in the Zacks Rank #1 group, but there will be plenty of #2s, and you might even consider some #3s for the larger-cap companies. But a decline to a Zacks Rank #4 or #5 can be an early warning that business conditions are worsening and therefore that it is time to take profits and get out. ... again, the info above is extracted from the Zacks PDF (see link above) ... I've only added some bolding, and a few "A,B,C" labels to assist with reading ... I've left out most marketing and examples info ... (Zacks Five Classifications.png) (Zacks Perf 1988-2020.png) Attachments Zacks Five Classifications.png (178KB - 0 downloads) Zacks Perf 1988-2020.png (578KB - 1 downloads) | ||
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| JimDean |
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Owner/Admin Posts: 3922 Location: USA: GA, Lawrenceville | OmniTrader plots use dynamic (vertical) scaling ... the y-axis scale is optimized to cover the minimum-to-maximum values that appear for that symbol, in the selected date-range. The snapshot below shows Quick Indicator plots of ZIR and ZR ... function-calls ZIndRank() and ZRank(). Note that they are zero until July 10,2019 ... that's the earliest data that Nirvana was able to get Zacks to provide them, but as time progresses, the back-history will grow. After that date, any symbol that Zacks rates will have nonzero values ... keep in mind that there are only ~5500 symbols within the Zacks rating system, out of the >10k symbols that OmniScan provides access to. So, many symbols will have flatline plots, and zeros in the ZR and ZIR focus list columns. Zanks Rank varies from 1-5, and is specific to that stock. Zacks Industry Rank max value "appears" to be 254 (from FL ZIR column sort) .. but might be as high as 259 or 289 (see initial post re N mappings of Z industries). Refer to the prior post's writeup for explanation of ZR. ZIR *appears* to be the rank of the plotted-symbol's Industry (N calls it a SubGroup) amongst all the other Industries (N offers a subset of them, leaving out a few that have no symbols ... see initial post of this thread). Tools > Options > OmniScan tab needs to have the "Download Premium Subscriptions" option checked, in order for the ZR and ZIR info to be updated when ToDo is run. It appears that, starting in Dec 2020, access to Zacks ZR and ZIR will have a $120/year subscription fee (free initially) ... however the Zacks Industry Group mappings, like MG's, will continue to be provided in conjunction with OmniData+OmniScan at no additional charge. (Plot of ZR & ZIR for IBM.png) Attachments Plot of ZR & ZIR for IBM.png (40KB - 0 downloads) | ||
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| JimDean |
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Owner/Admin Posts: 3922 Location: USA: GA, Lawrenceville | |||
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| MarkHolstius |
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Veteran Posts: 209 Location: USA: IL, Sleepy Hollow | |||
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| Owner of site: Jim Dean -- Forum content is confidential, and may not be distributed without written permission. | |
