Advertisement
Canada markets open in 7 hours 36 minutes

  • S&P/TSX

    21,873.72
    -138.00 (-0.63%)
     

  • S&P 500

    5,071.63
    +1.08 (+0.02%)
     

  • DOW

    38,460.92
    -42.77 (-0.11%)
     

  • CAD/USD

    0.7305
    +0.0008 (+0.11%)
     

  • CRUDE OIL

    82.95
    +0.14 (+0.17%)
     

  • Bitcoin CAD

    87,970.61
    -3,416.34 (-3.74%)
     

  • CMC Crypto 200

    1,389.55
    -34.55 (-2.43%)
     

  • GOLD FUTURES

    2,329.30
    -9.10 (-0.39%)
     

  • RUSSELL 2000

    1,995.43
    -7.22 (-0.36%)
     

  • 10-Yr Bond

    4.6520
    -4.5980 (-49.71%)
     

  • NASDAQ futures

    17,435.75
    -228.75 (-1.29%)
     

  • VOLATILITY

    15.97
    +0.28 (+1.78%)
     

  • FTSE

    8,040.38
    -4.43 (-0.06%)
     

  • NIKKEI 225

    37,632.63
    -827.45 (-2.15%)
     

  • CAD/EUR

    0.6817
    -0.0002 (-0.03%)
     

Why Square (SQ) is a Top Stock for the Long-Term

Zacks Equity Research
·4 min read

Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.

The Zacks Premium service, which provides daily updates of the Zacks Rank and Zacks Industry Rank; full access to the Zacks #1 Rank List; Equity Research reports; and Premium stock screens like the Earnings ESP filter, makes these more manageable goals. All of the features can help you identify what stocks to buy, what to sell, and what are today's hottest industries.

Also included in Zacks Premium is the Focus List. This is a long-term portfolio of top stocks that have all the traits to beat the market.

Breaking Down the Zacks Focus List

If you could get access to a curated list of stocks to kickstart your investment portfolio, wouldn't you jump at the chance to take a peek?

ADVERTISEMENT

That's what the Zacks Focus List offers. It's a portfolio of 50 stocks that serve as a starting point for long-term investors to build their individual portfolios. The stocks included in the list are set to outperform the market over the next 12 months.

One thing that makes the Focus List even more advantageous is that each pick comes with a full Zacks Analyst Report. This helps explain why each stock was selected and why we believe it's a good pick for the long-term.

The portfolio's past performance only solidifies why investors should consider it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500's return of 9.38%. Cumulatively, the portfolio has returned 2,519.23% while the S&P returned 854.95%. Returns are for the period of February 1, 1996 to March 31, 2021.

Focus List Methodology

When stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.

Earnings estimates, or expectations of growth and profitability, come from brokerage analysts who track publicly traded companies; these analysts work together with company management to analyze every aspect that may affect future earnings, like interest rates, the economy, and sector and industry optimism.

Earnings estimate revisions are very important, since investors also need to take into consideration what a company will earn in the future.

Stocks that receive upward earnings estimate revisions are more likely to receive even more upward changes in the future. For example, if an analyst raised their estimates last month, they're more likely to do it again this month, and other analysts are likely to do the same.

Utilizing the power of earnings estimate revisions is when the Zacks Rank joins the party. A unique, proprietary stock-rating model, the Zacks Rank uses changes to quarterly earnings expectations to help investors create a winning portfolio.

Four primary factors make up the Zacks Rank: Agreement, Magnitude, Upside, and Surprise. Each is given a raw score that's recalculated every night and compiled into the Rank, and with this data, stocks are then classified into five groups, ranging from "Strong Buy" to "Strong Sell."

The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.

Because stock prices react to revisions, buying stocks with rising earnings estimates can be very profitable. Focus List stocks offer investors a great opportunity to get into companies whose future earnings estimates will be raised, potentially leading to price momentum.

Focus List Spotlight: Square (SQ)

Headquartered in San Francisco, CA, Square, Inc. was incorporated in 2015. The company offers financial and marketing services through its comprehensive commerce ecosystem that helps sellers to start, run and grow their businesses.

SQ, a #3 (Hold) stock, was added to the Focus List on March 28, 2017 at $17.25 per share. Since then, shares have increased 1283.77% to $238.70.

For fiscal 2021, 10 analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.32 to $1.50. SQ boasts an average earnings surprise of 173.9%.

Additionally, SQ's earnings are expected to grow 78.6% for the current fiscal year.

Reveal Winning Stocks

Unlock all of our powerful research, tools and analysis, including the Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. You'll quickly identify which stocks to buy, hold and sell, and target today's hottest industries, to help improve the performance of your portfolio. Gain full access now >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Square, Inc. (SQ) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research