The U.S. stock earnings season kicked off last week, and star companies such as $Tesla (TSLA.US)$ and $Netflix (NFLX.US)$ will also release earnings this week.
Related reading: What are the highlights of the Q1 earnings season?
As earnings season kicks off, BofA analysts have revealed investment strategies they believe will work in the coming weeks and offered some advice on long-term investments.
Jill Carey Hall, strategist and head of U.S. small and mid-cap strategy at Bank of America, wrote that buying smaller, less expensive stocks based on operating cash flow to price ratios and free cash flow financial metrics is a good way to go . Investors using this strategy were successful in the first quarter just past, and she says it will remain so for the foreseeable future.
“Buying the cheapest stocks in the Russell 2000 and selling the most expensive stocks yielded an average of 19 percentage points of profit — more than any other type of stock,” she wrote. “An investment strategy based on free cash flow — tends to lead late in the cycle, and we recommend sticking with it.”
As for the recent past, Bank of America analyst Carey Hall put together a list of stocks with a “buy” rating in a report that beat fourth-quarter profit and revenue estimates. Carey Hall believes the companies will beat expectations again when they report first-quarter results.
$Alcoa (AA.US)$ , $Knight-Swift Transportation (KNX.US)$ , $Car Country (AN.US)$ , $Crane (CR.US)$ , $Boyd Casino (BYD.US)$ , $Harley-Davidson (HOG.US)$ , $oz (ASGN.US)$ , $Community Health Systems (CYH.US)$ , $Option Care Health (OPCH.US)$ , $ WEX Inc(WEX.US)$ , $TTEC Holdings(TTEC.US)$ , $Interactive Brokers(IBKR.US)$ , $Louisiana-Pacific(LPX.US)$ , $Essent(ESNT.US)$
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