It's Still All About Picking The Right Stocks

Jul 28, 2015, 16:46 ET from Zacks Investment Research, Inc.

CHICAGO, July 28, 2015 /PRNewswire/ -- Amid the noise, volatility and general market unevenness in the first half of this year, stocks turned in a mixed performance. All one had to do was find the "right" stocks to be in. Easier said than done you say? Probably, but that's what happened with stock pickers who choose stocks to include in the model portfolios of some of the street's brokerage firms ranked twice a year by Zacks Investment Research. The S&P 500 was up just 1.23% in the first six months of the year. Despite that, stock pickers who had the right stocks in their model portfolios managed to show better returns. "At the end of last year, I said that picking the right stocks to be in this year would be extremely important," says Tracey Ryniec, Value Equity Strategist at Zacks. "That certainly seems to have been the case so far at least."

But while it's still definitely a stock pickers market," Ryniec says, "you could be in the "right" sector and end up in the "wrong" stocks".  "In the past, many of the stocks in an outperforming sector would do well, so you just had to be in the right sectors. This year I'm seeing a continuation of last year's trend of not only being about a "good" or a "bad" sector but picking the right companies to be in within a winning sector."   

Those brokerages who had the best six months were concentrated in outperforming stocks within the retail sector. "So, for example and not being reflective of any of the brokerage portfolio holdings, investing in Coach would not have helped your portfolio in the first six months of 2015. However, if you owned Ulta, which soared to new all-time highs in the first half of this year, it would have been a completely different story."

Many of the brokerages at the top of the rank also owned energy shares, but even though that sector has gotten hit, model portfolios with winners in retail and in health care, which was, once again, a top sector in the first 6 months of the year, helped balance out any energy weakness.

"Additionally, for the first time in several years, the love affair with technology appears to be waning," says Ryniec. "Technology stocks were not the most represented sector in most of the portfolios in the first half of 2015. But that doesn't mean tech has been completely abandoned. The portfolios just weren't as heavily concentrated in it as in years past."  

The brokerages ranked for the first half 2015 (1-1-15 through 6-30-15) are as follows…

Rank

Brokerage Firm

Total Return

1.

Tigress Financial

8.85%

2.

RBC Capital Markets

6.16%

3.

Wedbush Securities

2.37%

4.

Bank of America Merrill Lynch

2.11%

5.

Morgan Stanley Wealth Management

1.71%

6.

Credit Suisse First Boston

-0.19%

Zacks rankings for longer time periods are available to the media upon request.

The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor's. The S&P 500 Index assumes reinvestment of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. 

Zacks calculates the performance of the brokerage "model portfolios" it tracks, both well known and lesser known, on an equal-weighted basis. Total return performance figures include stock price changes, and dividends for each addition and deletion to the model portfolios. Commissions are not included.  

The leading brokerage firms employ analysts who produce recommendations for hundreds of stocks, which cannot all be bought for a client portfolio. These brokerage firms then create model portfolios from all of the stocks each firm is following.  The process to create these lists range from a top down quantitative methodology, to a bottom up fundamental process.

Media Contact:
Terry Ruffolo
Director of Media Relations

312-265-9213; truffolo@zacks.com

 

SOURCE Zacks Investment Research, Inc.



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