YouTube tutorial (by Alberto Costa) demonstrating how to use the Zacks website for stock research. The presenter walks through searching a ticker (example: Facebook) and focuses on four free Zacks data points: the Zacks Rank (1–5 scale: 1=Strong Buy to 5=Strong Sell), Earnings ESP (a percentage indicating likelihood of earnings surprise), Industry Rank, and Sector Rank. He explains practical rules-of-thumb for longs (prefer rank 1–3, ESP ≥ 0%, and sector/industry in top ~30–40%) and shorts (prefer rank 3–5, ESP ≤ 0%, sector/industry in bottom ~30–40%), notes Zacks uses 265 industries and 16 sectors, and suggests combining Zacks with Finviz for cross-checking. Creator/date metadata: Alberto Costa, May 13, 2018.
He avoids taking new long positions if earnings are about 7–10 days away.
Chapters
Hi, welcome to this new video. Today I'm going to show you a very interesting website that I use for my own research. And this website is Zucks. You can find it@zucks.com and I want to show you how to use it. With an example, maybe we can take Facebook. So the first thing to do is to write the ticker or company name here, Facebook. And then we click. And what we will see is this page where we have a lot of information. So here you see something that you always find in the finviz. If you remember my previous video, this tool and so very, you know, fundamental information. But what I use is basically four things I want to show you. The first one is this rank. Okay, so Zags ranks stocks with a scale one to five. Okay, if we click here, you will see the meaning. So the 1 is a strong buy, 2 buy, 3 hold, 4 is sell and 5 is strong sell. So how do you use this? Well, for example, if you want to go long, probably you want to take only companies that are ranked 1, 2, maybe 3. You don't want to take a long position on a company ranked 4 or 5. Of course, I'm referring to a strategy that is more investing, right? So you want to have good company. You can also, in case you want to go short, maybe you want to take only those rank number four or five or maybe three, but not one and two. So this is the first thing I look the rank. The other thing is this earning esp. So what is this? This is a number, a percentage. And if this number is positive, it means that the company is more likely to have good results the next time there is the earning release. And if this number is negative, it is more likely that the company will underperform. So how can you use this? Well, you can use this number in two ways. The first one is suppose you want to buy stock of a company. If this number is negative, right? And the earnings are soon, maybe it's better to avoid it. Of course. Well, personally I don't take any long position if the earnings are, let's say seven days, 10 days. But let's say that the earnings are in one month and maybe your strategy is longer term. So usually you hold for a few months. Well, if this number is negative, so the earnings will be released likely when you are holding the stock, then you would like to avoid the situation where earnings are very bad and then there is maybe a gap down. So this is one way you can use this number. The second one is suppose you already have invested in this Company and earnings are coming. Now if this number is negative, maybe you can consider closing the position before earnings. Because if this number is negative, it's more likely that the result will not be so good. And this may be situation where you have a gap down. Okay, Right. So we have seen the rank, we have seen the earning esp. The other two things that I look for are below and actually here in this table everything is summarized. So you have the rank and then you have the earning esp. The other two things are the industry rank and the sector rank. Why? Because again if you want to go long, it's better to have a company that is in a strong sector and strong industry. And again, if you remember Finviz give us this information. So this may be a way to double check. You know, you have the Fengvis opinion and then you have the Zuck's opinion. And if both of them are saying that the industry and sector are good, that is a good indication. So you see here, Zags use 265 industries and 16 sectors. So as indication I would say if you want to go long, you may take the top 30, 40% sector and also 30, 40% industry. And maybe if you want to go short, you want to look at the bottom 40, 30, 40 for industry and sector. Okay, so basically you just go here, you scroll down and here you have all the information we want. So the rank, the esp, the industry rank and sector rank. Okay, so we can summarize what we've just said. Let's say you want to go long. Okay, so the first thing you want to look for is The Zags rank 1, 2 or 3. Then you want earning ESP to be 0% or better. And then you want the sector rank, let's say the top 30% and the industry rank same top 30%. What about short? Well for short is the opposite. Right, so, so we have the Zacks rank. We can have 3, 4 or 5. Okay, then we want the earning ESP 0% or less sector rank. We want the bottom 30% and the same with the industry rank. Again bottom 30%. So that's it. That's how you can use Zax. And of course if you subscribe and you pay, you have more information. But already with those that are for free, you can get very interesting results. And especially you can combine as I say, these with Finviz to get a better idea. So thank you for watching. If you like this video, you can put a, like, if you have question, you can write a comment and you can subscribe to this channel to be updated when I will upload new videos. So thank you again and see you next time.
