Zacks Investment Research

Definition

Zacks Investment Research is a leading financial research and investment advisory firm based in Chicago. It was founded in 1978 by Len Zacks, and it provides various services, such as equity research, quantitative analysis, and stock recommendations to individual investors and institutions. The firm is known for its “Zacks Rank” rating system, which ranks stocks based on factors like earnings estimations and stock performance, to help investors make informed investment decisions.

Phonetic

The phonetic representation of “Zacks Investment Research” using the International Phonetic Alphabet (IPA) is: /zæks ɪnˈvɛstmənt rɪˈsɜrtʃ/.

Key Takeaways

1. Zacks Investment Research is a leading provider of investment-related data, research, and analysis, assisting investors in making informed decisions by offering valuable insights about financial markets and investment strategies.
2. They offer a variety of services, including stock recommendations, earnings estimates, and research reports, as well as tools and information catering to individual and institutional investors, helping them optimize their investment portfolios.
3. One of Zacks’ notable offerings is their proprietary ranking system, known as the Zacks Rank. This system evaluates the potential of stocks based on factors like earnings momentum, valuation, and industry trends, enabling investors to identify promising investment options and outperform the market.

Importance

Zacks Investment Research is important in the business and finance world because it specializes in providing in-depth, data-driven analysis and stock investment recommendations for individual and institutional investors. Established in 1978, Zacks combines their expertise in quantitative models with earnings estimates, fostering an environment where investors can make well-informed decisions regarding their investments. The firm’s core rating system, known as the Zacks Rank, enables investors to easily identify the potential of specific stocks based on analysts’ forecasts and earnings trends. By offering valuable investment insights and diverse research tools, Zacks Investment Research plays a crucial role in guiding investors towards more profitable investment choices, thereby contributing significantly to the effectiveness and efficiency of financial markets.

Explanation

Zacks Investment Research is a reputable financial research firm that specializes in providing professional investors and individual traders with insightful market analysis, as well as quantitative and qualitative investment research. The primary purpose of Zacks Investment Research is to empower investors with accurate and unbiased information on stocks, mutual funds, exchange-traded funds (ETFs), options, and various other investment vehicles to aid them in making well-informed decisions, primarily based on detailed company financials and earnings. Founded in 1978 by Len Zacks, this Chicago-based firm has become a leading provider of critical information used by investors worldwide to help them achieve their financial goals.

Among the prominent Zacks’ tools and services is the Zacks Rank, which is a proprietary stock-ranking system that has proven to be highly effective in predicting the future movement of stock prices, outperforming the S&P 500 Index since its inception in 1988. Apart from providing accurate earnings estimates, Zacks Investment Research also offers in-depth analysis through its industry reports, comprehensive company profiles, and equity research reports. Furthermore, the firm delivers daily market commentary and educational content that cater to both novice and experienced investors seeking to refine their investing strategies.

With its proven track record, commitment to delivering accurate information, and array of essential services, Zacks Investment Research has become an indispensable resource for individual investors and professional money managers alike.

Examples

1. Zacks Rank – Stock Rating System: Zacks Investment Research is well-known for its Zacks Rank, a unique and proprietary stock rating system used by investors to make informed decisions. The system assigns stocks a rank from #1 (Strong Buy) to #5 (Strong Sell) based on their expected earnings growth relative to other stocks. This helps investors in picking the best stocks with high potential for gains. For example, Apple Inc. (AAPL) has been ranked as a Zacks Rank #2 (Buy), indicating its potential for beating the market.

2. Earnings Estimate Revisions: Zacks’ Earnings ESP (Expected Surprise Prediction) is a powerful tool used by investors to predict the likelihood of a company’s earnings surprise. For instance, before Alphabet Inc. (GOOGL) reported its Q2 earnings results in 2021, Zacks’ ESP tool indicated an expected surprise of +1%, which suggested the possibility of better-than-anticipated results. In the end, Alphabet reported an earnings beat, with its earnings per share surpassing Zacks’ consensus estimate by 17.97%.

3. Industry Ranking and Analysis: Zacks Investment Research provides industry rankings for over 250 industries, helping investors identify the most promising industry groups for investment. For instance, if an investor is evaluating the semiconductor industry, they can refer to Zacks’ industry research and ranking to understand its comparative strengths, weaknesses, and potential for growth. In August 2021, the Semiconductor – General industry was ranked in the top 33% of the Zacks Industry Rank, suggesting its growth potential for investors.

Frequently Asked Questions(FAQ)

Related Finance Terms

• Zacks Rank
• Equity Research Reports
• Earnings Estimate Revisions
• Investment Portfolio Tools
• Stock Market Analysis

Sources for More Information

• Zacks Investment Research Official Website
• Investopedia – Zacks Investment Research
• LinkedIn – Zachs Investment Research
• CrunchBase – Zachs Investment Research