For Immediate Release
Chicago, IL – April 1, 2021 – Stocks in this week’s article are Avid Bioservices, Inc. CDMO, Oncternal Therapeutics, Inc. ONCT, Amtech Systems, Inc. ASYS and Aytu Biopharma, Inc. AYTU.
5 Stocks to Buy on New Analyst Coverage
As analysts are the key information intermediaries in capital markets, initiation of coverage by them offers critical information on a stock which is of great value to investors.
Coverage initiation by analyst(s) on a stock portrays higher investor inclination. Investors, on their part, often assume there is something special in a stock to attract analysts’ interest. In other words, they believe that the company coming under coverage has value that can’t be ignored.
Obviously, stocks are not randomly chosen to cover. New coverage usually reflects a reassuring future envisioned by the analyst(s). At times, increased investors’ focus on a stock motivates analysts to take a closer look at it. After all, who doesn’t love to produce something that is already in demand? Hence, we often find that analysts’ ratings on newly-added stocks are more favorable than ratings on continuously covered stocks.
It is worth mentioning here that the average change in broker recommendation is always preferred over a single recommendation change.
New Analyst Coverage & Impact on Price Movement
The price movement of a stock is the function of the recommendations on it from new analysts. Typically, stocks see an upward price movement on new analyst coverage compared to what was witnessed with a rating upgrade under an existing coverage. Positive recommendations – Buy and Strong Buy – generally lead to a significantly positive price reaction than Hold recommendations. On the contrary, analysts hardly initiate coverage with a Strong Sell or Sell recommendation.
Meanwhile, investors start paying more attention to the stock (that has very few or no existing coverage) on which an analyst provides a new recommendation. Also, any new information attracts portfolio managers to build a position in the stock.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1359040/5-stocks-to-buy-on-new-analyst-coverage
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Amtech Systems, Inc. (ASYS) : Free Stock Analysis Report
Aytu BioPharma Inc. (AYTU) : Free Stock Analysis Report
Avid Bioservices, Inc. (CDMO) : Free Stock Analysis Report
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