Find strong buy stocks after the S&P 500 enters a bear market

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Stocks tumbled on Monday after May CPI data showed no signs of a slowdown in inflation. The higher-than-expected CPI data sparked a sell-off on Friday and Monday that eventually sent the S&P 500 into an official bear market, down more than 20% from its highs.

The benchmark index entered a technical bear market for the first time since the initial Covid sell-off in March 2020 as the bullish line finally broke after being tested a few times so far this year. Meanwhile, the Nasdaq is down over 30% from its November highs as tech stocks, which have soared during the Covid boom, are recalibrated for a rising interest rate environment.

Wall Street is now waiting with the June 14-15 central bank meeting to see what the Fed will do on the interest rate front. week, above previous expectation of 0.50%.

The current situation is making many investors angry and nervous. But there are areas of the stock market that have outperformed in 2022. And those with long-term horizons might want to consider buying strong stocks now, especially since staying cash currently carries an 8.5% inflation tax.

Here’s how investors can use the Filtered Zacks Rank 5 Stock Screen to find potential winners to help them weather the market downturn.

Zacks Rank #1 (strong buy) Stocks outperform the market in both good times and bad. However, there are over 200 stocks that receive a Zacks #1 rank at any given time. As such, it’s helpful to understand how filters are applied to Zacks rank to narrow the list down to a more manageable and tradable group of stocks.

parameter

Of course, there are only three items on this screen. But together, these three filters can lead to impressive returns.

• Zacks rank equals 1

Starting with a #1 Zacks rank is often a strong place to start, as it has averaged annual returns of about 24.4% per year since 1988.

• Estimated % change (Q1) over 4 weeks greater than 0

Positive revisions to current quarterly estimates over the past four weeks.

• % change in agent rating over 4 weeks equals top #5

The top 5 stocks with the best average broker rating have changed over the last four weeks.

This strategy loads with the research wizard and is called bt_sow_filtered zacks rank5. It can be found in the SoW (Screen of the Week) folder.

Here are two of five Stocks that qualified for the Filtered Zacks Rank 5 strategy today…

Sysco Corporation SYY

Sysco Corporation is a leading wholesale grocery company serving a range of industries including restaurants, healthcare, education, hotels and many others “that prepare meals away from home”. Sysco’s portfolio includes equipment and consumables for the foodservice and hospitality industry, with approximately 350 distribution facilities worldwide to serve over 650,000 customer locations.

Sysco shares are up 2% in 2022 to slightly outpace the industry’s 8% decline and the benchmark. SYY is up 45% over the past five years, compared to a 13% decline in the food-other industry.

Sysco’s revenue is expected to grow 33% in FY22 and an additional 8.5% in FY23, which will help boost adjusted earnings by 124% and 34%, respectively. Additionally, Sysco is one of a small group of so-called Dividend Aristocrats, which are S&P 500 companies that have paid and increased dividends for at least 25 consecutive years. SYY’s dividend yield currently stands at 2.4%.

Black Stone Minerals, LP BSM

Black Stone Minerals is one of the largest owners of interests in oil and natural gas minerals in the United States. Black Stone Minerals owns mineral interests and royalties in 41 states. BSM operates on the philosophy that its “large, diversified asset base and long-lived, non-cost-bearing mineral and royalty interests provide stable to growing production and reserves over time, allowing the majority of the cash flow generated to be distributed to shareholders.”

Black Stone Minerals announced on April 25th that it had approved a cash distribution for attributable common units of $0.40 per unit, an increase of nearly 50% over the previous payment. BSM’s dividend currently yields a whopping 10%, beating the industry average of 6.7%. Black Stone Minerals – Master Limited Partnerships’ Energy & Pipelines industry is currently ranked in the top 2% of over 250 Zacks industries. And BSM’s shares are up 115% over the past two years, compared to 80% for the industry.

Check out the rest of the stocks on this list and start trading Filtered Zacks Rank 5 (or any of our other strategies) in your own account. Remember, the key to successful screening is finding screens that have had profitable results in the past. And that’s exactly what you get with Research Wizard’s stock selection and backtesting program.

Get the rest of the stocks on this list and look for the latest companies that meet these criteria. It’s easy to do. And it could help you find your next big winner. Start researching these companies today with a free trial of the Research Wizard. You can do it.

Click here to sign up for a free trial of Research Wizard today.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options mentioned in this material.

Disclosure: Performance information on Zacks portfolios and strategies is available at: https://www.zacks.com/performance/

Zack’s Superscreen

Hard to believe, even for us at Zacks. But from 2000 to 2021, as the market grew +7.5% per year, one of our best stock-picking strategies averaged +44.4% per year.

How has this screen fared lately? In 2021, it more than tripled the market’s impressive +28.8% growth with a surge +95.3% Return.

Free – Check out the stocks it popped up for today >>

Click here to get this free report

Sysco Corporation (SYY): Free Stock Research Report

Black Stone Minerals, LP (BSM): Free Stock Research Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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