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The Zacks Performance Rank is based on a proprietary stock selection model developed by Zacks Investment Research in 1980. Research shows that one of the most powerful forces driving a stocks performance is changes in earnings estimates from brokerage analysts. Here is why: when brokerage analysts revise their earnings estimates -- based on recent earnings surprises or changes in the outlook for the company's business gleaned from conversations with top management -- this represents new information that is quickly discounted in stock prices by major market players. The Zacks Performance Ranking is a short-term trading indicator based primarily on the momentum of revisions in analysts earnings estimates.
Stocks are ranked from 1 to 5 with a 1 being the best rank and 5 the worst. (1=Strong Buy, 2=Moderate Buy, 3=Hold, 4=Moderate Sell, 5=Strong Sell). These rankings have shown to be an accurate predictor of stock price performance (relative to the market) for the coming 90-180 days.
During the apst 22 years, the portfolio of Zacks #1 Ranked stocks have generated and average annual return of 33.8% vs. the S&P retrun fo 14.4% during the same time period.
| Period |
Zacks Rank |
Benchmark |
Zacks Rank |
| |
#1 Stocks |
S & P 500 |
#5 Stocks |
|
|
% Return |
% Return |
% Return |
| 1980 |
55.00 |
32.40 |
12.00 |
| 1981 |
14.10 |
-5.30 |
-14.30 |
| 1982 |
42.03 |
21.60 |
1.70 |
| 1983 |
48.30 |
22.60 |
19.20 |
| 1984 |
0.60 |
6.30 |
-10.70 |
| 1985 |
49.00 |
31.00 |
5.00 |
| 1986 |
30.00 |
18.60 |
6.80 |
| 1987 |
7.50 |
5.10 |
-22.60 |
| 1988 |
43.20 |
16.20 |
18.80 |
| 1989 |
45.20 |
31.70 |
-5.40 |
| 1990 |
-1.10 |
-3.60 |
-33.90 |
| 1991 |
81.90 |
28.70 |
34.90 |
| 1992 |
43.20 |
7.50 |
16.80 |
| 1993 |
44.62 |
10.07 |
8.18 |
| 1994 |
15.58 |
0.59 |
-11.85 |
| 1995 |
53.84 |
36.31 |
10.82 |
| 1996 |
45.44 |
22.36 |
10.10 |
| 1997 |
45.75 |
33.25 |
3.72 |
| 1998 |
21.88 |
28.57 |
-15.08 |
| 1999 |
48.75 |
21.03 |
16.18 |
| 2000 |
16.24 |
-9.10 |
-5.73 |
| 2001 |
18.67 |
-11.88 |
24.74 |
| 2002* |
2.12 |
-3.36 |
-2.45 |
| |
|
|
|
|
* Thru 2/28/02 |
|
Annualized |
33.8% |
14.4% |
1.4% |
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