One way to screen for interesting stock picks, according to Kevin Matras of Zacks.com, is to look for companies that have recently received new analyst coverage:

"One of the things that generate analyst coverage is investor interest. And as new coverage is initiated, it becomes more visible, which in turn means potentially more demand (read higher prices). This is often the case because analysts almost always initiate coverage with a positive recommendation. (Why write a research report on a company not widely followed only to say it stinks?) And when it comes to companies with little to no analyst coverage, that one new recommendation can sometimes give portfolio managers the validation they need to build a position. (And the more money they can invest, the more they can potentially influence prices.)"

As Kevin points out in his commentary for Zacks.com, the best way to use this information is to look for companies with analyst coverage that has increased over the last four weeks. By comparing the number of analyst recommendations now with the number of analyst recommendations four weeks ago, you can detect a bullish increase in coverage. As a rule of thumb, it's typically more bullish if the increase went from none to one or if the coverage was minimal to begin with. With that in mind, Kevin provides a simple stock screen based on new analyst coverage that can help detect companies with improved or otherwise brightening prospects.

[image: Kevin Matras of Zacks.com]

NOTE: Please keep in mind that TradeKing does not specifically endorse any of the securities or trading strategies mentioned. Depending on your risk-reward profile, this trade may or may not be suitable for your portfolio. The stocks mentioned are for educational purposes only.