I'm sure a lot you have experienced the pleasure of waking up and finding that a covering broker upgraded their rating on one of your stocks.
I'm also guessing that you probably experienced the opposite, and found that one of the brokers downgraded your stock.
While nobody can perfectly guard against downgrades (or forecast all upgrades), it's important to know how the market reacts. Therefore, you can stay in your upgraded winners (or buy if you're on the fence) and consider getting out if a downgrade comes your way.
When I'm screening for new stocks, I like to look for companies that have recently seen a broker rating upgrade. Tests have proven that stocks with broker rating upgrades outperform those that don't get upgraded and really outperform those that get downgraded.
-- Kevin Matras, Zacks.com
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