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Weekly Strategy Calls
Beyond Growth & Value: A Look at Quality Stocks
Posted: 04/05/2024
This week, Zacks Equity Strategist Mayur Thaker, CFA discusses:
• An equity investing style that falls outside the ‘growth’ and ‘value’ buckets: quality-oriented investing. In Mayur’s opinion, quality is the single most important consideration in stock picking. But how do you define it? In this webinar, Mayur walks through the 4 factors that comprise the Zacks definition of quality: high and durable earnings linearity, earnings growth, return on invested capital, and free cash flow conversion.
• Mayur explains what each of these 4 factors means in terms of a company’s quality. He offers a pair of examples of quality companies, both of which are members of the Zacks Earning Certain Portfolio (ECP): CGI Inc. (CGI) and Gartner Inc. (IT). These companies are both technology-oriented, and provide excellent illustrations of what it means to be a quality company.
• To further elucidate this definition of quality, Mayur presents a series of charts that show historical performance for each stock. The charts make clear that these companies deliver “high and durable” earnings growth, return on invested capital, and free cash flow conversion. Go beyond growth and value—discover how quality stocks can deliver long-term shareholder value. Don’t miss this week’s webinar!