These are the three (3) most upgraded stocks for the second quarter

Follow the upgrades to these stocks

When we started working on this post, the idea was to list the three most upgraded stocks to date in the second quarter. However, things changed when we found that the top three most upgraded stocks in the second quarter are all energy stocks. In fact, energy stocks have the top four (4) positions, 5 of the top 6, and they have 8 of the top 10 positions, along with many in the 11-20 range. The other two spots in the top 10 are a mining company and a health game that we also find interesting. – MarketBeat

Energy is the most upgraded sector in the second quarter

When you look at the oil price (NYSEARCA: USO) and energy revenue estimates, it’s easy to see why the industry is getting so much love from the analysts. Industry profits are up 268% year-on-year in the first quarter, more than 2,300 basis points ahead of what the market expected at the start of the reporting cycle. Looking ahead, the industry is expected to deliver close to 200% EPS growth in Q2 and that figure is 5,700 basis points higher than at the start of the quarter, rising in line with the estimate for the full year. The full year estimate is the most lukewarm of all, only 100%, but the Q3 and Q4 estimates are still lagging. The bottom line is that the FY consensus estimate is up 2600 basis points since the start of the second quarter and that oil prices are also rising.

Looking at the chart of WTI, this market is moving higher. Tighter supply and increasing demand is not a scenario for lower prices and there is always the threat of supply disruptions to be aware of. In the US alone, strategic reserve, diesel and gasoline stocks are at long-term lows, which is another fundamental factor driving higher prices. Our expectation is that by the end of the summer WTI will have retested its all-time high and then it could go higher. The upside is that energy prices are skyrocketing, delivering unexpected gains in a high-yielding and low-valued sector. Exxon (NYSE: XOM), the top spot in the XLE Energy Sector SPDR (NYSEARCA: XLE), is trading at less than 10x its earnings, yielding more than 3.5%. We love those numbers.
These are the three (3) most upgraded stocks for the second quarter

Diversified Miner Tech Resources Limited Pushed Higher by Analysts

Tech Resources (NYSE: TECK) isn’t a high-yield stock, but it’s a great asset in diversified mining. The company has facilities around the world where gold, copper, zinc and other industrial metals are extracted, as well as fertilizer products and some chemicals. The stock received a series of price increases in the wake of its latest earnings report due to strength in several markets and we see this trend continuing after the next report. As it is,’s consensus estimate is solid buying and has held steady for the past 12 months. However, the consensus price target is higher in the 12, 3 and 1 month comparisons, the only negative is that price action is only 6% below the consensus target, but we see it in the next quarter or two anyway.
These are the three (3) most upgraded stocks for the second quarter

Cigna is on breakout watch

Health insurer Cigna (NASDAQ:CI) rounds out today’s list, coming in 7th in terms of upgrades and price target increases over the past 90 days. This company received not only price increases after the latest earnings report, but also new coverage. The consensus rating is a solid buy and firm, while the price target is rising in the 3 and 1 month comparisons. The consensus target is about 8% above the current price action but would be a new high if it is reached. The takeaway here is that the consensus target is moving higher and the technical action is bullish as well. Based on the chart, we expect this stock to break out in the coming weeks, if not days, and move up towards the $280 to $290 region soon after.
These are the three (3) most upgraded stocks for the second quarter

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