what is zacks investment research 
zacks investment research is an american company dedicated to the production of independent research and investment related content it was founded in 1978 by len zacks based on his insights while pursuing his ph d at mit the company provides professional investors with financial data and analysis to help make better investment decisions for proprietary accounts and the investment accounts of clients zacks is probably known best known for its extensive array of consensus earnings per share eps estimates more recently the company has moved into other related areas including research reports recommendation summaries on various stocks stock prices funds charts and tables and a host of other investment tools and data understanding zacks investment researchzacks uses a quantitative stock rating system that is purely mathematical meaning they re not influenced by the biases or preferences of individual analysts the rating system relies heavily on earnings per share eps related metrics such as revisions to a company s projected earnings these ratings are based on research produced by u s brokerage firms every day the company collects electronic data feeds and printed research on more than 8 500 north american publicly traded companies from 185 brokerage firms by combining and aggregating the opinions of thousands of analysts the company is able to identify expert consensus on the earnings potential of certain stocks 1zacks ranksa key element of zacks research products is zacks ranks a set of investment ratings that groups equity products according to their earnings potential originally launched for stock rankings zacks ranks is now available for mutual funds exchange traded funds and other vehicles zacks ranks assigns stocks into five categories ranging from strong buy to strong sell based on the aggregate analysis of multiple brokerage assessments according to the company zacks strong buy stocks have generated better than 25 annual average returns and outperformed the s p 500 in 26 years out of 30 2zacks ranks uses four criteria to assess earnings potential these rankings are based on len zacks insight that earnings estimate revisions are the most powerful force impacting stock prices when a stocks earnings estimates are revised upwards institutional buyers will typically enlarge their positions thereby buoying the prices of that security since large buyers take a long time to enlarge their positions a small individual investor can quickly take advantage of the anticipated price bump 4zacks ranks is a system that rates stocks between one to five unlike most ratings systems a 1 zacks rank means strong buy zacks vs morningstarzacks investment research is frequently compared with morningstar inc a chicago based investment research firm that compiles data on mutual funds and etfs like zacks morningstar publishes analysis and rates funds on a five tiered scale however the two companies take different approaches to investment research while zacks relies on quantitative analysis of fund performance morningstar has a larger focus on fundamental analysis morningstar also uses a proprietary mathematical formula based on past performance to determine how each fund ranks in its respective category both companies offer free and paid products with different levels of access at each tier example of zacks investment researchzacks lists several cases of successful predictions to demonstrate the success of their investment model one example is lsb industries lsx which was given a strong buy in july of 2012 in anticipation of a potential breakout over the next three months the strong buy rating indicated that brokerage analysts had revised their earnings estimates for lsx and were likely to continue revising their projections upwards within three months following several more upward revisions lsx had returned 36 gains to investors who used zacks research compared to 5 returns by the s p 500 5the bottom linezacks investment research is one of many firms that publish data and analysis of mutual funds stocks and other investment vehicles however zacks stands out for its unique quantitative approach focusing on revised earnings estimates as the key to identifying strong performers because brokerage analysts tend to be extremely conservative when it comes to revising their estimates these revisions can be indicators of strong future performance 