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CHICAGO, March 13, 2014 /PRNewswire/ --Stocks in this week's article include: Grifols (NASDAQ: GRFS Free Report), Paragon Shipping (NASDAQ: PRGN Free Report), Guidewire Software (NYSE: GWRE Free Report), ABM Industries (NYSE: ABM Free Report) and The Hanover Insurance Group (NYSE: THG Free Report). Kevin Matras shows why stocks with new analyst coverage are stocks you want to have.

Screen of the Week written by Kevin Matras of Zacks Investment Research:

Broker recommendations - love them or hate them, they do have their place. And we all look at them eventually.

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.)

The best way to use this information is to look for companies with analyst coverage that has increased over the last 4 weeks. Simply look at the number of analyst recommendations now in comparison to the number of analyst recommendations 4 weeks ago. An increase in coverage is bullish whereas a decrease in coverage is bearish.

It's typically more bullish if the increase went from none to one or if the coverage was minimal to begin with. (Going from 25 to 26 isn't going to have the same impact because that 26th analyst isn't discovering something 'new'.) But increased coverage is better than decreased coverage - assuming the coverage is positive of course.

Here's a screen to try:

For the rest of this Screen of the Week article please visit Zacks.com at: http://www.zacks.com/commentary/31651/

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Zacks.com featured expert Kevin Matras highlights: Grifols, Paragon Shipping, Guidewire Software, ABM Industries and ...