Why Virtu Financial (VIRT) is a Top Stock for the Long-Term

Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.

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It also includes the Focus List, a long-term portfolio of top stocks that have all the elements to beat the market.

Breaking Down the Zacks Focus List

If you could, wouldn't you jump at the chance for access to a curated list of stocks to kickstart your investing journey?

Enter the Zacks Focus List. It's a portfolio made up of 50 stocks that are set to beat the market over the next 12 months; each company selected serves as a foundation for long-term investors looking to create an individual portfolio.

Additionally, each selection is accompanied by a full Zacks Analyst Report, something that makes the Focus List even more valuable. The report explains in detail why each stock was picked and why we believe it's good for the long-term.

The portfolio's past performance only solidifies why investors should consider it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500's return of 9.38%. Cumulatively, the portfolio has returned 2,519.23% while the S&P returned 854.95%. Returns are for the period of February 1, 1996 to March 31, 2021.

Focus List Methodology

When stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.

Earnings estimates, or expectations of growth and profitability, come from brokerage analysts who track publicly traded companies; these analysts work together with company management to analyze every aspect that may affect future earnings, like interest rates, the economy, and sector and industry optimism.

Investors also need to look at what a company will earn down the road. This is why earnings estimate revisions are so important.

Stocks that receive upward earnings estimate revisions are more likely to receive even more upward changes in the future. For example, if an analyst raised their estimates last month, they're more likely to do it again this month, and other analysts are likely to do the same.

Harnessing the power of earnings estimate revisions is where the Zacks Rank comes in. The Zacks Rank, which is a unique, proprietary stock-rating model, employs earnings estimate revisions to make it easier to build a winning portfolio.

The Zacks Rank consists of four main pillars: Agreement, Magnitude, Upside, and Surprise. Each one is given a raw score, which is recalculated every night and compiled into the Rank. Then, stocks are classified into five groups, ranging from "Strong Buy" to "Strong Sell," using this data.

The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.

It can be very profitable to buy stocks with rising earnings estimates, as stock prices respond to revisions. By adding Focus List stocks, there's a great chance you'll be getting into companies whose future earnings estimates will be raised, which can lead to price momentum.

Focus List Spotlight: Virtu Financial (VIRT)

Headquartered in New York, NY, Virtu Financial is a market-leading financial services firm that leverages cutting-edge technology to provide execution services and data, analytics and connectivity products to its clients and deliver liquidity to the global markets. It provides a wide array of offerings in execution, liquidity sourcing, analytics and broker-neutral, multi-dealer platforms in workflow technology. The company was founded in 2008.

On July 31, 2023, VIRT was added to the Focus List at $18.9 per share. Shares have increased 217.57% to $60.02 since then, and the company is a #3 (Hold) on the Zacks Rank.

For fiscal 2026, three analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.73 to $6.95. VIRT boasts an average earnings surprise of 24%.

Moreover, analysts are expecting VIRT's earnings to grow 21.3% for the current fiscal year.

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This article originally published on Zacks Investment Research (zacks.com).

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