Why These Stocks to Buy Deliver Strong Returns: A February 2026 Analysis

The banking sector is flashing compelling opportunities for investors willing to dig deeper into the fundamentals. ServisFirst Bancshares (SFBS), a Birmingham-based bank holding company, exemplifies the type of stocks to buy that emerge when you apply disciplined selection criteria to the market’s vast universe of opportunities. This case reveals why certain stocks to buy can significantly outperform the broader market, and how investors can systematically identify them.

The Three-Factor Strategy That Identifies Top-Performing Stocks to Buy

The current market environment, despite recent profit-taking in technology stocks, remains constructive for equity investors. The Nasdaq’s 90% gain over three years has naturally sparked some portfolio rebalancing, yet the fundamental backdrop for 2026 remains robust. With the Federal Reserve anticipated to cut interest rates again this year and earnings growth projected across nearly every economic sector, the case for owning high-quality stocks to buy becomes increasingly compelling.

Rather than chase momentum blindly, successful investors use systematic screening tools to identify stocks to buy that meet multiple quality criteria simultaneously. The most effective approach combines three complementary filters that have historically delivered outsized returns.

Zacks Rank #1: A 37-Year Track Record of Beating the Market

The foundation of any intelligent stock selection begins with starting point: the Zacks Rank #1 designation. This rating carries significant historical credibility, having generated average annual returns of approximately 24.4% since 1988. This isn’t simply a popularity contest or technical signal—it represents a fundamental assessment of whether a company’s earnings estimates are moving in the right direction.

Stocks to buy with a Zacks Rank #1 rating have demonstrated the ability to outperform during both market rallies and corrections. However, with over 200 companies earning this designation at any given time, the challenge becomes narrowing the field to the most actionable opportunities.

Capturing Earnings Momentum: The Quarterly Estimate Revision Edge

The second critical filter adds a timing dimension: positive current quarter estimate revisions over the preceding four weeks. This metric reveals where professional analysts are becoming more constructive—a powerful signal that earnings surprises could be forthcoming.

When analysts begin raising their near-term estimates, it often precedes positive stock performance. This revision momentum acts as an early warning system that fundamentals are strengthening faster than consensus expectations. Stocks to buy that show positive estimate revisions across the current quarter have historically demonstrated superior forward returns.

Broker Consensus Shifts: A Leading Indicator for Stocks to Buy

The third component of this selection framework focuses on recent changes in broker recommendations. Specifically, identifying the top 5 stocks with the best average broker rating changes over the last four weeks captures situations where Wall Street insiders are becoming increasingly bullish.

This metric serves as a contrarian indicator when broker sentiment is turning positive despite market volatility. When multiple analysts simultaneously upgrade their ratings, it signals that new information or improved fundamentals are reshaping how the Street views these stocks to buy.

ServisFirst Bancshares: A Finance Stock Worth Buying in Today’s Environment

ServisFirst Bancshares demonstrates how these three criteria converge to identify genuinely attractive stocks to buy. The company operates as a regional commercial bank headquartered in Birmingham, Alabama, with an expanding footprint across the Southeast and into high-growth markets including Texas and Florida.

SFBS earned its Zacks Rank #1 “Strong Buy” designation through a combination of solid operational execution and improving analyst sentiment. The company exceeded expectations in its Q4 2025 earnings release on January 20, triggering upward estimate revisions. Critically, its FY26 earnings estimate was raised 5%, with the 2026 outlook climbing over 4% higher—precisely the type of positive momentum that attracts institutional attention.

The projected growth trajectory reinforces why SFBS qualifies as one of the stocks to buy for patient investors. Revenue is anticipated to expand 20% in 2026, followed by an additional 9% growth the following year. These top-line gains should translate into adjusted earnings expansion of 22% and 10% respectively, demonstrating the operating leverage embedded in the business model.

Technical Setup and Valuation: Why SFBS Offers Dual Appeal

From a longer-term perspective, ServisFirst’s stock performance tells a compelling story. Over the past decade, SFBS has surged 370%, dramatically outpacing the Finance sector’s 165% gain. More intriguingly, the stock appears poised to break out from a trading range it has occupied for most of the past five years—a technical setup that often precedes acceleration in price discovery.

The valuation picture adds another reason why SFBS ranks among the most attractive stocks to buy at current levels. Trading at 13.1x forward 12-month earnings, the company trades at a 25% discount to its Finance sector peers and a 20% discount to its own 10-year median valuation. This valuation gap exists despite superior growth prospects and improved momentum metrics.

Analyst sentiment aligns with the fundamental and technical cases. All four brokerage recommendations tracked by Zacks carry a “Strong Buy” rating. Additionally, ServisFirst offers a 1.8% dividend yield, providing shareholders with current income while they wait for capital appreciation to materialize.

Building Your Stocks to Buy Watchlist

This three-part methodology—combining Zacks Rank strength, estimate revision momentum, and recent broker recommendation upgrades—has proven remarkably durable across market cycles. The Research Wizard platform makes it straightforward to apply these filters systematically across the entire market.

Investors interested in discovering additional stocks to buy beyond ServisFirst can access the Filtered Zacks Rank 5 strategy, stored within the Screen of the Week folder as bt_sow_filtered zacks rank5. This pre-built screen applies the exact criteria discussed here, updating automatically as new data arrives.

The opportunity before investors in February 2026 is clear: the combination of resilient earnings growth forecasts, anticipated interest rate relief, and sector-wide expansion creates a fertile environment for identifying stocks to buy. Rather than reacting emotionally to near-term volatility, systematic screening helps investors focus on fundamentals where they matter most—in the earnings forecasts and analyst recommendations that ultimately drive returns.