Recently, I’ve been researching how to more effectively find worthwhile retail stocks to invest in and came across a pretty interesting idea. Many retail investors can actually learn from the thinking patterns of institutional investors, and the Zacks Rank system is built on this logic.

Its core idea is to track and analyze analysts’ revisions of company earnings expectations. When multiple analysts upgrade a company's earnings estimates, it often indicates that institutional investors will follow suit and buy in. That’s why retail investors who can get involved early in earnings estimate upgrades can establish positions before large funds do.

This system classifies stocks into five grades, from Strong Buy to Strong Sell. Data shows that over the past 32 years, the stock portfolios with a Zacks Rank #1 (Strong Buy) have outperformed the market in 26 of those years, with an average annual return of 25.41%. This performance is definitely worth paying attention to.

Recently, I saw Carvana (CVNA) listed as a Strong Buy. The company operates in the used car e-commerce sector, and since its IPO in 2017, its revenue has increased about 16 times. In the past 60 days, five analysts have raised earnings estimates, with consensus expectations rising from previous levels to $3.67 per share. Even more interesting, the stock has surged 54.6% over the past four weeks, far surpassing the S&P 500’s 11.5%.

Data shows that CVNA’s earnings estimate growth rate has reached 130.8%, with sales growth expected at 25.8%. This combination—upward revisions, strong market momentum, and historical excess returns—is indeed a signal that retail investors should focus on. The key is to learn how to systematically identify these opportunities rather than being confused by market noise.