Federated Hermes (FHI) Holds a Leading Position Among Growth Stocks: Is It a Good Investment Choice?

Maximizing Your Stock Market Potential with Zacks Premium

No matter your background or level of expertise, making the most of the stock market and investing with assurance are universal ambitions for investors. Zacks Premium provides a variety of resources to help you achieve these goals.

With features such as daily updates to the Zacks Rank and Industry Rank, unrestricted access to the Zacks #1 Rank List, comprehensive Equity Research reports, and advanced stock screening tools, this service is designed to empower you to make more informed and confident investment decisions.

Subscribers also benefit from the Zacks Style Scores system.

Understanding Zacks Style Scores

The Zacks Style Scores were created to complement the Zacks Rank, offering additional insight by evaluating stocks through three popular investment strategies. These scores are intended to help investors identify stocks with the highest likelihood of outperforming the market in the coming month.

Each stock is graded from A to F based on its value, growth, and momentum attributes. Higher grades indicate a stronger potential for outperformance—A is superior to B, B surpasses C, and so forth.

The Style Scores are divided into four main categories:

Value Score

For those who prioritize finding undervalued stocks, the Value Score highlights companies trading below their intrinsic worth. This score uses metrics such as price-to-earnings, price/earnings-to-growth, price-to-sales, and price-to-cash-flow ratios to pinpoint stocks that are both appealing and underappreciated by the broader market.

Growth Score

Growth-focused investors look for companies with strong financial health and promising future prospects. The Growth Score evaluates factors like projected and historical earnings, revenue, and cash flow to identify businesses positioned for sustained expansion.

Momentum Score

Momentum investors seek to capitalize on prevailing trends in stock prices or earnings forecasts. The Momentum Score considers recent price movements and changes in earnings estimates to help determine optimal moments to invest in high-momentum stocks.

VGM Score

If you prefer a comprehensive approach, the VGM Score combines value, growth, and momentum metrics into a single rating. This composite score helps investors quickly identify stocks that excel across all three investment styles, narrowing the field to those with the most compelling overall profiles.

Integrating Style Scores with the Zacks Rank

The Zacks Rank is a proprietary system that leverages changes in earnings estimates to guide investors toward building successful portfolios.

Historically, stocks rated #1 (Strong Buy) by the Zacks Rank have delivered an average annual return of +23.86% since 1988—more than twice the performance of the S&P 500. However, with over 200 stocks holding a Strong Buy rating and another 600 rated #2 (Buy) at any time, narrowing down your choices can be daunting.

This is where the Style Scores prove invaluable.

For the best chance at strong returns, focus on stocks with a Zacks Rank of #1 or #2 and a Style Score of A or B. If you’re considering stocks with a #3 (Hold) rating, prioritize those with high Style Scores to maximize potential gains.

Remember, the Style Scores are designed to work alongside the Zacks Rank, so any significant change in a company’s earnings outlook should influence your investment decisions.

Stocks rated #4 (Sell) or #5 (Strong Sell), even if they have high Style Scores, typically face declining earnings forecasts and are more likely to see their share prices drop.

Owning more stocks with top Zacks Ranks and high Style Scores increases your chances of investment success.

Featured Stock: Federated Hermes (FHI)

Based in Pittsburgh, Federated Hermes, Inc. is a global asset management firm overseeing $902.6 billion in assets as of December 31, 2025, following the merger of Federated Investors and Hermes Investment Management.

Currently, FHI holds a #3 (Hold) Zacks Rank and a VGM Score of B.

This company stands out for growth-oriented investors. FHI has earned a B in the Growth Style Score, with projected earnings growth of 1.6% year-over-year for the current fiscal period.

In the past two months, two analysts have raised their earnings forecasts for fiscal 2026, pushing the Zacks Consensus Estimate up by $0.09 to $5.06 per share. FHI also boasts an average earnings surprise of +17.8%.

With its solid Zacks Rank and strong Growth and VGM Scores, FHI deserves a spot on investors’ watchlists.

Top Analyst’s “Best Pick to Double”

Out of thousands of stocks, five Zacks experts have each selected their top candidate for a potential 100%+ gain in the coming months. From these, Director of Research Sheraz Mian has chosen one standout with the highest upside potential.

This company appeals to millennial and Gen Z consumers and generated nearly $1 billion in revenue last quarter. A recent price dip presents an attractive entry point. While not every elite pick is guaranteed to succeed, this stock could outperform previous Zacks “Stocks Set to Double,” such as Nano-X Imaging, which soared 129.6% in just over nine months.