5 Stocks With Recent Price Strength Amid September Rout
September is historically known as the worst-performing month on Wall Street. With just a day of trading left, this September is set to record the worst performance in more than a decade. The S&P 500 Index is likely to post third-straight quarter of losses, for the first time since 2009.
U.S. stock markets have witnessed a broad-based decline this month. The Fed has raised the benchmark lending rate by 3% year to date. Since the central bank has given a clear indication of the continuation of a rigorous interest rate hike and tighter monetary control, a global financial crisis looms larger. Market participants are pricing the cost of an imminent recession in stock valuation.
Despite a global financial crisis due to the soaring U.S. dollar price, various important Fed officials have said that they are in favor of a rigorous interest rate hike so long as price stability is restored. Market participants are worried that the Fed may continue with its ultra-hawkish monetary policies even if the U.S. economy enters a recession.
Despite headwinds, a handful of stocks have shown price strength. These stocks are likely to gain in the near term buoyed by a favorable Zacks Rank. Five of them are — Harmonic Inc. (HLIT), International Seaways Inc. INSW, Absolute Software Corp. ABST, HF Sinclair Corp. DINO and Scorpio Tankers Inc. STNG.
Here’s How We Arrived at the Picks
We have primarily targeted stocks that have freshly been on a bull run. Stocks seeing price strength recently have a high chance of carrying the momentum forward.
If a stock is continuously witnessing an uptrend, there must be a solid reason or it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.
However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed to create a successful investment strategy.
Here’s how you should create the screen to shortlist the current as well as the potential winners.
Screening Parameters:
Percentage Change in Price (4 Weeks) greater than zero: This criterion shows that the stock has moved higher in the last four weeks.
Percentage Change Price (12 Weeks) greater than 10: This indicates that the stock has seen momentum over the last three months. This lowers the risk of choosing stocks that may have drawn attention due to the overwhelming performance of the overall market in a very short period.
Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Average Broker Rating 1 or 2: This indicates that brokers are also highly hopeful about the stock’s future performance.
Current Price greater than 5: The stocks must all be trading at a minimum of $5.
Current Price/ 52-Week High-Low Range more than 85%: This criterion filters stocks that are trading near their respective 52-week highs. It indicates that these are strong enough in terms of price.
Just these few criteria narrowed down the search from over 7,700 stocks to 6.
Let’s discuss five out of these six stocks:
International Seaways is a tanker company. INSW provides energy transportation services for crude oil and petroleum products. International Seaways owns and operates a fleet including ULCC, eight VLCCs, eight Aframaxes/LR2s, 12 Panamaxes/LR1s and 20 MR tankers.
The stock price of International Seaways has jumped 20.4% in the past four weeks. INSW has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 9.1% over the last 30 days.
Harmonic enables media companies and service providers to deliver ultra-high-quality broadcast and OTT video services to consumers globally. HLIT has also revolutionized cable access networking via the industry's first virtualized CCAP solution, enabling cable operators to more flexibly deploy gigabit internet service to consumers' homes and mobile devices.
The stock price of HLIT has climbed 15.6% in the past four weeks. Harmonic has an expected earnings growth rate of 41.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 18.1% over the last 30 days.
Absolute Software is engaged in the business of providing firmware-persistent endpoint security and management solutions. ABST provides solutions for computer security monitoring and endpoint management industry. Absolute Software’s solutions include data protection, lifecycle management, enterprise mobility management and IT service management as well as data loss prevention.
The stock price of ABST has advanced 6.3% in the past four weeks. Absolute Software has an expected earnings growth rate of more than 100% for the current year (ending June 2023). The Zacks Consensus Estimate for current-year earnings improved more than 100% over the last 60 days.
HF Sinclair operates as an independent energy company. DINO produces and markets gasoline, diesel fuel, jet fuel, renewable diesel, specialty lubricant products, specialty chemicals, specialty and modified asphalt, and others.
HF Sinclair also owns and operates refineries located in Kansas, Oklahoma, New Mexico, Utah, Washington, and Wyoming, and markets its refined products principally in the Southwest United States and Rocky Mountains, Pacific Northwest, and in other neighboring Plains states.
The stock price of HF Sinclair gained 4.8% in the past four weeks. DINO has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 1% over the last 7 days.
Scorpio Tankers is a provider of marine transportation of petroleum products worldwide. STNG’s initial fleet consists of three modern panamax tankers. Scorpio Tankers’s vessels carry petroleum products and crude oil for integrated oil companies, oil traders, and other customers.
The stock price of STNG rose 1.6 in the past four weeks. Scorpio Tankers has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7% over the last 30 days.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
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Harmonic Inc. (HLIT) : Free Stock Analysis Report
Scorpio Tankers Inc. (STNG) : Free Stock Analysis Report
International Seaways Inc. (INSW) : Free Stock Analysis Report
Absolute Software Corporation (ABST) : Free Stock Analysis Report
HF Sinclair Corporation (DINO) : Free Stock Analysis Report
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