5 Stocks With Recent Price Strength Amid Recent Volatility
Wall Street came under tremendous pressure recently on concerns of rising coronavirus cases. New COVID-19 cases have been on the rise across the United States, with the Delta variant spreading fast among those who are not vaccinated.
On average, the United States has recorded 26,000 new cases daily over the last seven days through Jul 18. The numbers have shot up sharply from an average 11,000 new COVID-19 infections a day a month ago. Besides, cases are on the rise across the world. The rapid spread of the Delta variant once again ignited fears among investors, who are worried that economic recovery might once again slow down.
Moreover, investors are worried that tensions might further escalate between the Washington and Beijing after the Biden administration blamed China for the Microsoft Exchange email server software hack earlier this year that compromised valuable data from tens of thousands of computers.
Also, Democratic senators were scheduled to announce a proposal to raise $14 billion annually by imposing taxes on imports from China and several other countries that are not taking enough steps to reduce emissions.
Market participants remained highly concerned about an impending inflation that will sustain for long. The consumer price index (CPI) — popularly known as household inflation — has jumped in the last three months. The core PCE price index — Fed's favorite inflation gauge — also surged in recent months.
In June, the CPI increased 5.4% year over year, its highest since August 2008. The core CPI (excluding volatile food and energy items) increased 4.5%, the highest monthly jump since September 1991. Meanwhile, the producer price index (PPI) surged 7.3%, marking the second month in a row in which the PPI set a record high.
Nevertheless, U.S. stock markets are set to continue their strong performance on the back of solid consumer and business confidence, solid improvement in GDP growth, and corporate profits. Despite the recent volatility, as of Jul 20, the major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are up 12.8%, 15.6% and 12.1%, respectively, year to date.
At this stage, wouldn’t it be a safer strategy to look for stocks that are winners and have the potential to gain further?
Sounds Good? Here’s How to Execute It:
One should primarily target stocks that have freshly been on a bull run. Actually, 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 else it would have probably crashed. So, looking at stocks that are capable of beating the benchmark that they have set for themselves seems rational.
However, recent price strength alone cannot create magic. Therefore, you need to set other relevant parameters 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 have narrowed down the search from over 7,700 stocks to just 18.
Here we present five out of those 18 stocks:
Apollo Medical Holdings Inc. AMEH is a physician-centric technology-powered healthcare management company offering medical care services like integrated care, inpatient and physician alignment solutions.
The company’s stock price has soared 48.1% in the past four weeks. It has an expected earnings growth rate of 26.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 20.8% over the last 90 days.
Hibbett Sports Inc. HIBB is engaged in the retail of athletic-inspired fashion products through its stores. Its stores offer a range of merchandise, including athletic footwear, athletic and fashion apparel, sports equipment, and related accessories.
The stock price has jumped 23.6% in the past four weeks. The company has an expected earnings growth rate of 46.2% for the current year (ending January 2022). The Zacks Consensus Estimate for current-year earnings has improved 5.3% over the last 30 days.
Controladora Vuela Compañía de Aviación, S.A.B. de C.V. VLRS provides air transportation services for passengers, cargo, and mail in Mexico and internationally.
The stock price has climbed 21.9% in the past four weeks. The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 7 days.
NIKE Inc. NKE is engaged in the business of designing, developing and marketing athletic footwear, apparel, equipment and accessories, and services for men, women and children worldwide.
The stock price has rallied 20.6% in the past four weeks. The company has an expected earnings growth rate of 19.4% for the current year (ending May 2022). The Zacks Consensus Estimate for current-year earnings has improved 9.6% over the last 30 days.
Lands' End Inc. LE operates as a uni-channel retailer of casual clothing, accessories, footwear, and home products in the United States, Europe, Asia, and internationally. It operates through the U.S. eCommerce, Lands' End Outfitters, Europe eCommerce, Japan eCommerce, Third Party, and Retail segments.
The stock price has surged 12.2% in the past four weeks. The company has an expected earnings growth rate of more than 100% for the current year (ending January 2022). The Zacks Consensus Estimate for current-year earnings has improved more than.100% over the last 60 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.
Click here to sign up for a free trial to the Research Wizard today.
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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NIKE, Inc. (NKE) : Free Stock Analysis Report
Hibbett, Inc. (HIBB) : Free Stock Analysis Report
Lands End, Inc. (LE) : Free Stock Analysis Report
Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (VLRS) : Free Stock Analysis Report
Apollo Medical Holdings, Inc. (AMEH) : Free Stock Analysis Report
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