5 Stocks With Recent Price Strength Backed by a Blockbuster 1H
U.S. stock markets ended a fabulous first half, with the three major stock indexes ending in positive territory. The S&P 500 and the Nasdaq Composite recorded their best first half since 2019 and 1983, respectively. The Dow relatively lagged. Yet, the blue-chip index managed to finish the first half in green.
Wall Street achieved several milestones in the first half of this year. The broad-market index — the S&P 500 — formed a new bull market during this period. The benchmark recorded its best second-quarter performance since fourth-quarter 2021 and posted three consecutive quarterly wins. The Dow closed the third successive quarter on a positive note. The Nasdaq Composite also registered back-to-back quarterly gains.
As a result, several stocks have shown price strength. We have selected five stocks likely to gain in the near term on the back of a favorable Zacks Rank. These companies are — Consolidated Water Co. Ltd. CWCO, ATI Inc. ATI, Photronics Inc. PLAB, InterDigital Inc. IDCC and Cimpress plc CMPR.
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: 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 19.
Let’s discuss five out of these 19 stocks:
Consolidated Water is involved in the development and operation of seawater desalination plants and water distribution systems in areas where naturally occurring supplies of potable water are scarce or nonexistent.
CWCO also focuses on expanding operations in areas having a large proportion of tourist properties and growing population. Consolidated Water has four business segments, Retail, Bulk, Services and Manufacturing.
The stock price of Consolidated Water has jumped 20.9% in the past four weeks. It has an expected earnings growth rate of 79.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1% over the last 30 days.
ATI is likely to benefit from strength in the High-Performance Materials & Components segment and demand growth in the Forgings business. Higher demand in the aerospace and defense markets is driving sales in this segment. Higher selling prices and increased market demand are also driving results in the Advanced Alloys & Solutions unit. Recovery in key end markets like aerospace and defense is expected to drive the segment results moving ahead.
ATI remains focused on operational efficiency to boost output and increase inventory velocity for titanium and nickel. ATI is also taking actions to improve cost structure through transformation actions. It is in the process of finishing several self-funded capital projects.
The stock price of ATI has climbed 14.1% in the past four weeks. ATI has an expected earnings growth rate of 12.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 3.7% over the last 60 days.
Photronics is engaged in the manufacture and sale of photomask products and services in the United States, Taiwan, Korea, Europe, China, and internationally. PLAB offers photomasks that are used in the manufacture of integrated circuits and flat panel displays and to transfer circuit patterns onto semiconductor wafers, FDP substrates, and other types of electrical and optical components.
The stock price of Photronics has surged 13.4% in the past four weeks. PLAB has an expected earnings growth rate of 3.1% for the current year (ending October 2023). The Zacks Consensus Estimate for current-year earnings has improved 9.9% over the last 60 days.
Interdigital is a pioneer in advanced mobile technologies enabling wireless communications and capabilities. IDCC is engaged in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks.
Furthermore, IDCC’s team of skilled engineers has expertise in major mobile connectivity as well as in technologies related to content delivery. Notably, InterDigital’s secure and scalable horizontal platform, oneMPOWER, enables businesses to launch and manage Internet of Things applications.
The stock price of Interdigital has appreciated 10.7% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last 30 days.
Cimpress has benefitted from strength across the BuildASign and Printi businesses and investment in brands. CMPR’s VistaPrint segment is being aided by robust growth in product categories such as promotional products, apparel, gifts, business cards, marketing materials, packaging and labels, and signage. Cimpress’ efforts to expand its product portfolio are encouraging. CMPR’s investments in technology augur well for long-term growth.
The stock price of Cimpress has advanced 10.1% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.9% 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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ATI Inc. (ATI) : Free Stock Analysis Report
InterDigital, Inc. (IDCC) : Free Stock Analysis Report
Photronics, Inc. (PLAB) : Free Stock Analysis Report
Consolidated Water Co. Ltd. (CWCO) : Free Stock Analysis Report
Cimpress plc (CMPR) : Free Stock Analysis Report
