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5 Stocks With Recent Price Strength to Enhance Your Returns

·6 min read

Wall Street has been suffering from extreme volatility since Black Friday when the news of a new variant of coronavirus – Omicron – hit global financial markets. All the major stock indexes have suffered due to regular market fluctuations. To make the situation worse, the Fed Chairman’s comment on the likely speeding up of the bond-buy tapering process has dampened market participants’ sentiment to a great extent.

On Dec 15, Wall Street witnessed a relief rally after the Fed released its last FOMC meeting statement of 2021. The outcome of the FOMC meeting was in line with the market’s expectations.

Concerns about Omicron have already faded out as available data shows its less severity. On Dec 15, the Fed removed market participants’ concerns regarding near-term market interest rate movement, setting the stage for a year-end rally.

However, due to severe volatility, some stocks have gained in the past four weeks. Notable among them are Ocwen Financial Corp. OCN, Louisiana-Pacific Corp. LPX, MGP Ingredients Inc. MGPI, Carriage Services Inc. CSV and Bluegreen Vacations Holding Corp. BVH.

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 just 6.

Let’s discuss our five picks out of the 6 stocks:

Ocwen Financial is a financial services holding company engaged in asset acquisition and resolution, residential finance, commercial finance, investment management and hotel operations. Ocwen Financial primarily specializes in the acquisition and resolution of non-performing or underperforming loans. OCN operates through Servicing and Originations segments.

The stock price of Ocwen Financial has climbed 14.4% in the past four weeks. OCN has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 59.4% over the last 30 days.

Louisiana-Pacific is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products and exterior siding for use in residential, industrial and light commercial construction. Louisiana-Pacific operates through four segments: Siding, Oriented Strand Board, Engineered Wood Products, and South America.

The stock price of Louisiana-Pacific has appreciated 13.2% in the past four weeks. LPX has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.7% over the last 7 days.

MGP Ingredients Inc.  produces and supplies distilled spirits, and specialty wheat proteins and starch food ingredients. MGPI operates through two segments, Distillery Products and Ingredient Solutions.

MGP Ingredients’ Distillery Products segment primarily offers food-grade alcohol, fuel-grade alcohol, and distillers feed. MGPI’s Ingredient Solutions segment primarily provides specialty wheat starches and proteins, commodity wheat starches, and commodity vital wheat gluten.

The stock price of MGP Ingredients has advanced 12.1% in the past four weeks. MGPI has an expected earnings growth rate of 61.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 33.7% over the last 60 days.

Carriage Services is a leading provider of death care services and products in the United States. Carriage Services provides a complete range of services relating to funerals, burials and cremations, including the use of funeral homes and motor vehicles. CSV operates through two segments, Funeral Home Operations and Cemetery Operations.

The stock price of Carriage Services has surged 10.9% in the past four weeks. CSV has an expected earnings growth rate of 64% for the current-year. The Zacks Consensus Estimate for current-year earnings has improved 14.7% over the last 60 days.

Bluegreen Vacations Holding operates as a vacation ownership company. BVH markets and sells vacation ownership interests and manages resorts in leisure and urban destinations, including Orlando, Las Vegas, Myrtle Beach, Charleston and New Orleans, among others.

Bluegreen Vacations Holding’s stock price has gained 7.6% in the past four weeks. BVH has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.5% 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 to day. 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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Ocwen Financial Corporation (OCN) : Free Stock Analysis Report
 
LouisianaPacific Corporation (LPX) : Free Stock Analysis Report
 
Carriage Services, Inc. (CSV) : Free Stock Analysis Report
 
MGP Ingredients, Inc. (MGPI) : Free Stock Analysis Report
 
Bluegreen Vacations Holding Corporation (BVH) : Free Stock Analysis Report
 
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