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5 Stocks With Recent Price Strength Despite Market Volatility

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·6 min read
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Wall Street suffered a bloody blow at the end of November. The detection of a new variant of coronavirus – Omicron – in South Africa and various other countries and the warning by the World Health Organization of the potential destructive nature of the new variant have left the  global stock markets rattled since Black Friday.

Moreover, on Nov 30, in his testimony before a Senate committee, the Fed Chairman Jerome Powell said the central bank will discuss speeding up the tapering process of its quantitative easing program in the upcoming FOMS meeting scheduled from Dec 14-15. Powell’s latest statement indicates that the first interest rate hike since March 2020 is likely to come in the second quarter of 2022 instead of the second half of 2022 as was hinted after the November FOMC meeting.

Consequently, the northbound journey of the U.S. stock markets halted last month . The Dow and the S&P 500 fell 3.7% and 0.8%, respectively, last month,  while the Nasdaq Composite gained 0.3%.

However, several stocks have gained in the past four weeks. Notable among them are Builders FirstSource Inc. BLDR, Tecnoglass Inc. TGLS, Capital Product Partners L.P. CPLP, MGP Ingredients Inc. MGPI and Clearfield Inc. CLFD.

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 25.

Let’s discuss our five picks out of the 25 stocks:

Capital Product Partners L.P. is an international shipping company and leader in the seaborne transportation of refined oil products and chemicals. Capital Products’s fleet of product tankers is fully chartered under medium- to long-term time frames and bareboat charters.

The stock price of Capital Product has jumped 22.9% in the past four weeks. CPLP has an expected earnings growth rate of 49.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 9.6% over the last 30 days.

Builders FirstSource manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers in the United States. Builders FirstSource operates through four segments: Northeast, Southeast, South and West.

Builders FirstSource benefits from its focus on cost synergies, strategic acquisition, and robust demand arising from solid housing and repair & remodeling activities. BLDR continues to focus on investing in innovations and enhancing digital solutions for its customers.

The stock price of Builders FirstSource has climbed 21% in the past four weeks. BLDR has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 31.1% over the last 30 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 rallied 17.3% 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 30 days.

Clearfield manufactures, markets and sells standard and custom passive connectivity products to the fiber-to-the-premises, enterprises and original equipment manufacturers markets in the United States and internationally.

The stock price of CLFD has surged 10% in the past four weeks. Clearfiled has an expected earnings growth rate of 25.9% for the current-year (ending September 2022). The Zacks Consensus Estimate for current-year earnings has improved 8.8% over the last 30 days.

Tecnoglass Inc. is engaged in manufacturing and selling architectural glass and windows and aluminum products for the residential and commercial construction industries. TGLS operates primarily in North, Central and South America.

The stock price of TGLS has gained 8.4% in the past four weeks. Tecnoglass has an expected earnings growth rate of 84.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 9.8% 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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Builders FirstSource, Inc. (BLDR) : Free Stock Analysis Report
 
Tecnoglass Inc. (TGLS) : Free Stock Analysis Report
 
Clearfield, Inc. (CLFD) : Free Stock Analysis Report
 
Capital Product Partners L.P. (CPLP) : Free Stock Analysis Report
 
MGP Ingredients, Inc. (MGPI) : Free Stock Analysis Report
 
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