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5 Stocks With Recent Price Strength for Spectacular Returns

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Nalak Das
·6 min read
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The U.S. economy suffered its largest yearly decline in 2020 since World War II and for the first time since the financial crisis of 2009 owing fully to the global outbreak of the deadly novel coronavirus.

On Feb 1, the Congressional Budget Office (CBO) projected a rosy picture for the country's economy, much higher than what was projected in July 2020. The agency has changed its outlook ''because the downturn was not as severe as expected and the first stage of recovery was stronger than expected.''

Wall Street has resumed its northbound journey after last week's disappointing performance that was incidentally the worst since October 2020. The primary reason for last week's extreme volatility — a typical trading practice in which a few key heavily shorted stocks by hedge fund giants were favored by a group of individual investors organized via Reddit’s wallstreetbets forum — has evaporated. Moreover, a series of good economic data and news boosted investors' confidence.

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: 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 15.

Here we present five out of those 15 stocks:

Navios Maritime Partners L.P. NMM owns and operates dry cargo vessels in Asia, Europe, North America, and Australia. It offers seaborne transportation services for a range of dry cargo commodities, including iron ore, coal, grain, and fertilizers, as well as charters its vessels under medium to long-term charters.

The stock price has soared 48% in the past four weeks. The company has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved 32.3% over the last 7 days.

Star Bulk Carriers Corp. SBLK is a shipping company engaged in the ocean transportation of dry bulk cargoes worldwide. Its vessels transport a range of major bulks, including iron ores, coal, and grains and minor bulks, such as bauxite, fertilizers and steel products.

The stock price has climbed 12.4% in the past four weeks. The company has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved 20.2% over the last 7 days.

First Bank FRBA is a state-chartered bank with five full-service branches. It provides personal and business banking services in New Jersey. The stock price has advanced 7.4% in the past four weeks. The company has an expected earnings growth rate of 11.3% for the current year. The Zacks Consensus Estimate for the current year has improved 2.9% over the last 7 days.

Bassett Furniture Industries Inc. BSET is engaged in the manufacture, marketing, and retail of home furnishings in the United States and internationally. It operates in three segments: Wholesale, Retail  company-owned Stores, and Logistical Services.

The stock price has gained 6.2% in the past four weeks. The company has an expected earnings growth rate of more than 100% for next  year (ending November 2021). The Zacks Consensus Estimate for next year has improved 8.7% over the last 30 days.

Bridgewater Bancshares Inc. BWB operates as the bank holding company for Bridgewater Bank that provides banking products and services to commercial real estate investors, small business entrepreneurs, and high-net-worth individuals in the United States.

The stock price has risen 6.1% in the past four weeks. The company has expected earnings growth of 14.3% for the current year. The Zacks Consensus Estimate for the current year has improved  24.3% over the last 7 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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Navios Maritime Partners LP (NMM) : Free Stock Analysis Report
 
First Bank (FRBA) : Free Stock Analysis Report
 
Bassett Furniture Industries, Incorporated (BSET) : Free Stock Analysis Report
 
Bridgewater Bancshares, Inc. (BWB) : Free Stock Analysis Report
 
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