5 Stocks With Recent Price Strength to Enhance Portfolio
Wall Street’s bull run continued in December despite the Fed’s decision to speed up the tapering of the quantitative easing program and the central bank’s indication of a possible interest rate hike in the first half of 2022.
Global financial markets have been suffering from severe volatility since Black Friday of 2021, following the emergence of the new coronavirus variant — Omicron — in South Africa. However, gradually, it has become clearer to medical scientists and doctors that Omicron is much less severe than the previous coronavirus variants like Alpha, Delta and Delta+.
By the end of 2021, most countries reported that Omicron is quickly replacing Delta as the dominant coronavirus variant meaning both hospitalization and casualties will reduce to a great extent. Several major pharmaceutical and biotech firms have stated that the pandemic will eventually reduce to an endemic like flu virus by 2023. Consequently, the confidence of market participants has strengthened significantly.
Several stocks have gained in the past four weeks. Notable among them are Photronics Inc. PLAB, Clearfield Inc. CLFD, Bridge Investment Group Holdings Inc. BRDG, Vista Outdoor Inc. VSTO and Axcelis Technologies Inc. ACLS.
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 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 narrowed down the search from over 7,700 stocks to just 36.
Let’s discuss our five picks out of the 36 stocks:
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 jumped 40.7% in the past four weeks. PLAB has an expected earnings growth rate of 46.1% for the current year (ending October 2022). The Zacks Consensus Estimate for current-year earnings has improved 26.2% over the past 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 climbed 31.2% 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 past 60 days.
Bridge Investment Group is a vertically integrated real estate investment manager, diversified across specialized asset classes. BRDG combines an operating platform with investment professionals focused on real estate verticals: multifamily, affordable housing, seniors housing, office, development, logistics net lease, logistics properties, debt strategies and agency mortgage backed securities.
The stock price of Bridge Investment Group has surged 25% in the past four weeks. BRDG has an expected earnings growth rate of 18.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.1% over the past 60 days.
Vista Outdoor designs, manufactures and markets consumer products for outdoor sports and recreation markets in the United States and internationally. VSTO operates in two segments: Shooting Sports and Outdoor Products.
The stock price of Vista Outdoor has appreciated 21.2% in the past four weeks. VSTO has an expected earnings growth rate of more than 100% for the current year (ending March 2022). The Zacks Consensus Estimate for current-year earnings has improved 29.4% over the past 60 days.
Axcelis Technologies designs, manufactures, and services ion implantation and other processing equipment used in the fabrication of semiconductor chips in the United States, Europe, and Asia.
ACLS offers high energy, high current, and medium current implanters for various application requirements. Axcelis Technologies also provides aftermarket lifecycle products and services, including used tools, spare parts, equipment upgrades, maintenance services, and customer training.
The stock price of ACLS has advanced 21% in the past four weeks. Axcelis Technologies has an expected earnings growth rate of 33% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.1% over the past 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.
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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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Axcelis Technologies, Inc. (ACLS) : Free Stock Analysis Report
Photronics, Inc. (PLAB) : Free Stock Analysis Report
Vista Outdoor Inc. (VSTO) : Free Stock Analysis Report
Clearfield, Inc. (CLFD) : Free Stock Analysis Report
Bridge Investment Group Holdings Inc. (BRDG) : Free Stock Analysis Report
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