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9 Stocks with Recent Price Strength to Boost Your Portfolio

Investors always seek a winning strategy. However, finding such a strategy is easier said than done. When markets are shaken by widespread global growth concerns, it is difficult for even an insightful investor to come up with a foolproof approach.

No matter how disciplined and systematic investors are, equity market volatility will always manage to get the better of them. While a few lucky ones rake in the moolah, others fall victim to ad hoc strategies.

One could resort to commonly used techniques to find beaten down stocks that have the potential to recover faster than others. However, even such investment choices bear the risk of disappointment. Particularly, one could be stuck in a value trap if the hidden weaknesses in selected stock are not identified.

So, wouldn’t it be a safer to look for stocks that are winners currently and have the potential to gain further?

Here’s how to execute it:

One should primarily look for stocks that have recently been witnessing price increase. Actually, stocks seeing price strength recently have a high chance of carrying the momentum forward.

If a stock is continuously moving higher, there must be a good reason for the rise or else it probably would have fallen like the losers. So, looking at stocks that have already won the game and are capable of beating the benchmark that they have set is rational.

However, recent price strength alone cannot create magic, so 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.

Here are nine of the 16 stocks that made it through this screen:

SORL Auto Parts Inc. SORL specializes in the development, production and distribution of air brake valves and hydraulic brake valves. The stock surpassed the Zacks Consensus Estimate in all the trailing four quarters, with an average positive surprise of 94.5%.

Kadant Inc. KAI is a leading supplier of a range of products and systems for the global papermaking and paper-recycling industries, including de-inking systems, stock-preparation equipment, water-management systems and papermaking accessories. The company surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average positive surprise of 25.5%.

Nova Measuring Instruments Ltd. NVMI develops, produces and markets monitoring and measurement systems for the semiconductor manufacturing industry. The stock surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average positive surprise of 30.8%.

KMG Chemicals Inc. KMG manufactures, markets and distributes specialty, niche chemicals. The company surpassed the Zacks Consensus Estimate thrice while missing the same on one occasion in the trailing four quarters. It has an average positive earnings surprise of 10.6%.

ChipMOS TECHNOLOGIES INC. IMOS is a semiconductor service company. The company surpassed the Zacks Consensus Estimate thrice while missed the same on one occasion in the trailing four quarters. It has an average positive earnings surprise of approximately 93%.

Modine Manufacturing Company MOD operates primarily in a single industry consisting of the manufacture and sale of heat transfer equipment. Last quarter, the company delivered a positive earnings surprise of 2.94%.

SunOpta Inc. STKL is an operator of high-growth ethical businesses, focusing on integrated business models in the natural and organic food, supplements and health and beauty markets. Last quarter, the company posted a came up with a positive earnings surprise of 50%.

Weibo Corporation WB operates as a social media platform for people to create, distribute and discover Chinese-language content. Last quarter, the company delivered a positive earnings surprise of 31.3%.

Sun Hydraulics Corporation SNHY is a leading designer and manufacturer of high-performance, screw-in hydraulic cartridge valves and manifolds which control force, speed and motion as integral components in fluid power systems. Last quarter, the company delivered a positive earnings surprise of 5.6%.

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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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