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Top 6 Relative Price Strength Stocks That You Need to Buy

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·5 min read
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Earnings growth and valuation multiples are indeed important for investors to determine a stock's ability to offer considerable returns. But these are also essential in determining whether a stock’s price performance is better than its peers or the industry average.

If a stock’s performance is lacking that of the broader groups despite impressive earnings growth or valuation multiples, then something must be wrong.

It’s always advisable to stay away from these stocks and bet on those that are outperforming their respective industries or benchmarks. This is because betting on a winner always proves to be lucrative.

Then again, it is imperative that you determine whether or not an investment has relevant upside potential when considering stocks with significant relative price strength. Stocks delivering better than the S&P 500 over a period of 1 to 3 months at the least and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.

Finally, it is important to find out whether analysts are optimistic about the upcoming earnings of these companies. In order to do this, we have added positive estimate revisions for the current quarter’s (Q1) earnings to our screen. When a stock undergoes an upward revision, it leads to additional price gains.

Screening Parameters

Relative % Price change – 12 weeks greater than 0

Relative % Price change – 4 weeks greater than 0

Relative % Price change – 1 week greater than 0


(We have considered those stocks that have been outperforming the S&P 500 over the last 12 weeks, four weeks and one week.)

% Change (Q1) Est. over 4 Weeks greater than 0: Positive current-quarter estimate revisions over the last four weeks.

Zacks Rank equal to 1: Only Zacks Rank #1 (Strong Buy) stocks — that have returned more than 26% annually over the last 26 years and surpassed the S&P 500 in 23 of the last 26 years — can get through. You can see the complete list of today’s Zacks #1 Rank stocks here.

Current Price greater than or equal to $5 and Average 20-day Volume greater than or equal to 50,000: A minimum price of $5 is a good standard to screen low-priced stocks, while a high trading volume would imply adequate liquidity.

VGM Score less than or equal to B: Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best upside potential.

Here are the six stocks that made it through the screen:

USA Truck, Inc. USAK: USA Truck offers motor carrier and logistics services throughout North America. The 2021 Zacks Consensus Estimate for this Van Buren, AR-based firm indicates 169.12% earnings per share growth over 2020. USA Truck has a VGM Score of A.

Olin Corporation OLN: A vertically-integrated global producer and distributor of chemical products and U.S. maker of ammunition, Olin has a VGM Score of B. Over the past 30 days, this Clayton, MO-based firm has seen the Zacks Consensus Estimate for 2021 surge 162%.

Williams-Sonoma, Inc. WSM: This San Francisco, CA-based company is a multi-channel specialty retailer of premium quality home products. Williams-Sonoma has a VGM Score of A and an excellent earnings surprise history, having surpassed estimates in each of the last four quarters by 222.25%, on average.

Owens & Minor, Inc. OMI: Owens & Minor operates as a distributor of medical supplies to hospitals and other healthcare providers. Sporting a VGM Score of A, this Richmond, VA-headquartered company’s expected EPS growth rate for three to five years currently stands at 48.9%, comparing favorably with the industry's growth rate of 15.6%.

Virtu Financial, Inc. VIRT: Founded in 2008 and headquartered in New York, Virtu Financial is an electronic liquidity provider across a wide range of securities. The company has a VGM Score of A and an enviable earnings surprise history, having surpassed estimates in each of the last four quarters, delivering an earnings surprise of 24.75%, on average.

TTEC Holdings, Inc. TTEC: A leading provider of customer experience as a service platform, TTEC Holdings has a VGM Score of B. Over the past 30 days, this Denver, CO-headquartered firm has seen the Zacks Consensus Estimate for 2021 improve 36.4%.

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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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Owens & Minor, Inc. (OMI) : Free Stock Analysis Report
 
TeleTech Holdings, Inc. (TTEC) : Free Stock Analysis Report
 
Virtu Financial, Inc. (VIRT) : Free Stock Analysis Report
 
Olin Corporation (OLN) : Free Stock Analysis Report
 
USA Truck, Inc. (USAK) : Free Stock Analysis Report
 
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