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Zacks.com featured highlights include: JAKKS, Avinger, Energous, FireEye and Proteostasis

Zacks Equity Research

For Immediate Release

Chicago, IL – May 13, 2020 - Stocks in this week’s article are JAKKS Pacific Inc JAKK, Avinger Inc AVGR, Energous Corp. WATT, FireEye Inc. FEYE and Proteostasis Therapeutics Inc. PTI.

5 Top Stocks with Rising P/E to Bet On

Investors always look for stocks with low P/E ratios as the measure indicates undervaluation. This ratio is obtained by dividing a stock’s current market price with its historical or estimated earnings. It delivers how much an investor needs to shell out per dollar of earnings.

In fact, the golden rule is – the lower the P/E of a stock, the higher will be its value for investors. This is because value investors believe that a stock's current market price is not reflective of its historical/future earnings and therefore chances of outperformance are higher.

But there is another side to the story that points to stocks with an increasing P/E. But this often-overlooked trend can prove pivotal in finding great stocks. Let’s dig a little deeper.

How Can Rising P/E Be Helpful?

Investors should note that stock prices move in tandem with earnings performance. Ifearnings come in stronger, the price of a stock soars. Solid quarterly earnings and guidance in turn boost the earnings forecast, leading to stronger demand for the stock and an uptrend in its price.

So, if the price is rising steadily, it means that investors are assured of the stock’s fundamental strength, expect some strong positives out of it as well as solid and faster earnings growth. Moreover, studies have revealed that stocks have seen their P/E ratios jump over 100% from their breakout point in the cycle. So, if you can pick stocks early in their breakout cycle, you can end up seeing considerable gains.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/921291/5-top-stocks-with-rising-pe-to-bet-on

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.

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