Zacks.com featured highlights include: Murphy USA, Owens Corning, Commercial Metals, Whirlpool and Select Medical Holdings
For Immediate Release
Chicago, IL – August 10, 2020 – Stocks in this week’s article are Murphy USA Inc. MUSA, Owens Corning OC, Commercial Metals Company CMC, Whirlpool Corporation WHR and Select Medical Holdings Corporation SEM.
The 5 Best Relative Price Strength Stocks to Buy Right Now
The novel coronavirus outbreak triggered an unprecedented sell-off in equities and bonds. Stocks were clobbered and major indices crashed regularly, while in a bizarre turn of events, the U.S. oil futures hit negative territory.
However, over the past few months, markets, securities and crude have rebounded off their pandemic lows. Restrictions have been loosened and the economy has reopened, with activity limping back toward normalcy. Meanwhile, certain drug candidates and treatments offer a ray of hope in the coronavirus fight.
While the heaviest losses may be in the rear view mirror, the road to recovery remains long and uncertain amid concerns about a fresh wave of the virus. As several U.S. states experience a spike in new coronavirus infections and hospitalization, there are apprehensions about another set of containment measures — already in place in certain regions — which might force many businesses to close again just after reopening. Moreover, efforts to combat the pandemic and policy initiatives to rev up economic activity have only had a limited impact so far.
Amid the entire coronavirus-induced mayhem, a few stocks held up to the crisis even as the virus knocked down businesses and industries. With the market expected to remain volatile over the near-to-medium term, one of the ways such potential plays could be identified is to look for signs of relative price strength.
The Relative Price Strength Approach
Whether a stock has the potential to offer considerable returns is determined primarily by its earnings and valuation ratios. Simultaneously, it is important to check whether its price performance exceeds its peers or the industry average.
Upon such comparison, if we find that a stock is unable to match up to wider sectoral growth despite having impressive earnings momentum or valuation multiples, it may be better to avoid it.
However, those outperforming their respective industries or benchmarks should be included in your portfolio, since they have a higher chance of securing significant returns. Picking a stock that outperforms its peers ensures that you have a winning option on your hands.
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 results 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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1037885/the-5-best-relative-price-strength-stocks-to-buy-right-now
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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Whirlpool Corporation (WHR) : Free Stock Analysis Report
Owens Corning Inc (OC) : Free Stock Analysis Report
Commercial Metals Company (CMC) : Free Stock Analysis Report
Murphy USA Inc. (MUSA) : Free Stock Analysis Report
Select Medical Holdings Corporation (SEM) : Free Stock Analysis Report
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