U.S. Markets closed

Zacks.com featured highlights: Summer Infant, Big 5 Sporting Goods, Insight Enterprises, Patrick Industries and Sandy Spring Bancorp

Zacks Equity Research

For Immediate Release

Chicago, IL – June 23, 2017 - Stocks in this week’s article include Summer Infant Inc. (NASDAQ: SUMR – Free Report ), Big 5 Sporting Goods Corporation (NASDAQ: BGFV – Free Report ), Insight Enterprises Inc. (NASDAQ: NSIT – Free Report ), Patrick Industries, Inc. (NASDAQ: PATK – Free Report ) and Sandy Spring Bancorp Inc. (NASDAQ: SASR – Free Report ).

Screen of the Week of Zacks Investment Research:

Forget Overvaluation, Profit from 5 Stocks with Rising P/E

With the S&P 500 hovering around record highs and being accused of overvaluation, investors may be hunting for stocks with a low P/E. The ratio deduces the value of a stock by dividing its current market price with its historical and estimated earnings. It measures how much an investor needs to shell out per dollar of earnings.

The lower the P/E of a stock, the better for a value investor. This is because value investors believe that the stock's current market price is not reflective of its historical/future earnings and therefore chances of outperformance are higher.

Naturally, there are very few investors who pay attention to stocks with an increasing P/E. But this often-overlooked trend can prove worthwhile in finding great stocks. Let’s dig a little deeper.

Rising P/E: An Useful Tool

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

So, if share price is rising steadily, it means that investors are assured of the stock’s fundamental strength and expect some strong positives out of it. Also, 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.

The Winning Strategy

In order to shortlist stocks that are exhibiting an increasing P/E, we chose the following as our primary screening parameters.

EPS growth estimate for the current year is greater than or equal to last year’s actual growth

Percentage change in last year EPS should be greater than or equal to zero

(These two criteria point to flat earnings or a growth trend over the years.)

Percentage change in price over four weeks greater than the percentage change in price over 12 weeks

Percentage change in price over 12 weeks greater than percentage change in price over 24 weeks

(These two criteria show that price of the stock is increasing consistently over the said timeframes.)

Percentage price change for four weeks relative to the S&P 500 greater than the percentage price change for 12 weeks relative to the S&P 500

Percentage price change for 12 weeks relative to the S&P 500 greater than the percentage price change for 24 weeks relative to the S&P 500

(Here, the case for consistent price gains gets even stronger as it displays percentage price changes relative to the S&P 500.)

Percentage price change for 12 weeks is 20% higher than or equal to the percentage price change for 24 weeks, but it should not exceed 100%

(A 20% increase in the price of a stock from the breakout point gives cues of an impending uptrend. But a jump of over 100% indicates that there is limited scope for further upside and that the stock might be due for a reversal.)

In addition, we place a few other criteria that lead us to some likely outperformers.

Zacks Rank less than or equal to 2: Only companies with a Zacks Rank #1 (Strong Buy) can get through.

Average 20-day Volume greater than or equal to 50,000: High trading volume implies that the stocks have adequate liquidity.

Just these few criteria narrowed down the universe from over 7,700 stocks to just seven.

Here are five out of the seven stocks:

Summer Infant Inc. (NASDAQ:SUMR – Free Report ): The company is a designer and distributor of juvenile health, safety and wellness products. Its Zacks Industry Rank is in the top 12%, at the time of writing. You can see the complete list of today’s Zacks #1 Rank stocks here .

Big 5 Sporting Goods Corporation (NASDAQ:BGFV – Free Report ): This company is a leading sporting goods retailer in western U.S. Its Zacks Industry Rank is in the top 28%.

Insight Enterprises Inc. (NASDAQ:NSIT – Free Report ): This is a global direct marketer of brand name computers, hardware and software. Its Zacks Industry Rank is in the top 41%.

Patrick Industries, Inc. (NASDAQ:PATK – Free Report ): The company is a manufacturer of building products and materials to the manufactured housing and recreational vehicle industries. Though its Zacks Industry Rank is in the bottom 38%, its Zacks Industry Rank is in the top 38%.

Sandy Spring Bancorp Inc. (NASDAQ:SASR – Free Report ): This is a bank holding company for Sandy Spring National Bank of Maryland. The bank conducts a full-service commercial banking business. Its Zacks Industry Rank is in the top 38%.

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 today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today .

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 .

Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »

Sign up now for your free trial today and start picking better stocks immediately. And with the backtesting feature, you can test your ideas to see how you can improve your trading in both up markets and down markets. Don’t wait for the market to get better before you decide to do better. Start learning how to be a better trader today: https://at.zacks.com/?id=111

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.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here https://at.zacks.com/?id=112

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros .

Get the full Report on SUMR - FREE

Get the full Report on BGFV - FREE

Get the full Report on NSIT - FREE

Get the full Report on PATK - FREE

Get the full Report on SASR - FREE

Follow us on Twitter: https://twitter.com/zacksresearch

Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Contact: Jim Giaquinto

Company: Zacks.com

Phone: 312-265-9268

Email: pr@zacks.com

Visit: https://www.zacks.com/performance

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer .

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Click for Free Summer Infant, Inc. (SUMR) Stock Analysis Report >>
 
Click for Free Big 5 Sporting Goods Corporation (BGFV) Stock Analysis Report >>
 
Click for Free Insight Enterprises, Inc. (NSIT) Stock Analysis Report >>
 
Click for Free Patrick Industries, Inc. (PATK) Stock Analysis Report >>
 
Click for Free Sandy Spring Bancorp, Inc. (SASR) Stock Analysis Report >>
 
To read this article on Zacks.com click here.
 
Zacks Investment Research