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4 Stocks with Recent Price Strength for Volatile Times
The Fed’s latest move to raise its core interest rate by another 0.75% has cast a pall over the stock market. It led to a precipitous drop in the equity indices on Thursday — marking the third consecutive day of declines and falling to lows not seen since July. With this, the Fed Fund rate jumped to the range of 3-3.25% from a mere 0-0.25% in early March. The central bank has hiked the interest rate by 3% so far in 2022.
What stands out is that rates may not have peaked yet, and more toughness could be in store for the remainder of this year and 2023. This is because attempts are being made to cool the 40-year high inflation and prevent it from becoming entrenched.
As such, trading is expected to be choppy for the U.S. stock markets going ahead, even as investors have been witnessing extreme volatility since the beginning of 2022. Risks stemming from recession fears, geopolitical tensions and dwindling liquidity may also lead to a rough road for equities.
In the current jittery market environment, for investors who might want to stay exposed to the equity setup, it is time to focus on good investment opportunities. One of the ways such potential plays could be identified is to look for signs of relative price strength.
Relative Price Strength Strategy
Whether a stock has the potential to offer considerable returns is determined primarily by its earnings and valuation ratios. Simultaneously, it is essential 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 for 1 to 3 months at least and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.
Finally, it is crucial 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.
Here are the four stocks that made it through the screen:
HF Sinclair: HF Sinclair is a producer and marketer of gasoline, diesel fuel and other specialty products. The 2022 Zacks Consensus Estimate for the Dallas, TX-based firm indicates 817.1% year-over-year earnings per share growth. DINO has a VGM Score of A.
HF Sinclair beat the Zacks Consensus Estimate for earnings in three of the last four quarters. It has a trailing four-quarter earnings surprise of 710.1%, on average. DINO shares have gained 61.6% in a year.
Marathon Petroleum: Based in Findlay, OH, the company is a leading independent refiner, transporter and marketer of petroleum products. MPC’s expected EPS growth rate for three to five years is currently 23%, which compares favorably with the industry's growth rate of 10.6%. Marathon Petroleum has a VGM Score of A.
Notably, Marathon Petroleum beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 56.7%, on average. MPC shares have gone up 55.3% in a year.
Unum Group: Along with disability insurance, Unum Group provides long-term care insurance, life insurance, employer- and employee-paid group benefits and related services. The 2022 Zacks Consensus Estimate for this Chattanooga, TN-based firm indicates 40.5% year-over-year earnings per share growth. UNM has a VGM Score of A.
Unum beat the Zacks Consensus Estimate for earnings in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 30.1%, on average. UNM shares have gained 66.1% in a year.
Murphy USA: Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States. The 2022 Zacks Consensus Estimate for the El Dorado, AR-based firm indicates 61.5% year-over-year earnings per share growth. MUSA has a VGM Score of B.
Murphy USA beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of 49%, on average. MUSA shares have gained 68.5% in a year.
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.
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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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.
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.
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Zacks.com featured highlights include Marathon Petroleum, Unum Group, HF Sinclair and Murphy USA
For Immediate Release
Chicago, IL – September 26, 2022 – Stocks in this week’s article are Marathon Petroleum (MPC - Free Report) , Unum Group (UNM - Free Report) , HF Sinclair (DINO - Free Report) and Murphy USA (MUSA - Free Report) .
4 Stocks with Recent Price Strength for Volatile Times
The Fed’s latest move to raise its core interest rate by another 0.75% has cast a pall over the stock market. It led to a precipitous drop in the equity indices on Thursday — marking the third consecutive day of declines and falling to lows not seen since July. With this, the Fed Fund rate jumped to the range of 3-3.25% from a mere 0-0.25% in early March. The central bank has hiked the interest rate by 3% so far in 2022.
What stands out is that rates may not have peaked yet, and more toughness could be in store for the remainder of this year and 2023. This is because attempts are being made to cool the 40-year high inflation and prevent it from becoming entrenched.
As such, trading is expected to be choppy for the U.S. stock markets going ahead, even as investors have been witnessing extreme volatility since the beginning of 2022. Risks stemming from recession fears, geopolitical tensions and dwindling liquidity may also lead to a rough road for equities.
In the current jittery market environment, for investors who might want to stay exposed to the equity setup, it is time to focus on good investment opportunities. One of the ways such potential plays could be identified is to look for signs of relative price strength.
Relative Price Strength Strategy
Whether a stock has the potential to offer considerable returns is determined primarily by its earnings and valuation ratios. Simultaneously, it is essential 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 for 1 to 3 months at least and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.
Finally, it is crucial 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.
Here are the four stocks that made it through the screen:
HF Sinclair: HF Sinclair is a producer and marketer of gasoline, diesel fuel and other specialty products. The 2022 Zacks Consensus Estimate for the Dallas, TX-based firm indicates 817.1% year-over-year earnings per share growth. DINO has a VGM Score of A.
HF Sinclair beat the Zacks Consensus Estimate for earnings in three of the last four quarters. It has a trailing four-quarter earnings surprise of 710.1%, on average. DINO shares have gained 61.6% in a year.
Marathon Petroleum: Based in Findlay, OH, the company is a leading independent refiner, transporter and marketer of petroleum products. MPC’s expected EPS growth rate for three to five years is currently 23%, which compares favorably with the industry's growth rate of 10.6%. Marathon Petroleum has a VGM Score of A.
Notably, Marathon Petroleum beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The company has a trailing four-quarter earnings surprise of 56.7%, on average. MPC shares have gone up 55.3% in a year.
Unum Group: Along with disability insurance, Unum Group provides long-term care insurance, life insurance, employer- and employee-paid group benefits and related services. The 2022 Zacks Consensus Estimate for this Chattanooga, TN-based firm indicates 40.5% year-over-year earnings per share growth. UNM has a VGM Score of A.
Unum beat the Zacks Consensus Estimate for earnings in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 30.1%, on average. UNM shares have gained 66.1% in a year.
Murphy USA: Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States. The 2022 Zacks Consensus Estimate for the El Dorado, AR-based firm indicates 61.5% year-over-year earnings per share growth. MUSA has a VGM Score of B.
Murphy USA beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of 49%, on average. MUSA shares have gained 68.5% in a year.
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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1984254/4-stocks-with-relative-price-strength-for-volatile-times
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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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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/
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.