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5 Stocks With Recent Price Strength to Maximize Your Returns
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Wall Street closed July on an impressive note. The broad-market benchmark — the S&P 500 Index — recorded its fifth consecutive positive month for the first time since its seven-month streak ending August 2021. The tech-laden Nasdaq Composite posted its fifth straight winning month for the first time since April 2021. The blue-chip Dow also experienced significant growth buoyed by solid second-quarter earnings results of cyclical sector stocks.
The Bureau of Economic Analysis reported that U.S. GDP grew 2.4% in second-quarter 2023 after rising 2% in the first-quarter. In the fourth quarter of 2022, the U.S. GDP increased 2.6%. The second-quarter GDP growth rate eliminates the concerns of a large section of economists and financial researchers that the economy may fall into a recession in the near future.
The inflation rate is dwindling steadily since June 2022. Consequently, the Fed is approaching the end of its ongoing interest rate hike cycle. The central bank is now more confident about the soft landing of the economy.
The Fed raised the benchmark interest rate sharply by 5.25% from March 2022 to July 2023. Despite adopting extreme monetary hardness, the fundamentals of the U.S. economy remain rock solid.
The Fed may hike the interest rate one more time by 25-basis point. The combined effect of the July rate hike and one more (if at all) is likely to bring down inflation sharply, which will be visible through the economic data for the next several months.
Moreover, second-quarter 2023 earnings are stable and resilient so far. The earnings picture is not great, but it is not miserable either. Most of the companies, that have reported so far, have given upbeat guidance.
As a result, several stocks have shown price strength. We have selected five stocks likely to gain in the near term on the back of a favorable Zacks Rank. These companies are — PlayAGS Inc. (AGS - Free Report) , TETRA Technologies Inc. (TTI - Free Report) , Perdoceo Education Corp. (PRDO - Free Report) , Erie Indemnity Co. (ERIE - Free Report) and New Oriental Education & Technology Group Inc. (EDU - Free Report) .
Here’s How We Arrived at the Picks
We have primarily targeted stocks that have freshly been on a bull run. Stocks seeing price strength recently have a high chance of carrying the momentum forward.
If a stock is continuously witnessing an uptrend, there must be a solid reason or it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.
However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed to create a successful investment strategy.
Here’s how you should create the screen to shortlist the current as well as the potential winners..
Screening Parameters:
Percentage Change in Price (4 Weeks) greater than zero: This criterion shows that the stock has moved higher in the last four weeks.
Percentage Change Price (12 Weeks) greater than 10: This indicates that the stock has seen momentum over the last three months. This lowers the risk of choosing stocks that may have drawn attention due to the overwhelming performance of the overall market in a very short period.
Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Average Broker Rating 1: This indicates that brokers are also highly hopeful about the stock’s future performance.
Current Price greater than 5: The stocks must all be trading at a minimum of $5.
Current Price/ 52-Week High-Low Range more than 85%: This criterion filters stocks that are trading near their respective 52-week highs. It indicates that these are strong enough in terms of price.
Just these few criteria narrowed down the search from over 7,700 stocks to 10.
Let’s discuss five out of these 10 stocks:
PlayAGS is a designer and supplier of electronic gaming machines and other products and services for the gaming industry. AGS’ product line-up includes Class III EGMs for commercial and Native American casinos, video bingo machines for select international markets, table game products and interactive social casino products.
The stock price of PlayAGS has soared 46.7% in the past four weeks. AGS has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last seven days.
TETRA Technologies is a geographically diversified oil and gas services company, focused on completion fluids and associated products and services, water management, frac flowback, production well testing, offshore rig cooling, compression services and equipment, and selected offshore services including well plugging and abandonment, decommissioning, and diving. TTI comprises three divisions — Fluids, Well Abandonment/Decommissioning and Testing & Services.
The stock price of TETRA Technologies has jumped 45.9% in the past four weeks. TTI has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 30.4% over the last seven days.
Perdoceo Education provides educational services. PRDO offers bachelor's, associate and non-degree programs in information technologies, visual communication and design technologies, business studies and culinary arts.
The stock price of Perdoceo Education has climbed 36.8% in the past four weeks. PRDO has an expected earnings growth rate of 15.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.2% over the last seven days.
Erie Indemnity operates as a managing attorney-in-fact for the subscribers at the Erie Insurance Exchange in the United States. ERIE provides sales, underwriting, policy issuance, and renewal services for the policyholders on behalf of the Erie Insurance Exchange.
The stock price of Erie Indemnity has surged 33.9% in the past four weeks. ERIE has an expected earnings growth rate of 32.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.4% over the last 30 days.
New Oriental Education provides private educational services under the New Oriental brand in the People's Republic of China. EDU operates through Educational Services and Test Preparation Courses, Online Education and Other Services, Overseas Study Consulting Services, and Others segments.
The stock price of New Oriental Education has advanced 32.9% in the past four weeks. EDU has an expected earnings growth rate of 54.3% for the current year (ending May 2024). The Zacks Consensus Estimate for current-year earnings has improved 23.3% over the last 30 days.
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.
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.
Image: Bigstock
5 Stocks With Recent Price Strength to Maximize Your Returns
Wall Street closed July on an impressive note. The broad-market benchmark — the S&P 500 Index — recorded its fifth consecutive positive month for the first time since its seven-month streak ending August 2021. The tech-laden Nasdaq Composite posted its fifth straight winning month for the first time since April 2021. The blue-chip Dow also experienced significant growth buoyed by solid second-quarter earnings results of cyclical sector stocks.
The Bureau of Economic Analysis reported that U.S. GDP grew 2.4% in second-quarter 2023 after rising 2% in the first-quarter. In the fourth quarter of 2022, the U.S. GDP increased 2.6%. The second-quarter GDP growth rate eliminates the concerns of a large section of economists and financial researchers that the economy may fall into a recession in the near future.
The inflation rate is dwindling steadily since June 2022. Consequently, the Fed is approaching the end of its ongoing interest rate hike cycle. The central bank is now more confident about the soft landing of the economy.
The Fed raised the benchmark interest rate sharply by 5.25% from March 2022 to July 2023. Despite adopting extreme monetary hardness, the fundamentals of the U.S. economy remain rock solid.
The Fed may hike the interest rate one more time by 25-basis point. The combined effect of the July rate hike and one more (if at all) is likely to bring down inflation sharply, which will be visible through the economic data for the next several months.
Moreover, second-quarter 2023 earnings are stable and resilient so far. The earnings picture is not great, but it is not miserable either. Most of the companies, that have reported so far, have given upbeat guidance.
As a result, several stocks have shown price strength. We have selected five stocks likely to gain in the near term on the back of a favorable Zacks Rank. These companies are — PlayAGS Inc. (AGS - Free Report) , TETRA Technologies Inc. (TTI - Free Report) , Perdoceo Education Corp. (PRDO - Free Report) , Erie Indemnity Co. (ERIE - Free Report) and New Oriental Education & Technology Group Inc. (EDU - Free Report) .
Here’s How We Arrived at the Picks
We have primarily targeted stocks that have freshly been on a bull run. Stocks seeing price strength recently have a high chance of carrying the momentum forward.
If a stock is continuously witnessing an uptrend, there must be a solid reason or it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.
However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed to create a successful investment strategy.
Here’s how you should create the screen to shortlist the current as well as the potential winners..
Screening Parameters:
Percentage Change in Price (4 Weeks) greater than zero: This criterion shows that the stock has moved higher in the last four weeks.
Percentage Change Price (12 Weeks) greater than 10: This indicates that the stock has seen momentum over the last three months. This lowers the risk of choosing stocks that may have drawn attention due to the overwhelming performance of the overall market in a very short period.
Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Average Broker Rating 1: This indicates that brokers are also highly hopeful about the stock’s future performance.
Current Price greater than 5: The stocks must all be trading at a minimum of $5.
Current Price/ 52-Week High-Low Range more than 85%: This criterion filters stocks that are trading near their respective 52-week highs. It indicates that these are strong enough in terms of price.
Just these few criteria narrowed down the search from over 7,700 stocks to 10.
Let’s discuss five out of these 10 stocks:
PlayAGS is a designer and supplier of electronic gaming machines and other products and services for the gaming industry. AGS’ product line-up includes Class III EGMs for commercial and Native American casinos, video bingo machines for select international markets, table game products and interactive social casino products.
The stock price of PlayAGS has soared 46.7% in the past four weeks. AGS has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last seven days.
TETRA Technologies is a geographically diversified oil and gas services company, focused on completion fluids and associated products and services, water management, frac flowback, production well testing, offshore rig cooling, compression services and equipment, and selected offshore services including well plugging and abandonment, decommissioning, and diving. TTI comprises three divisions — Fluids, Well Abandonment/Decommissioning and Testing & Services.
The stock price of TETRA Technologies has jumped 45.9% in the past four weeks. TTI has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 30.4% over the last seven days.
Perdoceo Education provides educational services. PRDO offers bachelor's, associate and non-degree programs in information technologies, visual communication and design technologies, business studies and culinary arts.
The stock price of Perdoceo Education has climbed 36.8% in the past four weeks. PRDO has an expected earnings growth rate of 15.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 6.2% over the last seven days.
Erie Indemnity operates as a managing attorney-in-fact for the subscribers at the Erie Insurance Exchange in the United States. ERIE provides sales, underwriting, policy issuance, and renewal services for the policyholders on behalf of the Erie Insurance Exchange.
The stock price of Erie Indemnity has surged 33.9% in the past four weeks. ERIE has an expected earnings growth rate of 32.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.4% over the last 30 days.
New Oriental Education provides private educational services under the New Oriental brand in the People's Republic of China. EDU operates through Educational Services and Test Preparation Courses, Online Education and Other Services, Overseas Study Consulting Services, and Others segments.
The stock price of New Oriental Education has advanced 32.9% in the past four weeks. EDU has an expected earnings growth rate of 54.3% for the current year (ending May 2024). The Zacks Consensus Estimate for current-year earnings has improved 23.3% over the last 30 days.
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.