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5 Stocks With Recent Price Strength for Sparkling Returns
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Wall Street has seen an impressive bull run in 2023 after a highly disappointing 2022. Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have advanced 10.4%, 21% and 38.9%, respectively.
U.S. stock markets regained momentum in November after three consecutive months of decline. The momentum continues in December. Investors are more confident these days as a large section of market participants are expecting the Fed to be already through with its ongoing interest rate hike cycle.
The inflation rate has been steadily falling since June 2022. A recently released series of key economic data has clearly indicated that the U.S. economy is cooling while the labor market remains resilient. However, better-than-expected consumer spending has reduced the risk of a near-term recession.
The CME FedWatch tool currently shows a 97% probability that the central bank will keep the Fed Fund rate unchanged at the existing level of 5.25-5.5%. Moreover, 45% of respondents expect the first rate cut to be initiated in the March 2024 FOMC meeting.
Recently, several stocks have shown price strength. We have selected just five stocks likely to gain in the near term on the back of a favorable Zacks Rank. These companies are — Arcos Dorados Holdings Inc. (ARCO - Free Report) , Ponce Financial Group Inc. (PDLB - Free Report) , InterDigital Inc. (IDCC - Free Report) , Limbach Holdings Inc. (LMB - Free Report) and Merchants Bancorp (MBIN - Free Report) .
Here’s How We Arrived at the Picks
We have primarily targeted stocks that have freshly been on a bull run. Stocks that have recently seen price strength 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.
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 23.
Let’s discuss five out of those 23 stocks:
Arcos Dorados operates as a franchisee of McDonald's with its operations divided in Brazil, North Latin America division, South Latin America and the Caribbean division. ARCO also runs quick-service restaurants in Latin America and the Caribbean.
Arcos Dorados has operations in territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curaçao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Uruguay, the U.S. Virgin Islands of St. Croix and St. Thomas, and Venezuela.
The stock price of Arcos Dorados has jumped 26.5% in the past four weeks. It has an expected earnings growth rate of 18.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 9.3% over the last 30 days.
Ponce Financial Group is a Minority Depository Institution, a Community Development Financial Institution and a certified Small Business Administration lender. PDLB’s business primarily consists of taking deposits from the general public and to a lesser extent alternative funding sources and investing those deposits, together with funds generated from operations and borrowings, in mortgage loans.
PDLB also invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or government-owned enterprises, as well as, mortgage-backed securities, corporate bonds and obligations and Federal Home Loan Bank stock.
The stock price of Ponce Financial Group has climbed 18.8% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved more than 100% over the last 60 days.
Interdigital is a pioneer in advanced mobile technologies enabling wireless communications and capabilities. IDCC is engaged in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks.
Furthermore, IDCC’s team of skilled engineers has expertise in major mobile connectivity as well as in technologies related to content delivery. Notably, InterDigital’s secure and scalable horizontal platform, oneMPOWER, enables businesses to launch and manage Internet of Things applications.
The stock price of Interdigital has surged 18.1% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.6% over the last 30 days.
Limbach Holdings provides building systems solutions in the United States. LMB engineers, constructs and services the mechanical, plumbing, air conditioning, heating, building automation, electrical and control systems. LMB operates in two segments, namely, General Contractor Relationships and Owner Direct Relationships.
The stock price of Limbach Holdings has rallied 17.4% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 28.7% over the last 30 days.
Merchants Bancorp operates as a diversified bank holding company in the United States. MBIN operates through the Multi-family Mortgage Banking, Mortgage Warehousing, and Banking segments.
MBIN provides multi-family housing and health care facility financing, mortgage warehousing, retail and correspondent residential mortgage banking, agricultural lending and traditional community banking services, through its subsidiaries.
The stock price of Merchants Bancorp has advanced 16.8% in the past four weeks. It has expected earnings growth of 23% for the current year. The Zacks Consensus Estimate for the current year has improved 10.9% over the last 60 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.
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5 Stocks With Recent Price Strength for Sparkling Returns
Wall Street has seen an impressive bull run in 2023 after a highly disappointing 2022. Year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have advanced 10.4%, 21% and 38.9%, respectively.
U.S. stock markets regained momentum in November after three consecutive months of decline. The momentum continues in December. Investors are more confident these days as a large section of market participants are expecting the Fed to be already through with its ongoing interest rate hike cycle.
The inflation rate has been steadily falling since June 2022. A recently released series of key economic data has clearly indicated that the U.S. economy is cooling while the labor market remains resilient. However, better-than-expected consumer spending has reduced the risk of a near-term recession.
The CME FedWatch tool currently shows a 97% probability that the central bank will keep the Fed Fund rate unchanged at the existing level of 5.25-5.5%. Moreover, 45% of respondents expect the first rate cut to be initiated in the March 2024 FOMC meeting.
Recently, several stocks have shown price strength. We have selected just five stocks likely to gain in the near term on the back of a favorable Zacks Rank. These companies are — Arcos Dorados Holdings Inc. (ARCO - Free Report) , Ponce Financial Group Inc. (PDLB - Free Report) , InterDigital Inc. (IDCC - Free Report) , Limbach Holdings Inc. (LMB - Free Report) and Merchants Bancorp (MBIN - Free Report) .
Here’s How We Arrived at the Picks
We have primarily targeted stocks that have freshly been on a bull run. Stocks that have recently seen price strength 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 23.
Let’s discuss five out of those 23 stocks:
Arcos Dorados operates as a franchisee of McDonald's with its operations divided in Brazil, North Latin America division, South Latin America and the Caribbean division. ARCO also runs quick-service restaurants in Latin America and the Caribbean.
Arcos Dorados has operations in territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curaçao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Uruguay, the U.S. Virgin Islands of St. Croix and St. Thomas, and Venezuela.
The stock price of Arcos Dorados has jumped 26.5% in the past four weeks. It has an expected earnings growth rate of 18.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 9.3% over the last 30 days.
Ponce Financial Group is a Minority Depository Institution, a Community Development Financial Institution and a certified Small Business Administration lender. PDLB’s business primarily consists of taking deposits from the general public and to a lesser extent alternative funding sources and investing those deposits, together with funds generated from operations and borrowings, in mortgage loans.
PDLB also invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or government-owned enterprises, as well as, mortgage-backed securities, corporate bonds and obligations and Federal Home Loan Bank stock.
The stock price of Ponce Financial Group has climbed 18.8% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved more than 100% over the last 60 days.
Interdigital is a pioneer in advanced mobile technologies enabling wireless communications and capabilities. IDCC is engaged in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks.
Furthermore, IDCC’s team of skilled engineers has expertise in major mobile connectivity as well as in technologies related to content delivery. Notably, InterDigital’s secure and scalable horizontal platform, oneMPOWER, enables businesses to launch and manage Internet of Things applications.
The stock price of Interdigital has surged 18.1% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.6% over the last 30 days.
Limbach Holdings provides building systems solutions in the United States. LMB engineers, constructs and services the mechanical, plumbing, air conditioning, heating, building automation, electrical and control systems. LMB operates in two segments, namely, General Contractor Relationships and Owner Direct Relationships.
The stock price of Limbach Holdings has rallied 17.4% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 28.7% over the last 30 days.
Merchants Bancorp operates as a diversified bank holding company in the United States. MBIN operates through the Multi-family Mortgage Banking, Mortgage Warehousing, and Banking segments.
MBIN provides multi-family housing and health care facility financing, mortgage warehousing, retail and correspondent residential mortgage banking, agricultural lending and traditional community banking services, through its subsidiaries.
The stock price of Merchants Bancorp has advanced 16.8% in the past four weeks. It has expected earnings growth of 23% for the current year. The Zacks Consensus Estimate for the current year has improved 10.9% over the last 60 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.