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How to Buy Top-Ranked Momentum Stocks Heading into May

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The market ripped higher through morning trading on Tuesday as the Wall Street bulls attempt to wrestle back control. The strong start to the week comes as big tech earnings season ramps up, with reports due from Meta, Microsoft, Alphabet, and many others.

The Nasdaq and the S&P 500 snapped their losing streaks and mounted comebacks after they found support at their 21-week moving averages. Buyers stepped up after the market had slipped rather quickly from overheated and greedy to oversold and full of fear.

The recent bounce helps showcase why investors are often best served to stay exposed to the market at all times.

Today we explore a screen that finds stocks experiencing impressive upward earnings revisions activity, helping them earn Zacks Rank #1 (Strong Buys). The stocks we screen for are also momentum names trading near 52-week highs that might be worth buying to close out April.

Screen Basics

The screen we are looking into today comes loaded with the Research Wizard. The screen helps investors dig through all of the Zacks Rank #1 (Strong Buy) stocks, of which there are over 200 at any given time, to find some of the top momentum names.

The screen narrows down the list of Zacks Rank #1 (Strong Buy) stocksto those with upward price momentum that are also trading within 20% of their 52-week highs. The screen then uses the PEG ratio and the Price to Sales ratio to help make sure investors are getting value as well. The screen then makes your life a little easier and narrows it down to just seven stock picks.

The screen basics are listed below…

·       Zacks Rank = #1 (Strong Buy)

·       Current Price/52-week High >= 0.8

·       PEG Ratio: P/E F(1)/EPS Growth <= 1

·       Price/Sales <= 3

·       Percentage Change Price -12 Weeks = Top # 7

This strategy comes loaded with the Research Wizard and it is called bt_sow_momentum_method1 It can be found in the SoW (Screen of the Week) folder.

The screen is pretty simple, yet powerful. Here is one of the seven stocks that made it through this week's screen…

Sterling Infrastructure, Inc. ((STRL - Free Report) )

Sterling, through its array of subsidiaries, operates across three core segments: E-Infrastructure, Transportation and Building Solutions. Sterling has posted impressive growth over the last decade and it is set to benefit from megatrends such as data center expansion and U.S. infrastructure spending.

Sterling’s E-Infrastructure unit provides advanced, large-scale site development services for manufacturing, data centers, e-commerce distribution centers, power generation, and more. STRL’s Transportation division features infrastructure and rehabilitation projects for highways, roads, bridges, and beyond, while its Building segment ranges from residential and commercial concrete foundations to plumbing services.

Zacks Investment Research
Image Source: Zacks Investment Research

Sterling operates across various parts of the U.S. The firm has grown immensely over the past 20 years, including a huge run in the past decade, soaring from $672 million in revenue in 2014 to $1.97 billion in 2023. Sterling is projected to post 12% sales growth in FY24 and 2025, following 17% average growth during the trailing three years. Sterling is projected to grow its adjusted EPS by 12% and 13%, respectively.

Sterling crushed our bottom line estimate last period and its earnings outlook has popped for FY24 and FY25 to help it earn its Zacks Rank #1 (Strong Buy). Sterling shares have soared nearly 1,400% in the past 10 years, including a 170% run in the last 12 months. The stock is trading about 10% below its recent peaks and 17% below its average Zacks price target. Sterling is attempting to retake its 50-day moving average.

Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.

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

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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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