For Immediate Release
Chicago, IL – December 4, 2020 – Stocks in this week’s article are Blue Apron Holdings Inc. (
APRN Quick Quote APRN - Free Report) , Magenta Therapeutics Inc. ( MGTA Quick Quote MGTA - Free Report) , Credit Acceptance Corp. ( CACC Quick Quote CACC - Free Report) , Clean Harbors Inc. ( CLH Quick Quote CLH - Free Report) and LogicBio Therapeutics Inc. ( LOGC Quick Quote LOGC - Free Report) . Bet on 5 Top Stocks with Rising P/Es for Spectacular Returns
Investors always look for stocks with low P/E ratios as the measure indicates undervaluation. This ratio is obtained by dividing a stock’s current market price with its historical or estimated earnings. It tells how much an investor needs to shell out per dollar of earnings.
In fact, the golden rule is – the lower the P/E of a stock, the higher will be its value for investors. This is because value investors believe that a stock's current market price is not reflective of its historical/future earnings and therefore chances of outperformance are higher.
But there is another side to the story that points to stocks with an increasing P/E. But this often-overlooked trend can prove pivotal in finding great stocks. Let’s dig a little deeper.
How Can Rising P/E Be Helpful?
Investors should note that stock prices move in tandem with earnings performance. If earnings come in stronger, the price of a stock soars. Solid quarterly earnings and guidance in turn boost the earnings forecast, leading to stronger demand for the stock and an uptrend in its price.
So, if the price is rising steadily, it means that investors are assured of the stock’s fundamental strength, expect some strong positives out of it as well as solid and faster earnings growth. Moreover, 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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1125875/bet-on-5-top-stocks-with-rising-pe-for-spectacular-returns 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.
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Contact: Jim Giaquinto
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