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Image: Shutterstock featured highlights include: Blue Apron Holdings, Magenta Therapeutics, Credit Acceptance Corp, Clean Harbors and LogicBio Therapeutics

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For Immediate Release

Chicago, IL – December 4, 2020 – Stocks in this week’s article are Blue Apron Holdings Inc. (APRN - Free Report) , Magenta Therapeutics Inc. (MGTA - Free Report) , Credit Acceptance Corp. (CACC - Free Report) , Clean Harbors Inc. (CLH - Free Report) and LogicBio Therapeutics Inc. (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.

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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.

About Screen of the Week 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

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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 for information about the performance numbers displayed in this press release.