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5 Stocks With Recent Price Strength Defying Market Volatility

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Wall Street has been grappling with volatility since last week. Although the overall movement of the market has remained northbound so far this year after an impressive rally in the pandemic-ridden 2020, volatility has been rife in the first two months of 2021 resulting in market fluctuations.

January's volatility was the result of a typical trading practice in which a few key heavily shorted stocks by hedge fund giants were favored by a group of individual investors organized via Reddit’s wallstreetbets forum. However, in February, volatility resulted from lingering problems in the U.S. labor market, spike in benchmark Treasury Note yield and inflationary expectations.

On Feb 18, the Department of Labor reported that weekly jobless claims for the week ended Feb 13 rose 13,000 to 861,000, the highest level in a month, and above the consensus estimate of 766,000. Before the outbreak of the pandemic, weekly jobless claims were hovering at around 200,000.
Inflation expectations are currently at the highest level since 2014 as market participants are discounting  the effects of the ongoing nationwide deployment of COVID-19 vaccines and President Joe Biden's proposed $1.9 trillion fresh coronavirus-aid package.

Wall Street's northbound journey so far this year after an astonishing rally defying coronavirus-led devastations has prompted investors to shift the allotment of  funds from safe-haven government bonds to risky equities. This has resulted is soaring yields on long-term U.S. sovereign bonds.
At this stage, wouldn’t it be a safer strategy to look for stocks that are winners and have the potential to gain further?

Sounds Good? Here’s How to Execute It:

One should primarily target stocks that have freshly been on a bull run. Actually, 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 else it would have probably crashed. So, looking at stocks that are capable of beating the benchmark that they have set for themselves seems rational.

However, recent price strength alone cannot create magic. Therefore, you need to set other relevant parameters 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 have narrowed down the search from over 7,700 stocks to just 31.

Here we present five out of those 31 stocks:

Aviat Networks Inc. (AVNW - Free Report) designs, manufactures and sells an array of wireless networking products, solutions, and services in North America, Africa, the Middle East, Europe, Russia, Latin America, and the Asia Pacific.

The stock price has soared 85.3% in the past four weeks. The company has expected earnings growth of more than 100% for the current year (ending June 2021). The Zacks Consensus Estimate for the current year has improved 13.6% over the last 30 days.

Danaos Corp. (DAC - Free Report) owns and operates containerships in Australia, Asia, Europe, and the United States. It offers seaborne transportation services, such as chartering its vessels to liner companies.

The stock price has jumped 59.7% in the past four weeks. The company has an expected earnings growth rate of 92.2% for the current year. The Zacks Consensus Estimate for the current year has improved 30.2% over the last 30 days.

PDC Energy Inc. (PDCE - Free Report) is an independent exploration and production company that acquires, explores, develops and produces crude oil, natural gas, and natural gas liquids in the United States.

The stock price has climbed 47.3% in the past four weeks. The company has an expected earnings growth rate of more than 100% for next  year. The Zacks Consensus Estimate for next year has improved 4.7% over the last 30 days.

Navios Maritime Partners L.P. (NMM - Free Report) owns and operates dry cargo vessels in Asia, Europe, North America, and Australia. It offers seaborne transportation services for a range of dry cargo commodities, including iron ore, coal, grain, and fertilizers, as well as charters its vessels under medium to long-term charters.

The stock price has rallied 42% in the past four weeks. The company has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved 32.3% over the last 30 days.

Herc Holdings Inc. (HRI - Free Report) operates as an equipment rental supplier primarily in the United States. It rents aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, and lighting equipment.

The stock price has surged 39.2% in the past four weeks. The company has expected earnings growth of 40.5% for the current year. The Zacks Consensus Estimate for the current year has improved  26.3% over the last 7 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.