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6 Stocks With Relative Price Strength to Enhance Your Gains
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Whether a stock has the potential to offer considerable returns is determined primarily by its earnings and valuation ratios. Simultaneously, it is important to check whether its price performance exceeds its peers or the industry average.
Upon such comparison, if we find that a stock is unable to match up to wider sectoral growth despite having impressive earnings momentum or valuation multiples, it may be better to avoid it.
However, those outperforming their respective industries or benchmarks should be included in your portfolio since they have a higher chance of securing significant returns. Picking a stock that outperforms its peers ensures that you have a winning option on your hands.
Then again, it is imperative that you determine whether or not an investment has relevant upside potential when considering stocks with significant relative price strength. Stocks delivering better than the S&P 500 over a period of 1 to 3 months at least and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.
Finally, it is important to find out whether analysts are optimistic about the upcoming earnings of these companies. In order to do this, we have added positive estimate revisions for the current quarter’s (Q1) earnings to our screen. When a stock undergoes an upward revision, it leads to additional price gains.
Screening Parameters
Relative % Price change – 12 weeks greater than 0
Relative % Price change – 4 weeks greater than 0
Relative % Price change – 1 week greater than 0
(We have considered those stocks that have been outperforming the S&P 500 over the last 12 weeks, four weeks and one week.)
% Change (Q1) Est. over 4 Weeks greater than 0: Positive current-quarter estimate revisions over the last four weeks.
Zacks Rank equal to 1: Only Zacks Rank #1 (Strong Buy) stocks — that have returned more than 26% annually over the last 26 years and surpassed the S&P 500 in 23 of the last 26 years — can get through. You can see the complete list of today’s Zacks #1 Rank stocks here.
Current Price greater than or equal to $5 and Average 20-day Volume greater than or equal to 50,000: A minimum price of $5 is a good standard to screen low-priced stocks, while a high trading volume would imply adequate liquidity.
VGM Score less than or equal to B: Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best upside potential.
Here are the six stocks that made it through the screen:
BJ’s Wholesale Club Holdings, Inc. (BJ - Free Report) : Founded in 1984 and headquartered in Westborough, MA, BJ's Wholesale Club Holdings has emerged as one of the preferred destinations for shoppers when it comes to essentials and other items. The company has a VGM Score of A and an excellent earnings surprise history. It surpassed estimates in each of the last four quarters, delivering an earnings surprise of 25.57%, on average.
Jones Lang LaSalle Incorporated (JLL - Free Report) : Jones Lang LaSalle is a leading full-service real estate firm that provides corporate, financial and investment management services. The 2021 Zacks Consensus Estimate for this Chicago, IL-based firm indicates 62.47% earnings per share growth over 2020. Jones Lang LaSalle has a VGM Score of B.
DICK'S Sporting Goods, Inc. (DKS - Free Report) : It operates as a major omni-channel sporting goods retailer for team sports, fitness, camping, fishing, tennis, golf, water sports, etc. DICK'S Sporting Goods has a VGM Score of A. Over the past 30 days, this Coraopolis, PA-based firm has seen the Zacks Consensus Estimate for fiscal 2022 improve 29.3%.
AdvanSix Inc. (ASIX - Free Report) : This Parsippany, NJ-based company operates as a manufacturer of Nylon 6 polymer resin used to produce engineered plastics, fibers, filaments and films. AdvanSix has a VGM Score of B and an excellent earnings surprise history of 50.74%, on average, for the last four quarters.
Ternium S.A. (TX - Free Report) : Ternium is a maker of steel and iron. Carrying a VGM Score of B, this Luxembourg-headquartered company’s expected EPS growth rate for three to five years is currently 18.6%, which compares favorably with the industry's growth rate of 16.6%.
Matson, Inc. (MATX - Free Report) : Matson is a transportation services company with a focus on the Pacific region. The 2021 Zacks Consensus Estimate for this Honolulu, HI-based firm indicates 147.3% earnings per share growth over 2020. Matson has a VGM Score of A.
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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6 Stocks With Relative Price Strength to Enhance Your Gains
Whether a stock has the potential to offer considerable returns is determined primarily by its earnings and valuation ratios. Simultaneously, it is important to check whether its price performance exceeds its peers or the industry average.
Upon such comparison, if we find that a stock is unable to match up to wider sectoral growth despite having impressive earnings momentum or valuation multiples, it may be better to avoid it.
However, those outperforming their respective industries or benchmarks should be included in your portfolio since they have a higher chance of securing significant returns. Picking a stock that outperforms its peers ensures that you have a winning option on your hands.
Then again, it is imperative that you determine whether or not an investment has relevant upside potential when considering stocks with significant relative price strength. Stocks delivering better than the S&P 500 over a period of 1 to 3 months at least and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.
Finally, it is important to find out whether analysts are optimistic about the upcoming earnings of these companies. In order to do this, we have added positive estimate revisions for the current quarter’s (Q1) earnings to our screen. When a stock undergoes an upward revision, it leads to additional price gains.
Screening Parameters
Relative % Price change – 12 weeks greater than 0
Relative % Price change – 4 weeks greater than 0
Relative % Price change – 1 week greater than 0
(We have considered those stocks that have been outperforming the S&P 500 over the last 12 weeks, four weeks and one week.)
% Change (Q1) Est. over 4 Weeks greater than 0: Positive current-quarter estimate revisions over the last four weeks.
Zacks Rank equal to 1: Only Zacks Rank #1 (Strong Buy) stocks — that have returned more than 26% annually over the last 26 years and surpassed the S&P 500 in 23 of the last 26 years — can get through. You can see the complete list of today’s Zacks #1 Rank stocks here.
Current Price greater than or equal to $5 and Average 20-day Volume greater than or equal to 50,000: A minimum price of $5 is a good standard to screen low-priced stocks, while a high trading volume would imply adequate liquidity.
VGM Score less than or equal to B: Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best upside potential.
Here are the six stocks that made it through the screen:
BJ’s Wholesale Club Holdings, Inc. (BJ - Free Report) : Founded in 1984 and headquartered in Westborough, MA, BJ's Wholesale Club Holdings has emerged as one of the preferred destinations for shoppers when it comes to essentials and other items. The company has a VGM Score of A and an excellent earnings surprise history. It surpassed estimates in each of the last four quarters, delivering an earnings surprise of 25.57%, on average.
Jones Lang LaSalle Incorporated (JLL - Free Report) : Jones Lang LaSalle is a leading full-service real estate firm that provides corporate, financial and investment management services. The 2021 Zacks Consensus Estimate for this Chicago, IL-based firm indicates 62.47% earnings per share growth over 2020. Jones Lang LaSalle has a VGM Score of B.
DICK'S Sporting Goods, Inc. (DKS - Free Report) : It operates as a major omni-channel sporting goods retailer for team sports, fitness, camping, fishing, tennis, golf, water sports, etc. DICK'S Sporting Goods has a VGM Score of A. Over the past 30 days, this Coraopolis, PA-based firm has seen the Zacks Consensus Estimate for fiscal 2022 improve 29.3%.
AdvanSix Inc. (ASIX - Free Report) : This Parsippany, NJ-based company operates as a manufacturer of Nylon 6 polymer resin used to produce engineered plastics, fibers, filaments and films. AdvanSix has a VGM Score of B and an excellent earnings surprise history of 50.74%, on average, for the last four quarters.
Ternium S.A. (TX - Free Report) : Ternium is a maker of steel and iron. Carrying a VGM Score of B, this Luxembourg-headquartered company’s expected EPS growth rate for three to five years is currently 18.6%, which compares favorably with the industry's growth rate of 16.6%.
Matson, Inc. (MATX - Free Report) : Matson is a transportation services company with a focus on the Pacific region. The 2021 Zacks Consensus Estimate for this Honolulu, HI-based firm indicates 147.3% earnings per share growth over 2020. Matson has a VGM Score of A.
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.