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5 Stocks With Recent Price Strength as Markets Move Northward

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Wall Street completed a strong August maintaining the northward journey in 2021. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have advanced 1.2%, 2.9% and 4%, respectively. The small-cap specific Russell 2000 has gained 2.1%. Year to date, the Dow, the S&P 500 and the Nasdaq Composite have rallied 15.4%, 20.5% and 18.8%, respectively.

Several economists and financial experts were concerned that August may be volatile due to the resurgence of the Delta variant of coronavirus, high inflationary pressure, lingering supply-chain disruptions and shortage of labor.

The market’s benchmark — the S&P 500 Index — ended the first eight months of 2021 with its strongest year-to-date gain since 1997. The broad-market index also ended in the positive zone for seven months in a row, since a 10-month winning run ended in December 2017. In August, the three major stock indexes recorded fresh all-time and closing highs.

On Aug 27, Fed Chairman Jerome Powell, in his annual Jackson Hole symposium lecture, signaled tapering of the central bank’s $120 billion per month bond-buying program. At present, the Fed is buying $80 billion of Treasury bonds and $40 billion of mortgage-backed bonds per month as a pandemic-induced monetary stimulus.

However, Fed Chair has refrained from giving any clue as to when tapering will start or the initial amount by which the quantitative easing program will be reduced. Moreover, Powell has said that the economy has to improve a lot, especially related to the labor market, to achieve the Fed’s target of substantial progress. The central bank will think about raising the benchmark interest rate only after the economy achieves that target.

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 10.

Here we present five out of those 10 stocks:

Veritiv Corp. (VRTV - Free Report) operates as a business-to-business provider of value-added packaging products and services, as well as facility solutions, print, and publishing products and services in the United States, Canada, Mexico, and internationally.

The company’s stock price has soared 47.3% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 45.6% over the last 30 days.

Grindrod Shipping Holdings Ltd. (GRIN - Free Report) operates a diversified fleet of owned, long-term chartered-in and joint venture-owned drybulk and liquid-bulk vessels. It operates primarily in London, Durban, Cape Town, Tokyo and Rotterdam.

The stock price has jumped 39% 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 current-year earnings has improved 4.4% over the last 7 days.

Costamare Inc. (CMRE - Free Report) operates as a containership owner chartering its vessels to liner companies. The company deploys its containership fleet principally under multi-year time charters with leading liner companies that operate regularly scheduled routes between large commercial ports.

The stock price has climbed 32% 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 current-year earnings has improved 7.6% over the last 60 days.

Pilgrim's Pride Corp. (PPC - Free Report) is engaged in the production, processing, marketing, and distribution of fresh, frozen, and value-added chicken products in the United States, the United Kingdom, Europe, and Mexico.

The stock price has surged 31.7% in the past four weeks. The company has an expected earnings growth rate of 35% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.8% over the last 30 days.

Carriage Services Inc. (CSV - Free Report) provides funeral and cemetery services, and merchandise in the United States. It operates through two segments, Funeral Home Operations and Cemetery Operations.

The stock price has advanced 24.4% in the past four weeks. The company has an expected earnings growth rate of 43% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the last 60 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.