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5 Stocks With Recent Price Strength Defying Market Volatility

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Volatility has returned to Wall Street after an impressive rally in the first eight months of this year. Investors are concerned about the slowing pace of U.S. economic growth, following the rapid spread of the Delta variant of COVID-19. Market participants too are concerned that mounting inflationary pressure may compel the Fed to shift from its ultra-dovish monetary policies.

We are in the middle of September, and the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Campsite — are down 2.2%, 2% and 1.4%, respectively, month to date.

Last week was a disappointing one. The Dow was down 0.1%, marking its third straight weekly decline. This was the blue-chip index’s longest weekly losing streak since the four weeks of loss ended Sep. 25, 2020. The market’s benchmark S&P 500 Index was down 0.6%, reflecting its second straight weekly drop. The Nasdaq Composite fell 0.5%, posting its second successive weekly loss.

On Aug 27, Fed Chairman Jerome Powell, in his annual Jackson Hole symposium lecture, signaled the 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. The central bank will conduct its next FOMC meeting from Sep 21-22.

Wall Street is likely to remain volatile in the near future, despite the fact that the fundamentals of the U.S. economy remain strong and the overall trend of the market remains encouraging.

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 14.

Here we present five out of those 14 stocks:

Euroseas Ltd. (ESEA - Free Report) provides ocean-going transportation services worldwide. It owns and operates containerships that transport dry and refrigerated containerized cargoes, including manufactured products and perishables.

The company’s stock price has soared 70.5% 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 improved 17.5% 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 55% 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 improved 31% over the last 30 days.

Global Ship Lease Inc. (GSL - Free Report) is a rapidly growing containership charter owner with a business of owning and chartering out containerships under long-term, fixed rate charters to world class container liner companies.

The stock price has climbed 31.6% in the past four weeks. The company has an expected earnings growth rate of 80.2% for the current year. The Zacks Consensus Estimate for current-year earnings improved 5.3% over the last 60 days.

Bluegreen Vacations Holding Corp. (BVH - Free Report) operates as a vacation ownership company. It markets and sells vacation ownership interests and manages resorts in leisure and urban destinations, including Orlando, Las Vegas, Myrtle Beach, Charleston and New Orleans, and others.

The stock price has surged 31.4% 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 improved 91.5% over the last 60 days.

Belden Inc. (BDC - Free Report) operates as a signal transmission solutions company in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. It operates in two segments — Enterprise Solutions and Industrial Solutions.

The stock price has advanced 9.7% in the past four weeks. The company has an expected earnings growth rate of 63.6% for the current year. The Zacks Consensus Estimate for current-year earnings improved 20.6% 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 to day. 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.