For Immediate Release
Chicago, IL – October 27, 2021 – Stocks in this week’s article are Mastercraft Boat Holdings Inc. (
MCFT Quick Quote MCFT - Free Report) , Casey's General Stores Inc. ( CASY Quick Quote CASY - Free Report) , SilverCrest Metals Inc. ( SILV Quick Quote SILV - Free Report) , Kennametal Inc. ( KMT Quick Quote KMT - Free Report) and Eagle Materials Inc. ( EXP Quick Quote EXP - Free Report) . Forget Bargains, Play 5 Stocks with Rising P/E Instead
Stocks with low P/E are always investors’ favorites as the ratio indicates undervaluation. This ratio is obtained by dividing a stock’s current market price by its historical or estimated earnings. It measures how much an investor needs to shell out per dollar of earnings.
So, the golden rule is — the lower the P/E of a stock, the higher 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.
Naturally, there are very few investors who pay attention to stocks with an increasing P/E. But this often-overlooked trend can prove worthwhile 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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1816412/forget-bargains-play-5-stocks-with-rising-pe-instead 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
Zacks.com 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
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year.
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Contact: Jim Giaquinto
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