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Play Relative Price Strength With 5 Buy-Ranked Stocks
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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 essential 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 for 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 five of the 10 stocks that made it through the screen:
Guess?, Inc. (GES - Free Report) : Founded in 1981 and headquartered in Los Angeles, CA, Guess? designs, markets, distributes and licenses casual apparel and accessories for men, women and children. Guess? has a VGM Score of A.
Notably, Guess? has an excellent earnings surprise history. GES surpassed The Zacks Consensus Estimate for earnings in each of the last four quarters, delivering a surprise of 97%, on average. The company’s shares have rocketed around 30.5% in a year.
Bluegreen Vacations Holding Corporation : The company markets vacation ownership interests and manages resorts in popular destinations. Bluegreen Vacations has a VGM Score of A. Over the past 60 days, Boca Raton, FL-based BVH saw the Zacks Consensus Estimate for 2021 move up 28.4%.
Bluegreen Vacations has a projected earnings growth rate of 199.3% for the current year. The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 695%. BCH has rallied around 144.8% in a year.
Titan Machinery Inc. (TITN - Free Report) : Titan Machinery is an agricultural and construction equipment retailer in the United States and Europe. The fiscal 2022 Zacks Consensus Estimate for this West Fargo, ND-based firm indicates 103.2% earnings per share growth over 2021. TITN has a VGM Score of A.
Titan Machinery beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 93.3%, on average. TTIN shares have gained around 77.4% in a year.
AutoZone, Inc. (AZO - Free Report) : AutoZone is one of the leading specialty retailers and distributors of automotive replacement parts and accessories in the United States. The fiscal 2022 Zacks Consensus Estimate for this Memphis, TN-based firm indicates 2.9% earnings per share growth over 2021. AZO has a VGM Score of B.
AutoZone beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 23.2%, on average. AZO shares have gained around 70.1% in a year.
United Natural Foods, Inc. (UNFI - Free Report) : This Providence, RI-based firm is a leading distributor of natural, organic and specialty food and non-food products in the United States and Canada. United Natural Foods has a VGM Score of B.
United Natural Foods has a projected earnings growth rate of 5.2% for the current fiscal year. The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 35.4%. UNFI shares have gained around 247.5% in a year.
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.
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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Play Relative Price Strength With 5 Buy-Ranked Stocks
Whether a stock has the potential to offer considerable returns is determined primarily by its earnings and valuation ratios. Simultaneously, it is essential 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 for 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 five of the 10 stocks that made it through the screen:
Guess?, Inc. (GES - Free Report) : Founded in 1981 and headquartered in Los Angeles, CA, Guess? designs, markets, distributes and licenses casual apparel and accessories for men, women and children. Guess? has a VGM Score of A.
Notably, Guess? has an excellent earnings surprise history. GES surpassed The Zacks Consensus Estimate for earnings in each of the last four quarters, delivering a surprise of 97%, on average. The company’s shares have rocketed around 30.5% in a year.
Bluegreen Vacations Holding Corporation : The company markets vacation ownership interests and manages resorts in popular destinations. Bluegreen Vacations has a VGM Score of A. Over the past 60 days, Boca Raton, FL-based BVH saw the Zacks Consensus Estimate for 2021 move up 28.4%.
Bluegreen Vacations has a projected earnings growth rate of 199.3% for the current year. The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 695%. BCH has rallied around 144.8% in a year.
Titan Machinery Inc. (TITN - Free Report) : Titan Machinery is an agricultural and construction equipment retailer in the United States and Europe. The fiscal 2022 Zacks Consensus Estimate for this West Fargo, ND-based firm indicates 103.2% earnings per share growth over 2021. TITN has a VGM Score of A.
Titan Machinery beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 93.3%, on average. TTIN shares have gained around 77.4% in a year.
AutoZone, Inc. (AZO - Free Report) : AutoZone is one of the leading specialty retailers and distributors of automotive replacement parts and accessories in the United States. The fiscal 2022 Zacks Consensus Estimate for this Memphis, TN-based firm indicates 2.9% earnings per share growth over 2021. AZO has a VGM Score of B.
AutoZone beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 23.2%, on average. AZO shares have gained around 70.1% in a year.
United Natural Foods, Inc. (UNFI - Free Report) : This Providence, RI-based firm is a leading distributor of natural, organic and specialty food and non-food products in the United States and Canada. United Natural Foods has a VGM Score of B.
United Natural Foods has a projected earnings growth rate of 5.2% for the current fiscal year. The company beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 35.4%. UNFI shares have gained around 247.5% in a year.
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.