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5 Relative Price Strength Stocks to Add to Your Portfolio
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Since the beginning of 2022, U.S. stock markets have been rocked by deepening inflation. Last week’s red-hot report — which showed the January consumer-price index near a 40-year high — has mounted pressure on the Federal Reserve to aggressively tighten monetary policy. With the central bank likely to raise interest rate in March, the market is set up for future volatility. Therefore, it is time to focus on good investment opportunities.
Investors generally gauge a stock’s potential returns by examining earnings growth and valuation multiples. At the same time, it’s essential to measure the performance of such a stock relative to its industry or peers, or an appropriate benchmark.
If you see that a stock is underperforming on fundamental factors, it would be prudent to move on and find a better alternative. However, those outperforming their respective sectors in terms of price should be selected because they stand a better chance of providing considerable returns.
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 crucial 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 31 stocks that made it through the screen:
Ralph Lauren Corporation (RL - Free Report) : This New York-based firm is a major designer, marketer and distributor of premium lifestyle products in North America, Europe, Asia, and other parts of the world. Ralph Lauren has a VGM Score of A.
For fiscal 2022, RL has a projected earnings growth rate of 381.2%. Valued at around $8.7 billion, Ralph Lauren shares have gained around 12% in a year.
Schneider National, Inc. (SNDR - Free Report) : The company is a leading transportation and logistics services provider. Schneider National has a VGM Score of B. Over the past 60 days, Green Bay, WI-based SNDR saw the Zacks Consensus Estimate for 2022 move up 10.6%.
Schneider National beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. Valued at around $4.6 billion, SNDR has gained some 16.3% in a year.
W. R. Berkley Corporation (WRB - Free Report) : W. R. Berkley is one of the nation’s largest commercial lines property casualty insurance providers. The 2022 Zacks Consensus Estimate for this Greenwich, CT-based firm indicates 3.9% year-over-year earnings per share growth. WRB has a VGM Score of B.
W. R. Berkley beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 27.5%, on average. WRB shares have rallied around 36.1% in a year.
Marathon Oil Corporation (MRO - Free Report) : Founded in 1887 and headquartered in Houston, TX, Marathon Oil is a leading hydrocarbon exploration and production company with operations in the United States and Africa. MRO has a VGM Score of B.
Notably, Marathon Oil beat the Zacks Consensus Estimate for earnings in each of the last four quarters. MRO has a trailing four-quarter earnings surprise of roughly 37.4%, on average. The company’s shares have surged around 151.2% in a year.
Lithia Motors, Inc. (LAD - Free Report) : Lithia Motors is one of the leading automotive retailers of new and used vehicles, and related services in the United States. The company’s expected EPS growth rate for three to five years is currently 21.4%, which compares favorably with the industry's growth rate of 18.2%. LAD has a VGM Score of A.
Notably, Lithia Motors beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 30.6%, on average. LAD shares have lost around 17.3% 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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5 Relative Price Strength Stocks to Add to Your Portfolio
Since the beginning of 2022, U.S. stock markets have been rocked by deepening inflation. Last week’s red-hot report — which showed the January consumer-price index near a 40-year high — has mounted pressure on the Federal Reserve to aggressively tighten monetary policy. With the central bank likely to raise interest rate in March, the market is set up for future volatility. Therefore, it is time to focus on good investment opportunities.
Investors generally gauge a stock’s potential returns by examining earnings growth and valuation multiples. At the same time, it’s essential to measure the performance of such a stock relative to its industry or peers, or an appropriate benchmark.
If you see that a stock is underperforming on fundamental factors, it would be prudent to move on and find a better alternative. However, those outperforming their respective sectors in terms of price should be selected because they stand a better chance of providing considerable returns.
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 crucial 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 31 stocks that made it through the screen:
Ralph Lauren Corporation (RL - Free Report) : This New York-based firm is a major designer, marketer and distributor of premium lifestyle products in North America, Europe, Asia, and other parts of the world. Ralph Lauren has a VGM Score of A.
For fiscal 2022, RL has a projected earnings growth rate of 381.2%. Valued at around $8.7 billion, Ralph Lauren shares have gained around 12% in a year.
Schneider National, Inc. (SNDR - Free Report) : The company is a leading transportation and logistics services provider. Schneider National has a VGM Score of B. Over the past 60 days, Green Bay, WI-based SNDR saw the Zacks Consensus Estimate for 2022 move up 10.6%.
Schneider National beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. Valued at around $4.6 billion, SNDR has gained some 16.3% in a year.
W. R. Berkley Corporation (WRB - Free Report) : W. R. Berkley is one of the nation’s largest commercial lines property casualty insurance providers. The 2022 Zacks Consensus Estimate for this Greenwich, CT-based firm indicates 3.9% year-over-year earnings per share growth. WRB has a VGM Score of B.
W. R. Berkley beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 27.5%, on average. WRB shares have rallied around 36.1% in a year.
Marathon Oil Corporation (MRO - Free Report) : Founded in 1887 and headquartered in Houston, TX, Marathon Oil is a leading hydrocarbon exploration and production company with operations in the United States and Africa. MRO has a VGM Score of B.
Notably, Marathon Oil beat the Zacks Consensus Estimate for earnings in each of the last four quarters. MRO has a trailing four-quarter earnings surprise of roughly 37.4%, on average. The company’s shares have surged around 151.2% in a year.
Lithia Motors, Inc. (LAD - Free Report) : Lithia Motors is one of the leading automotive retailers of new and used vehicles, and related services in the United States. The company’s expected EPS growth rate for three to five years is currently 21.4%, which compares favorably with the industry's growth rate of 18.2%. LAD has a VGM Score of A.
Notably, Lithia Motors beat the Zacks Consensus Estimate for earnings in each of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 30.6%, on average. LAD shares have lost around 17.3% 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.