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5 Standout Relative Price Strength Stocks to Buy Right Now
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Since the beginning of this year, Wall Street has been rocked by intense volatility as investors come to terms with soaring inflation. The Russian invasion of Ukraine has only aggravated that problem.
In the United States, several measures of inflation are currently at their highest in four decades. The outbreak of coronavirus has significantly devastated the global supply-chain system in the last two years. Input costs have spiked for businesses. At the same time, strong pent-up demand, supported by massive personal savings, has resulted in surging prices.
Naturally, market watchers remain wary of galloping inflation and the start of a higher interest regime to contain it. The resurgence of new coronavirus cases in China also unnerved investors. As it is, the Ukraine conflict drags on with resolution nowhere in sight.
For investors who might want to stay exposed to the market during this uncertain phase, it is time to focus on good investment opportunities. One of the ways such potential plays could be identified is to look for signs of relative price strength.
Relative Price Strength Strategy
Earnings growth and valuation multiples are indeed important for investors to determine a stock's ability to offer considerable returns. But these are also essential for determining whether a stock’s price performance is better than its peers or the industry average.
If a stock’s performance is lacking that of the broader groups, despite impressive earnings growth or valuation multiples, then something must be wrong.
It’s always advisable to stay away from these stocks and bet on those that are outperforming their respective industry or benchmark. This is because betting on a winner always proves to be lucrative.
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 28 stocks that made it through the screen:
The Mosaic Company (MOS - Free Report) : The Tampa, FL-based firm is a leading producer and marketer of concentrated phosphate and potash for the global agriculture industry. Founded in 2004, Mosaic has a VGM Score of B.
For 2022, MOS has a projected earnings growth rate of 143.5%. Valued at around $28 billion, MOS shares have gained around 134.3% in a year.
Virtu Financial, Inc. (VIRT - Free Report) : The market-leading financial services firm leverages cutting-edge technology to provide execution services and data, analytics and connectivity products to its clients. Virtu Financial has a VGM Score of B. Over the past 30 days, New York-based VIRT saw the Zacks Consensus Estimate for 2022 move up 15.9%.
Virtu Financial beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being 24.8%. Valued at around $6.6 billion, VIRT has gained some 20.5% in a year.
Devon Energy Corporation (DVN - Free Report) : Devon Energy is an independent hydrocarbon company whose oil and gas operations are mainly concentrated in the onshore areas of North America, primarily in the United States. The 2022 Zacks Consensus Estimate for this Oklahoma City, OK-based firm indicates 115.6% year-over-year earnings per share growth. DVN has a VGM Score of B.
Devon Energy beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 18.5%, on average DVN shares have rocketed around 203.2% in a year.
Dow Inc. (DOW - Free Report) : Dow, based in Midland, MI, supplies advanced, sustainable and leading-edge solutions across segments such as packaging, infrastructure and consumer care. The company’s expected EPS growth rate for three to five years is currently 29.9%, which compares favorably with the industry's growth rate of 15.6%. Dow has a VGM Score of B.
Notably, Dow 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 11.1%, on average. Dow shares have gained around 6.1% in a year.
Flex Ltd. (FLEX - Free Report) : Flex provides end-to-end services such as designing, engineering, manufacturing, as well as supply chain services and solutions to original equipment manufacturers. The fiscal 2022 Zacks Consensus Estimate for this Singapore-based firm indicates 19.8% year-over-year earnings per share growth. Flex has a VGM Score of B.
Flex beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.6%, on average. Flex shares have lost around 7.1% 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.
Image: Bigstock
5 Standout Relative Price Strength Stocks to Buy Right Now
Since the beginning of this year, Wall Street has been rocked by intense volatility as investors come to terms with soaring inflation. The Russian invasion of Ukraine has only aggravated that problem.
In the United States, several measures of inflation are currently at their highest in four decades. The outbreak of coronavirus has significantly devastated the global supply-chain system in the last two years. Input costs have spiked for businesses. At the same time, strong pent-up demand, supported by massive personal savings, has resulted in surging prices.
Naturally, market watchers remain wary of galloping inflation and the start of a higher interest regime to contain it. The resurgence of new coronavirus cases in China also unnerved investors. As it is, the Ukraine conflict drags on with resolution nowhere in sight.
For investors who might want to stay exposed to the market during this uncertain phase, it is time to focus on good investment opportunities. One of the ways such potential plays could be identified is to look for signs of relative price strength.
Relative Price Strength Strategy
Earnings growth and valuation multiples are indeed important for investors to determine a stock's ability to offer considerable returns. But these are also essential for determining whether a stock’s price performance is better than its peers or the industry average.
If a stock’s performance is lacking that of the broader groups, despite impressive earnings growth or valuation multiples, then something must be wrong.
It’s always advisable to stay away from these stocks and bet on those that are outperforming their respective industry or benchmark. This is because betting on a winner always proves to be lucrative.
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 28 stocks that made it through the screen:
The Mosaic Company (MOS - Free Report) : The Tampa, FL-based firm is a leading producer and marketer of concentrated phosphate and potash for the global agriculture industry. Founded in 2004, Mosaic has a VGM Score of B.
For 2022, MOS has a projected earnings growth rate of 143.5%. Valued at around $28 billion, MOS shares have gained around 134.3% in a year.
Virtu Financial, Inc. (VIRT - Free Report) : The market-leading financial services firm leverages cutting-edge technology to provide execution services and data, analytics and connectivity products to its clients. Virtu Financial has a VGM Score of B. Over the past 30 days, New York-based VIRT saw the Zacks Consensus Estimate for 2022 move up 15.9%.
Virtu Financial beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being 24.8%. Valued at around $6.6 billion, VIRT has gained some 20.5% in a year.
Devon Energy Corporation (DVN - Free Report) : Devon Energy is an independent hydrocarbon company whose oil and gas operations are mainly concentrated in the onshore areas of North America, primarily in the United States. The 2022 Zacks Consensus Estimate for this Oklahoma City, OK-based firm indicates 115.6% year-over-year earnings per share growth. DVN has a VGM Score of B.
Devon Energy beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 18.5%, on average DVN shares have rocketed around 203.2% in a year.
Dow Inc. (DOW - Free Report) : Dow, based in Midland, MI, supplies advanced, sustainable and leading-edge solutions across segments such as packaging, infrastructure and consumer care. The company’s expected EPS growth rate for three to five years is currently 29.9%, which compares favorably with the industry's growth rate of 15.6%. Dow has a VGM Score of B.
Notably, Dow 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 11.1%, on average. Dow shares have gained around 6.1% in a year.
Flex Ltd. (FLEX - Free Report) : Flex provides end-to-end services such as designing, engineering, manufacturing, as well as supply chain services and solutions to original equipment manufacturers. The fiscal 2022 Zacks Consensus Estimate for this Singapore-based firm indicates 19.8% year-over-year earnings per share growth. Flex has a VGM Score of B.
Flex beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.6%, on average. Flex shares have lost around 7.1% 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.