Back to top

Image: Bigstock

5 Stocks With Recent Price Strength to Enrich Your Portfolio

Read MoreHide Full Article

Wall Street entered August after an impressive bull run in July. The July rally snapped six months of rigorous market meltdown. Last month was the best since November 2020. The bull run is likely to continue in August supported by better-than-expected second-quarter earnings results and solid economic data. These two positives have eased to some extent the growing concerns of a near-term recession.

A high dose of interest rate therapy and extremely tight monetary control by the Fed to combat the  record-high inflation might give positive signals. On Jul 27, Fed Chairman Jerome Powell indicated that the central bank might reduce the magnitude of rate hikes going forward, depending on economic data.

However, both Powell and Treasury Secretary Janet Yellen said that despite two consecutive quarters of U.S. GDP contraction, the economy is not in recession as major macro-economic variables do not indicate so.

In line with the recent Wall Street rally, a handful of stocks have shown price strength. These stocks are likely to gain in the near term buoyed by a favorable Zacks Rank. Five of them are — Sensus Healthcare Inc. (SRTS - Free Report) , Super Micro Computer Inc. (SMCI - Free Report) , Universal Logistics Holdings Inc. (ULH - Free Report) , Arcosa Inc. (ACA - Free Report) and Celsius Holdings Inc. (CELH - Free Report) .

Here’s How We Arrived at the Picks

We have primarily targeted stocks that have freshly been on a bull run. 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 it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.

However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed 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 narrowed down the search from over 7,700 stocks to 14.

Let’s discuss five out of these 14 stocks:
 
Sensus Healthcare is a medical device company specializing in the treatment of non-melanoma skin cancers and other skin conditions, such as keloids, with superficial radiation therapy. SRTS’ portfolio of treatment devices consists of the SRT-100 and SRT-100 Vision.

The stock price of Sensus Healthcare has soared 52.8% in the past four weeks. SRTS has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.9% over the last 7 days.

Super Micro Computer designs, develops, manufactures and sells energy-efficient, application optimized server solutions based on the x86 architecture. SMCI’s solutions include a range of rack mount and blade server systems, as well as components. Super Micro Computer emphasizes superior product design and uncompromising quality control to produce industry-leading server-boards, chassis and server systems.

The stock price of SMCI has jumped 51% in the past four weeks. Super Micro Computer has an expected earnings growth rate of 7.1% for the current year (ending June 2023). The Zacks Consensus Estimate for current-year earnings has improved 17.8% over the last 30 days.

Universal Logistics provides transportation and logistics solutions in the United States, Mexico, Canada, and Colombia. ULH offers truckload services, which include dry van, flatbed, heavy-haul, and refrigerated operations; domestic and international freight forwarding, and customs brokerage services, and final mile and ground expedite services.

The stock price of Universal Logistics has climbed 37.2% in the past four weeks. ULH has an expected earnings growth rate of 80.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2.8% over the last 30 days.

Arcosa is a manufacturer of infrastructure-related products and services for the construction, energy and transportation markets. ACA’s principal business segment consists of Construction Products Group, the Energy Equipment Group and the Transportation Products Group.

The stock price of Arcosa has surged 36% in the past four weeks. ACA has an expected earnings growth rate of 7.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 13.7% over the last 7 days.

Celsius Holdings specializes in commercializing healthier, nutritional functional foods, beverages and dietary supplements. CELH sells its products through grocery, drug, convenience, club and mass, and health and fitness channels. Celsius Holdings’ products are produced in Mooresville, NC, and Monroe, WI. Celsius Holdings serves customers in the United States and internationally.

The stock price of CELH has advanced 29.2% in the past four weeks. Celsius Holdings has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 68% 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 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.