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5 Stocks With Recent Price Strength in an Uncertain September
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Wall Street entered September with serious near-term concerns. Inflation continues to be at a 40-year high despite an increase in the Fed Fund rate from almost zero to 2.5% from March to July. Moreover, the central bank has started to systematically reduce the size of its $9 trillion balance sheet since June.
Fed Chairman Jerome Powell and various other top Fed officials with voting rights have indicated that the rigorous rate hike will continue until inflation is at least down to near the Fed’s 2% target rate. As a result, market participants are highly concerned about a recession in the U.S. economy in the near future.
Moreover, September is historically known as the worst-performing month on Wall Street. Despite headwinds, 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 — Alliance Resource Partners L.P. (ARLP - Free Report) , Digi International Inc. (DGII - Free Report) , MGP Ingredients Inc. (MGPI - Free Report) , Lantheus Holdings Inc. (LNTH - Free Report) and Carter Bankshares Inc. (CARE - 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 11.
Let’s discuss five out of these 11 stocks:
Alliance Resource is a diversified producer and marketer of coal to major U.S. utilities and industrial users. ARLP currently operates mining complexes in Illinois, Indiana, Kentucky and Maryland. Some of its mining complexes are underground and one has both surface and underground mines.
Alliance Resource produces a diverse range of steam coals with varying sulfur and heat contents, which enable them to satisfy the broad range of specifications demanded by their customers.
The stock price of ARLP has appreciated 11.4% in the past four weeks. Alliance Resource has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 29.1% over the last 60 days.
Digi International is a leading global provider of business and mission-critical Internet of Things products and services. DGII helps its customers to create next-generation connected products and deploy and manage critical communications infrastructures in demanding environments with high levels of security, relentless reliability and bulletproof performance.
The stock price of DGII has advanced 7.9% in the past four weeks. Digi International has an expected earnings growth rate of 12.6% for the current year (ending September 2023). The Zacks Consensus Estimate for current-year earnings has improved 4% over the last 30 days.
MGP Ingredients produces and supplies distilled spirits, and specialty wheat proteins and starch food ingredients. MGPI operates through two segments, Distillery Products and Ingredient Solutions.
The stock price of MGP Ingredients has gained 4.2% in the past four weeks. MGPI has an expected earnings growth rate of 10.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 6.1% over the last 60 days.
Lantheus Holdings is involved in developing, manufacturing, selling and distributing diagnostic medical imaging agents and products for the diagnosis of cardiovascular and other diseases. LNTH serves to hospitals, clinics, group practices, integrated delivery networks, group purchasing organizations, radiopharmacies and wholesalers.
The stock price of Lantheus Holdings has risen 3.7% in the past four weeks. LNTH has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 15.9% over the last 60 days.
Carter Bankshares is a bank holding company and the parent company of Carter Bank & Trust. CARE offers checking, savings, retirement, money market accounts, longer-term certificates of deposit as well as loans.
The stock price of CARE was up 3.3% in the past four weeks. Carter Bankshares has an expected earnings growth rate of 70.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.3% 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.
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 Stocks With Recent Price Strength in an Uncertain September
Wall Street entered September with serious near-term concerns. Inflation continues to be at a 40-year high despite an increase in the Fed Fund rate from almost zero to 2.5% from March to July. Moreover, the central bank has started to systematically reduce the size of its $9 trillion balance sheet since June.
Fed Chairman Jerome Powell and various other top Fed officials with voting rights have indicated that the rigorous rate hike will continue until inflation is at least down to near the Fed’s 2% target rate. As a result, market participants are highly concerned about a recession in the U.S. economy in the near future.
Moreover, September is historically known as the worst-performing month on Wall Street. Despite headwinds, 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 — Alliance Resource Partners L.P. (ARLP - Free Report) , Digi International Inc. (DGII - Free Report) , MGP Ingredients Inc. (MGPI - Free Report) , Lantheus Holdings Inc. (LNTH - Free Report) and Carter Bankshares Inc. (CARE - 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 11.
Let’s discuss five out of these 11 stocks:
Alliance Resource is a diversified producer and marketer of coal to major U.S. utilities and industrial users. ARLP currently operates mining complexes in Illinois, Indiana, Kentucky and Maryland. Some of its mining complexes are underground and one has both surface and underground mines.
Alliance Resource produces a diverse range of steam coals with varying sulfur and heat contents, which enable them to satisfy the broad range of specifications demanded by their customers.
The stock price of ARLP has appreciated 11.4% in the past four weeks. Alliance Resource has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 29.1% over the last 60 days.
Digi International is a leading global provider of business and mission-critical Internet of Things products and services. DGII helps its customers to create next-generation connected products and deploy and manage critical communications infrastructures in demanding environments with high levels of security, relentless reliability and bulletproof performance.
The stock price of DGII has advanced 7.9% in the past four weeks. Digi International has an expected earnings growth rate of 12.6% for the current year (ending September 2023). The Zacks Consensus Estimate for current-year earnings has improved 4% over the last 30 days.
MGP Ingredients produces and supplies distilled spirits, and specialty wheat proteins and starch food ingredients. MGPI operates through two segments, Distillery Products and Ingredient Solutions.
MGP Ingredients’ Distillery Products segment primarily offers food-grade alcohol, fuel-grade alcohol, and distillers feed. MGPI’s Ingredient Solutions segment primarily provides specialty wheat starches and proteins, commodity wheat starches, and commodity vital wheat gluten.
The stock price of MGP Ingredients has gained 4.2% in the past four weeks. MGPI has an expected earnings growth rate of 10.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 6.1% over the last 60 days.
Lantheus Holdings is involved in developing, manufacturing, selling and distributing diagnostic medical imaging agents and products for the diagnosis of cardiovascular and other diseases. LNTH serves to hospitals, clinics, group practices, integrated delivery networks, group purchasing organizations, radiopharmacies and wholesalers.
The stock price of Lantheus Holdings has risen 3.7% in the past four weeks. LNTH has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 15.9% over the last 60 days.
Carter Bankshares is a bank holding company and the parent company of Carter Bank & Trust. CARE offers checking, savings, retirement, money market accounts, longer-term certificates of deposit as well as loans.
The stock price of CARE was up 3.3% in the past four weeks. Carter Bankshares has an expected earnings growth rate of 70.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.3% 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.