For Immediate Release
Chicago, IL – December 22, 2022 – Stocks in this week’s article are Clovis Oncology , NiSource (
NI Quick Quote NI - Free Report) , DocuSign ( DOCU Quick Quote DOCU - Free Report) , Root ( ROOT Quick Quote ROOT - Free Report) and Endava ( DAVA Quick Quote DAVA - Free Report) . Bet on 5 Top Stocks with Rising P/E Ratios
Investors always look for stocks with low P/E ratios as the measure indicates undervaluation. This ratio is obtained by dividing a stock's current market price by its historical or estimated earnings. It tells how much an investor needs to shell out per dollar of earnings.
In fact, the golden rule is – the lower the P/E of a stock, the higher its value will be for investors. This is because value investors believe that a stock's current market price is not reflective of its historical/future earnings and, therefore, chances of outperformance are higher.
But there is another side to the story that points to stocks with an increasing P/E. But this often-overlooked trend can prove pivotal in finding great stocks.
How Can Rising P/E Be Helpful?
Investors should note that stock prices move in tandem with earnings performance. If earnings come in stronger, the price of a stock soars. Solid quarterly earnings and guidance in turn boost the earnings forecast, leading to stronger demand for the stock and an uptrend in its price.
So, if the price is rising steadily, it means that investors are assured of the stock's fundamental strength, expect some strong positives out of it as well as solid and faster earnings growth. Moreover, studies have revealed that stocks have seen their P/E ratios jump over 100% from their breakout point in the cycle. So, if you can pick stocks early in their breakout cycle, you can end up seeing considerable gains.
Here are five out of the 27 stocks: Clovis Oncology: Clovis Oncology, Inc. is a biopharmaceutical company focused on acquiring, developing and commercializing innovative anti-cancer agents. The stock has a Zacks Rank #2.
The average earnings surprise of CLVS for the past four quarters is 5.19%.
NiSource: This Zacks Rank #2 energy holding company, together with its subsidiaries, provides natural gas, electricity and other products and services in the United States.
The average earnings surprise of NI for the past four quarters is 0.33%.
DocuSign: Zacks Rank #2 DocuSign is a global provider of cloud-based software. The company's DocuSign Agreement Cloud is a cloud software suite that automates and connects the entire agreement process.
The average earnings surprise of DOCU for the past four quarters is 6.60%.
Root: This is the parent company of Root Insurance Company. It is a technology company revolutionizing personal insurance with a pricing model. ROOT currently carries a Zacks Rank #1.
The average earnings surprise of ROOT for the past four quarters is 22.44%.
Endava: The Zacks Rank #2 company provides information technology services. It offers software engineering, cloud transformation, test automation, technology consulting and other related services.
The average earnings surprise of DAVA for the past four quarters is 11.03%.
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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 For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/amp/stock/news/2031007/bet-on-5-top-stocks-with-rising-pe 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. About Screen of the Week
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Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year.
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Contact: Jim Giaquinto
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