We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 Stocks With Recent Price Strength to Maximize Your Gains
Read MoreHide Full Article
U.S. stock markets have rallied year to date after wrapping up a dismal 2022, which was the worst year since 2008 and marked the termination of a three-year winning streak. Year to date, the three major indexes — the Dow, the S&P 500 and the Nasdaq Composite — have rallied 2.8%,7.7% and 14.3%, respectively.
The Fed raised the benchmark interest rate by 4.25% in 2022 to the range of 4.25-4.5%. The market currently expects the central bank to increase the interest rate by maximum 75 basis points in 2023.
Some financial analysts expect the first rate cut to come in early 2024. A lower interest rate and lighter monetary control will be good for the stock market as it will boost the margins of most companies. A lower discount rate will also increase the net present value of stock investing.
Headwinds related to the pandemic are also behind us. China has been gradually reopening since the beginning of this year after strict lockdowns last year. This will help revive the completely devastated global-supply chain system. Global trade will also gain momentum.
The U.S. labor market remains resilient. Nonfarm payrolls in January came in at 517,000 well above the consensus estimate of 198,000. The unemployment rate dropped to 3.4%, below the consensus mark of 3.6%.
Several stocks have shown price strength buoyed by market rally. These stocks are likely to gain in the near term and are backed by a favorable Zacks Rank. Five of them are — Thermon Group Holdings Inc. (THR - Free Report) , Weatherford International plc (WFRD - Free Report) , Merchants Bancorp (MBIN - Free Report) , Atour Lifestyle Holdings Ltd. (ATAT - Free Report) and Aehr Test Systems (AEHR - 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 21.
Let’s discuss five out of these 21 stocks:
Thermon Group is engaged in providing engineered thermal solutions, known as heat tracing, for process industries, including energy, chemical processing and power generation. THR’s products provide an external heat source to pipes, vessels and instruments for the purposes of freeze protection, temperature and flow maintenance and environmental monitoring.
Products offered by THR include heating cables, tubing bundles and control systems while services offered by it include design optimization, engineering, installation and maintenance services.
The stock price of Thermon Group has jumped 20.6% in the past four weeks. It has an expected earnings growth rate of 89.2% for the current year (ending March 2023). The Zacks Consensus Estimate for current-year earnings has improved 16.3% over the past 30 days.
Weatherford International provides oil field services and equipment. The company offers drilling solutions, gas well unloading, restoration and other related activities. WFRD operates through three segments: Drilling and Evaluation, Well Construction and Completions, and Production and Intervention.
The stock price of WFRD has climbed 20.4% in the past four weeks. Weatherford International has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 44.6% over the past seven days.
Merchants Bancorp operates as a diversified bank holding company in the United States. MBIN operates through the Multi-family Mortgage Banking, Mortgage Warehousing, and Banking segments.
MBIN provides multi-family housing and health care facility financing, mortgage warehousing, retail and correspondent residential mortgage banking, agricultural lending and traditional community banking services, through its subsidiaries.
The stock price of Merchants Bancorp has surged 20.3% in the past four weeks. It has expected earnings growth of 5.8% for the current year. The Zacks Consensus Estimate for the current year has improved 10.5% over the past 30 days.
Atour Lifestyle operates a chain of hotels in China. ATAT operates a series of themed hotels, including music hotels, basketball hotels, and literary hotels catering to the various lifestyles across different age groups with varied interests. ATAT also provides hotel management services, including day-to-day management services of the hotels for the franchisees; and sells hotel supplies and other products.
The stock price of Atour Lifestyle has advanced 20% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for next-year earnings has improved 27.6% over the past 60 days.
Aehr Test Systems develops, manufactures and sells systems that are designed to reduce the cost of testing DRAMs and other memory devices, perform reliability screening or burn-in of complex logic and memory devices, and enable IC manufacturers to perform test and burn-in of bare die.
Leveraging its expertise as a long-time leading provider of burn-in equipment, with over 2,000 systems installed worldwide, AEHR has developed and introduced two innovative product families, the MTX system and the DiePak-Registered Trademark- carrier.
The stock price of AEHR has rallied 18.3% in the past four weeks. Aehr Test Systems has an expected earnings growth rate of 45.2% for the current year (ending May 2023). The Zacks Consensus Estimate for current-year earnings has improved 17.3% over the past 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 to Maximize Your Gains
U.S. stock markets have rallied year to date after wrapping up a dismal 2022, which was the worst year since 2008 and marked the termination of a three-year winning streak. Year to date, the three major indexes — the Dow, the S&P 500 and the Nasdaq Composite — have rallied 2.8%,7.7% and 14.3%, respectively.
The Fed raised the benchmark interest rate by 4.25% in 2022 to the range of 4.25-4.5%. The market currently expects the central bank to increase the interest rate by maximum 75 basis points in 2023.
Some financial analysts expect the first rate cut to come in early 2024. A lower interest rate and lighter monetary control will be good for the stock market as it will boost the margins of most companies. A lower discount rate will also increase the net present value of stock investing.
Headwinds related to the pandemic are also behind us. China has been gradually reopening since the beginning of this year after strict lockdowns last year. This will help revive the completely devastated global-supply chain system. Global trade will also gain momentum.
The U.S. labor market remains resilient. Nonfarm payrolls in January came in at 517,000 well above the consensus estimate of 198,000. The unemployment rate dropped to 3.4%, below the consensus mark of 3.6%.
Several stocks have shown price strength buoyed by market rally. These stocks are likely to gain in the near term and are backed by a favorable Zacks Rank. Five of them are — Thermon Group Holdings Inc. (THR - Free Report) , Weatherford International plc (WFRD - Free Report) , Merchants Bancorp (MBIN - Free Report) , Atour Lifestyle Holdings Ltd. (ATAT - Free Report) and Aehr Test Systems (AEHR - 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 21.
Let’s discuss five out of these 21 stocks:
Thermon Group is engaged in providing engineered thermal solutions, known as heat tracing, for process industries, including energy, chemical processing and power generation. THR’s products provide an external heat source to pipes, vessels and instruments for the purposes of freeze protection, temperature and flow maintenance and environmental monitoring.
Products offered by THR include heating cables, tubing bundles and control systems while services offered by it include design optimization, engineering, installation and maintenance services.
The stock price of Thermon Group has jumped 20.6% in the past four weeks. It has an expected earnings growth rate of 89.2% for the current year (ending March 2023). The Zacks Consensus Estimate for current-year earnings has improved 16.3% over the past 30 days.
Weatherford International provides oil field services and equipment. The company offers drilling solutions, gas well unloading, restoration and other related activities. WFRD operates through three segments: Drilling and Evaluation, Well Construction and Completions, and Production and Intervention.
The stock price of WFRD has climbed 20.4% in the past four weeks. Weatherford International has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 44.6% over the past seven days.
Merchants Bancorp operates as a diversified bank holding company in the United States. MBIN operates through the Multi-family Mortgage Banking, Mortgage Warehousing, and Banking segments.
MBIN provides multi-family housing and health care facility financing, mortgage warehousing, retail and correspondent residential mortgage banking, agricultural lending and traditional community banking services, through its subsidiaries.
The stock price of Merchants Bancorp has surged 20.3% in the past four weeks. It has expected earnings growth of 5.8% for the current year. The Zacks Consensus Estimate for the current year has improved 10.5% over the past 30 days.
Atour Lifestyle operates a chain of hotels in China. ATAT operates a series of themed hotels, including music hotels, basketball hotels, and literary hotels catering to the various lifestyles across different age groups with varied interests. ATAT also provides hotel management services, including day-to-day management services of the hotels for the franchisees; and sells hotel supplies and other products.
The stock price of Atour Lifestyle has advanced 20% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for next-year earnings has improved 27.6% over the past 60 days.
Aehr Test Systems develops, manufactures and sells systems that are designed to reduce the cost of testing DRAMs and other memory devices, perform reliability screening or burn-in of complex logic and memory devices, and enable IC manufacturers to perform test and burn-in of bare die.
Leveraging its expertise as a long-time leading provider of burn-in equipment, with over 2,000 systems installed worldwide, AEHR has developed and introduced two innovative product families, the MTX system and the DiePak-Registered Trademark- carrier.
The stock price of AEHR has rallied 18.3% in the past four weeks. Aehr Test Systems has an expected earnings growth rate of 45.2% for the current year (ending May 2023). The Zacks Consensus Estimate for current-year earnings has improved 17.3% over the past 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.