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5 Stocks With Recent Price Strength Amid Extreme Volatility
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Volatility has been showing its ugly face again on Wall Street for the past month. The welcome rally from the beginning of this year to mid-February evaporated last month after a sudden spike in January’s inflation rate. Market participants were nervous that the Fed will continue rigorous interest rate hikes for a longer period.
In March, the already-high interest rate started taking its toll on the banking sector. Last week, two major regional banks in the United Sates, namely, Silicon Velley Bank and Signature Bank collapsed, forcing the government to rescue depositors.
On Mar 15, the global financial markets were rattled by Credit Suisse Group AG (CS). Earlier this week, the bank reported that it had found “certain material weaknesses” in its internal control over financial reporting for 2021 and 2022. The bank also stated that depositors had withdrawn more than $120 billion in fourth-quarter 2022.
As a result, Credit Suisse Group also needs immediate financing. However, the Swiss lender’s largest investor, the Saudi National Bank declined, to invest more as the bank is already holds 10% of Credit Swiss, the maximum limit its regulator can permit. Consequently, shares of Credit Swiss plunged.
Market participants are concerned that the lending business of the banking system will suffer due to a lack of demand owing to the higher interest rate. At the same time, aggregate demand will remain subdued also due to the higher interest rate and sticky inflation. This could dry up liquidity in the economy and lead to a recession.
Despite the headwinds, a few stocks have shown price strength. These stocks are likely to gain in the near term and are backed by a favorable Zacks Rank. Five of them are — Universal Insurance Holdings Inc. (UVE - Free Report) , Asure Software Inc. (ASUR - Free Report) , MYR Group Inc. (MYRG - Free Report) , AAON Inc. (AAON - Free Report) and Arista Networks Inc. (ANET - 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 or 2: 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 10.
Let’s discuss five out of these 10 stocks:
Universal Insurance is currently engaged in insurance underwriting, distribution and claims. UVE generates revenue from the collection and investment of premiums. UVE’s agency operations generate income from policy fees, commissions, premium financing referral fees and the marketing of ancillary services.
The stock price of Universal Insurance has soared 49.8% in the past four weeks. It has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved 10% over the last 30 days.
Asure Software is a provider of Web-based workforce management solutions. ASUR offers Web-based workforce management solutions that enable organizations to manage their office environment, as well as their human resource and payroll processes. ASUR offers its workforce management solutions under two product lines: NetSimplicity and iEmployee.
The stock price of Asure Software has jumped 27.2% 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 current-year earnings has improved 25% over the last 30 days.
MYR Group is a holding company of leading specialty contractors serving the electrical infrastructure market throughout the United States and Canada. MYRGoperates in two segments, Transmission and Distribution, and Commercial and Industrial.
MYRG’s comprehensive services on electric transmission and distribution networks and substation facilities include design, engineering, procurement, construction, upgrade, maintenance and repair services.
The stock price of MYR Group has climbed 18.8% in the past four weeks. It has an expected earnings growth rate 10.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.8% over the last 30 days.
AAON is a manufacturer of air-conditioning and heating equipment consisting of rooftop units, chillers, air-handling units, condensing units and coils. AAON’s products serve the new construction and replacement markets. AAON has gained market share through its semi-custom product lines, which offer customer value, quality, function, serviceability and efficiency.
The stock price of AAON has surged 11.8% in the past four weeks. It has an expected earnings growth rate of 44.1% for the current year. The Zacks Consensus Estimate for next-year earnings has improved 5.1% over the last 30 days.
Arista Networks develops markets and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. ANET benefits from an expanding cloud networking market, driven by strong demand for scalable infrastructure. The company recently joined the Microsoft Intelligent Security Association.
Arista Networks continues to gain from solid momentum and diversification across its top verticals and product lines. It is well-poised for growth in the data-driven cloud networking business, with proactive platforms and predictive operations. ANET introduced an enterprise-grade Software-as-a-Service offering for its flagship CloudVision platform.
The stock price of Arista Networks has advanced 8.7% in the past four weeks. It has an expected earnings growth rate of 26.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 10.7% over the last 30 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.
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5 Stocks With Recent Price Strength Amid Extreme Volatility
Volatility has been showing its ugly face again on Wall Street for the past month. The welcome rally from the beginning of this year to mid-February evaporated last month after a sudden spike in January’s inflation rate. Market participants were nervous that the Fed will continue rigorous interest rate hikes for a longer period.
In March, the already-high interest rate started taking its toll on the banking sector. Last week, two major regional banks in the United Sates, namely, Silicon Velley Bank and Signature Bank collapsed, forcing the government to rescue depositors.
On Mar 15, the global financial markets were rattled by Credit Suisse Group AG (CS). Earlier this week, the bank reported that it had found “certain material weaknesses” in its internal control over financial reporting for 2021 and 2022. The bank also stated that depositors had withdrawn more than $120 billion in fourth-quarter 2022.
As a result, Credit Suisse Group also needs immediate financing. However, the Swiss lender’s largest investor, the Saudi National Bank declined, to invest more as the bank is already holds 10% of Credit Swiss, the maximum limit its regulator can permit. Consequently, shares of Credit Swiss plunged.
Market participants are concerned that the lending business of the banking system will suffer due to a lack of demand owing to the higher interest rate. At the same time, aggregate demand will remain subdued also due to the higher interest rate and sticky inflation. This could dry up liquidity in the economy and lead to a recession.
Despite the headwinds, a few stocks have shown price strength. These stocks are likely to gain in the near term and are backed by a favorable Zacks Rank. Five of them are — Universal Insurance Holdings Inc. (UVE - Free Report) , Asure Software Inc. (ASUR - Free Report) , MYR Group Inc. (MYRG - Free Report) , AAON Inc. (AAON - Free Report) and Arista Networks Inc. (ANET - 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 or 2: 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 10.
Let’s discuss five out of these 10 stocks:
Universal Insurance is currently engaged in insurance underwriting, distribution and claims. UVE generates revenue from the collection and investment of premiums. UVE’s agency operations generate income from policy fees, commissions, premium financing referral fees and the marketing of ancillary services.
The stock price of Universal Insurance has soared 49.8% in the past four weeks. It has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved 10% over the last 30 days.
Asure Software is a provider of Web-based workforce management solutions. ASUR offers Web-based workforce management solutions that enable organizations to manage their office environment, as well as their human resource and payroll processes. ASUR offers its workforce management solutions under two product lines: NetSimplicity and iEmployee.
The stock price of Asure Software has jumped 27.2% 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 current-year earnings has improved 25% over the last 30 days.
MYR Group is a holding company of leading specialty contractors serving the electrical infrastructure market throughout the United States and Canada. MYRGoperates in two segments, Transmission and Distribution, and Commercial and Industrial.
MYRG’s comprehensive services on electric transmission and distribution networks and substation facilities include design, engineering, procurement, construction, upgrade, maintenance and repair services.
The stock price of MYR Group has climbed 18.8% in the past four weeks. It has an expected earnings growth rate 10.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.8% over the last 30 days.
AAON is a manufacturer of air-conditioning and heating equipment consisting of rooftop units, chillers, air-handling units, condensing units and coils. AAON’s products serve the new construction and replacement markets. AAON has gained market share through its semi-custom product lines, which offer customer value, quality, function, serviceability and efficiency.
The stock price of AAON has surged 11.8% in the past four weeks. It has an expected earnings growth rate of 44.1% for the current year. The Zacks Consensus Estimate for next-year earnings has improved 5.1% over the last 30 days.
Arista Networks develops markets and sells cloud networking solutions in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. ANET benefits from an expanding cloud networking market, driven by strong demand for scalable infrastructure. The company recently joined the Microsoft Intelligent Security Association.
Arista Networks continues to gain from solid momentum and diversification across its top verticals and product lines. It is well-poised for growth in the data-driven cloud networking business, with proactive platforms and predictive operations. ANET introduced an enterprise-grade Software-as-a-Service offering for its flagship CloudVision platform.
The stock price of Arista Networks has advanced 8.7% in the past four weeks. It has an expected earnings growth rate of 26.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 10.7% over the last 30 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.