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Here Are 5 Top-Ranked Plays With Relative Price Strength
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After a challenging three-month period, following a strong seven-month bull run, Wall Street gave a remarkable performance last week. The S&P 500, tracking major U.S.-listed companies, surged by 5.9%. Despite the recent setbacks, the U.S. economy remains robust. In the third quarter of 2023, GDP grew impressively at 4.9%, consumer spending stayed strong, and inflation gradually decreased since June 2022. The Fed also gave an improved assessment of the overall economy.
During the November FOMC meeting, the Fed maintained the benchmark interest rate in the 5.25-5.5% range, the highest since 2001. Despite not raising rates in the September and November meetings, Fed Chair Jerome Powell emphasized that the central bank is still working toward the 2% target inflation rate. While a higher interest rate regime is showing results, another 25-basis-point rate hike in December remains a possibility, contributing to market uncertainty.
With the potential for ongoing market volatility, wise investors are turning their attention to stocks with a strong relative price performance. In this unpredictable environment, the strategy of identifying and investing in promising opportunities is prudent, allowing investors to navigate the choppy waters of financial markets.
Relative Price Strength Strategy
Investors generally gauge a stock’s potential returns by examining earnings growth and valuation multiples. At the same time, it’s essential to measure the performance of such a stock relative to its industry or peers, or an appropriate benchmark.
If you see that a stock is underperforming on fundamental factors, it would be prudent to move on and find a better alternative. However, those outperforming their respective sectors in terms of price should be selected because they stand a better chance of providing considerable returns.
Then again, it is imperative that you determine whether or not an investment has relevant upside potential when considering stocks with significant relative price strength. Stocks delivering better than the S&P 500 for 1 to 3 months at least and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.
Finally, it is crucial to find out whether analysts are optimistic about the upcoming earnings of these companies. In order to do this, we have added positive estimate revisions for the current quarter’s (Q1) earnings to our screen. When a stock undergoes an upward revision, it leads to additional price gains.
Screening Parameters
Relative % Price change – 12 weeks greater than 0
Relative % Price change – 4 weeks greater than 0
Relative % Price change – 1 week greater than 0
(We have considered those stocks that have been outperforming the S&P 500 over the last 12 weeks, four weeks and one week.)
% Change (Q1) Est. over 4 Weeks greater than 0: Positive current-quarter estimate revisions over the last four weeks.
Zacks Rank equal to 1: Only Zacks Rank #1 (Strong Buy) stocks — that have returned more than 26% annually over the last 26 years and surpassed the S&P 500 in 23 of the last 26 years — can get through. You can see the complete list of today’s Zacks #1 Rank stocks here.
Current Price greater than or equal to $5 and Average 20-day Volume greater than or equal to 50,000: A minimum price of $5 is a good standard to screen low-priced stocks, while a high trading volume would imply adequate liquidity.
VGM Score less than or equal to B: Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Here are five of the 11 stocks that made it through the screen:
Commvault Systems, Inc. (CVLT - Free Report) : It provides an array of data backup and recovery software and services. The fiscal 2024 Zacks Consensus Estimate for this Tinton Falls, NJ-based firm indicates 12.9% year-over-year earnings per share growth. CVLT has a VGM Score of B.
Commvault Systems beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of roughly 6.4%, on average. CVLT shares have gained 10.7% in a year.
Manitex International, Inc. (MNTX - Free Report) : Based in Bridgeview, IL, Manitex is a leading provider of engineered lifting solutions. Over the past 60 days, this firm saw the Zacks Consensus Estimate for 2023 move up 63.6%. MNTX has a VGM Score of A.
The 2023 Zacks Consensus Estimate for Manitex International indicates 44% year-over-year earnings per share growth. It has a trailing four-quarter earnings surprise of roughly 261.9%, on average. MNTX shares have gone up 6.6% in a year.
Amalgamated Financial Corp. (AMAL - Free Report) : The company offers a broad spectrum of services ranging from commercial and retail banking to investment management, and trust and custody services. Over the past 60 days, this New York-based firm saw the Zacks Consensus Estimate for 2023 move up 3.5%. AMAL has a VGM Score of B.
The 2023 Zacks Consensus Estimate for Amalgamated Financial indicates 8.9% year-over-year earnings per share growth. It has a trailing four-quarter earnings surprise of roughly 5.9%, on average. AMAL shares have decreased 19.1% in a year.
Global Industrial Company (GIC - Free Report) : The firm provides industrial, operational and repair items, which are distributed through its robust e-commerce operation and sales personnel. Over the past 60 days, this Port Washington, NY-based firm has seen the Zacks Consensus Estimate for 2023 move up 2.8%. GIC has a VGM Score of A.
Global Industrial Company beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of roughly 8.6%, on average. GIC shares have gained 46.4% in a year.
Civeo Corporation (CVEO - Free Report) : Civeo Corporation is a provider of hospitality services to the natural resource industry in Canada, Australia and the United States. The 2023 Zacks Consensus Estimate for this Houston, TX-based firm indicates 354.6% year-over-year earnings per share growth. CVEO has a VGM Score of A.
Over the past 60 days, Civeo has seen the Zacks Consensus Estimate for 2023 surge 204.2%. CVEO, which has an average trailing four-quarter earnings surprise of roughly 16.9%, has seen its shares lose 24.4% in a year.
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: Shutterstock
Here Are 5 Top-Ranked Plays With Relative Price Strength
After a challenging three-month period, following a strong seven-month bull run, Wall Street gave a remarkable performance last week. The S&P 500, tracking major U.S.-listed companies, surged by 5.9%. Despite the recent setbacks, the U.S. economy remains robust. In the third quarter of 2023, GDP grew impressively at 4.9%, consumer spending stayed strong, and inflation gradually decreased since June 2022. The Fed also gave an improved assessment of the overall economy.
During the November FOMC meeting, the Fed maintained the benchmark interest rate in the 5.25-5.5% range, the highest since 2001. Despite not raising rates in the September and November meetings, Fed Chair Jerome Powell emphasized that the central bank is still working toward the 2% target inflation rate. While a higher interest rate regime is showing results, another 25-basis-point rate hike in December remains a possibility, contributing to market uncertainty.
With the potential for ongoing market volatility, wise investors are turning their attention to stocks with a strong relative price performance. In this unpredictable environment, the strategy of identifying and investing in promising opportunities is prudent, allowing investors to navigate the choppy waters of financial markets.
Relative Price Strength Strategy
Investors generally gauge a stock’s potential returns by examining earnings growth and valuation multiples. At the same time, it’s essential to measure the performance of such a stock relative to its industry or peers, or an appropriate benchmark.
If you see that a stock is underperforming on fundamental factors, it would be prudent to move on and find a better alternative. However, those outperforming their respective sectors in terms of price should be selected because they stand a better chance of providing considerable returns.
Then again, it is imperative that you determine whether or not an investment has relevant upside potential when considering stocks with significant relative price strength. Stocks delivering better than the S&P 500 for 1 to 3 months at least and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.
Finally, it is crucial to find out whether analysts are optimistic about the upcoming earnings of these companies. In order to do this, we have added positive estimate revisions for the current quarter’s (Q1) earnings to our screen. When a stock undergoes an upward revision, it leads to additional price gains.
Screening Parameters
Relative % Price change – 12 weeks greater than 0
Relative % Price change – 4 weeks greater than 0
Relative % Price change – 1 week greater than 0
(We have considered those stocks that have been outperforming the S&P 500 over the last 12 weeks, four weeks and one week.)
% Change (Q1) Est. over 4 Weeks greater than 0: Positive current-quarter estimate revisions over the last four weeks.
Zacks Rank equal to 1: Only Zacks Rank #1 (Strong Buy) stocks — that have returned more than 26% annually over the last 26 years and surpassed the S&P 500 in 23 of the last 26 years — can get through. You can see the complete list of today’s Zacks #1 Rank stocks here.
Current Price greater than or equal to $5 and Average 20-day Volume greater than or equal to 50,000: A minimum price of $5 is a good standard to screen low-priced stocks, while a high trading volume would imply adequate liquidity.
VGM Score less than or equal to B: Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Here are five of the 11 stocks that made it through the screen:
Commvault Systems, Inc. (CVLT - Free Report) : It provides an array of data backup and recovery software and services. The fiscal 2024 Zacks Consensus Estimate for this Tinton Falls, NJ-based firm indicates 12.9% year-over-year earnings per share growth. CVLT has a VGM Score of B.
Commvault Systems beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of roughly 6.4%, on average. CVLT shares have gained 10.7% in a year.
Manitex International, Inc. (MNTX - Free Report) : Based in Bridgeview, IL, Manitex is a leading provider of engineered lifting solutions. Over the past 60 days, this firm saw the Zacks Consensus Estimate for 2023 move up 63.6%. MNTX has a VGM Score of A.
The 2023 Zacks Consensus Estimate for Manitex International indicates 44% year-over-year earnings per share growth. It has a trailing four-quarter earnings surprise of roughly 261.9%, on average. MNTX shares have gone up 6.6% in a year.
Amalgamated Financial Corp. (AMAL - Free Report) : The company offers a broad spectrum of services ranging from commercial and retail banking to investment management, and trust and custody services. Over the past 60 days, this New York-based firm saw the Zacks Consensus Estimate for 2023 move up 3.5%. AMAL has a VGM Score of B.
The 2023 Zacks Consensus Estimate for Amalgamated Financial indicates 8.9% year-over-year earnings per share growth. It has a trailing four-quarter earnings surprise of roughly 5.9%, on average. AMAL shares have decreased 19.1% in a year.
Global Industrial Company (GIC - Free Report) : The firm provides industrial, operational and repair items, which are distributed through its robust e-commerce operation and sales personnel. Over the past 60 days, this Port Washington, NY-based firm has seen the Zacks Consensus Estimate for 2023 move up 2.8%. GIC has a VGM Score of A.
Global Industrial Company beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of roughly 8.6%, on average. GIC shares have gained 46.4% in a year.
Civeo Corporation (CVEO - Free Report) : Civeo Corporation is a provider of hospitality services to the natural resource industry in Canada, Australia and the United States. The 2023 Zacks Consensus Estimate for this Houston, TX-based firm indicates 354.6% year-over-year earnings per share growth. CVEO has a VGM Score of A.
Over the past 60 days, Civeo has seen the Zacks Consensus Estimate for 2023 surge 204.2%. CVEO, which has an average trailing four-quarter earnings surprise of roughly 16.9%, has seen its shares lose 24.4% in a year.
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.