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Zacks.com featured highlights include American Eagle Outfitters, Central Garden & Pet, General Motors, Vertiv Holdings and Toll Brothers
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For Immediate Release
Chicago, IL – March 1, 2024 – Stocks in this week’s article are American Eagle Outfitters (AEO - Free Report) , Central Garden & Pet Co. (CENT - Free Report) , General Motors Co. (GM - Free Report) , Vertiv Holdings Co. (VRT - Free Report) and Toll Brothers, Inc. (TOL - Free Report) .
5 Solid Plays on the Relative Price Strength Trend
Wall Street continues its strong performance in 2024, building on its success from the previous year. So far this year, the benchmark S&P 500 index has risen more than 5%. The main reasons for this upward trend include expectations of interest rate cuts by the Fed, better-than-expected earnings in the fourth quarter of 2023 and significant growth in artificial intelligence (AI) technology globally.
Additionally, the U.S. economy remains robust, with the Department of Commerce reporting a growth rate of 3.3% in the fourth quarter of 2023, surpassing the expected 2%. Overall, the GDP for the United States grew 2.5% in 2023 compared with 1.9% in 2022, exceeding initial estimates.
Given this positive outlook, savvy investors are focusing on relative price performance, strategically identifying and seizing promising opportunities that offer the potential for high returns.
Relative Price Strength Strategy
Earnings growth and valuation multiples are indeed important for investors to determine a stock's ability to offer considerable returns. But these are also essential for determining whether a stock's price performance is better than its peers or the industry average.
If a stock's performance is lacking that of the broader groups, despite impressive earnings growth or valuation multiples, then something must be wrong.
It's always advisable to stay away from these stocks and bet on those that are outperforming their respective industry or benchmark. This is because betting on a winner always proves to be lucrative.
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.
Here are five of the 20 stocks that made it through the screen:
American Eagle Outfitters: Based in Pittsburgh, PA, the company is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15–25 years. AEO's expected EPS growth rate for three to five years is currently 21.5%, which compares favorably with the industry's growth rate of 12.7%. The company has a VGM Score of B.
Notably, the Zacks Consensus Estimate for American Eagle Outfitters' fiscal 2024 earnings per share indicates 45.4% year-over-year growth. The company has a market capitalization of $4.7 billion. AEO shares have gone up 66.5% in a year.
Central Garden & Pet Co.: It is one of the leading companies in the U.S. pet supplies and lawn and garden supplies space. The Zacks Consensus Estimate for this firm's fiscal 2024 earnings indicates 7.3% year-over-year growth. Headquartered in Walnut Creek, CA, CENT has a VGM Score of A.
Central Garden & Pet Company beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 37.8%, on average. CENT shares have risen 35.7% in a year.
General Motors Co.: Based in Detroit, MI, the company is one of the world's largest automakers. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved up 17%. GM has a VGM Score of B.
The Zacks Consensus Estimate for General Motors's 2024 earnings indicates 17.2% year-over-year growth. It has a trailing four-quarter earnings surprise of roughly 20% on average. GM shares have increased 4.9% in a year.
Vertiv Holdings Co.: The company is an electrical product manufacturer focused on data centers and telecom end markets. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings of this Westerville, OH-based firm has moved up 6.3%. VRT has a VGM Score of B.
Vertiv Holdings' expected EPS growth rate for three to five years is currently 25.6%, which compares favorably with the industry's growth rate of 17.8%. It has a trailing four-quarter earnings surprise of roughly 30.4%, on average. VRT shares have surged 309.8% in a year.
Toll Brothers, Inc.: The company is a well-known home builder focused on the luxury end of the market. The Zacks Consensus Estimate for fiscal 2024 earnings of this firm indicates 7.8% growth. Headquartered in Horsham, PA, TOL has a VGM Score of A.
Over the past 60 days, the Zacks Consensus Estimate for fiscal 2024 has moved up 8.9%. The company has a trailing four-quarter earnings surprise of roughly 30.2%, on average. TOL shares have gained 90.2% 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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
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. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks.com featured highlights include American Eagle Outfitters, Central Garden & Pet, General Motors, Vertiv Holdings and Toll Brothers
For Immediate Release
Chicago, IL – March 1, 2024 – Stocks in this week’s article are American Eagle Outfitters (AEO - Free Report) , Central Garden & Pet Co. (CENT - Free Report) , General Motors Co. (GM - Free Report) , Vertiv Holdings Co. (VRT - Free Report) and Toll Brothers, Inc. (TOL - Free Report) .
5 Solid Plays on the Relative Price Strength Trend
Wall Street continues its strong performance in 2024, building on its success from the previous year. So far this year, the benchmark S&P 500 index has risen more than 5%. The main reasons for this upward trend include expectations of interest rate cuts by the Fed, better-than-expected earnings in the fourth quarter of 2023 and significant growth in artificial intelligence (AI) technology globally.
Additionally, the U.S. economy remains robust, with the Department of Commerce reporting a growth rate of 3.3% in the fourth quarter of 2023, surpassing the expected 2%. Overall, the GDP for the United States grew 2.5% in 2023 compared with 1.9% in 2022, exceeding initial estimates.
Given this positive outlook, savvy investors are focusing on relative price performance, strategically identifying and seizing promising opportunities that offer the potential for high returns.
Relative Price Strength Strategy
Earnings growth and valuation multiples are indeed important for investors to determine a stock's ability to offer considerable returns. But these are also essential for determining whether a stock's price performance is better than its peers or the industry average.
If a stock's performance is lacking that of the broader groups, despite impressive earnings growth or valuation multiples, then something must be wrong.
It's always advisable to stay away from these stocks and bet on those that are outperforming their respective industry or benchmark. This is because betting on a winner always proves to be lucrative.
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.
Here are five of the 20 stocks that made it through the screen:
American Eagle Outfitters: Based in Pittsburgh, PA, the company is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15–25 years. AEO's expected EPS growth rate for three to five years is currently 21.5%, which compares favorably with the industry's growth rate of 12.7%. The company has a VGM Score of B.
Notably, the Zacks Consensus Estimate for American Eagle Outfitters' fiscal 2024 earnings per share indicates 45.4% year-over-year growth. The company has a market capitalization of $4.7 billion. AEO shares have gone up 66.5% in a year.
Central Garden & Pet Co.: It is one of the leading companies in the U.S. pet supplies and lawn and garden supplies space. The Zacks Consensus Estimate for this firm's fiscal 2024 earnings indicates 7.3% year-over-year growth. Headquartered in Walnut Creek, CA, CENT has a VGM Score of A.
Central Garden & Pet Company beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 37.8%, on average. CENT shares have risen 35.7% in a year.
General Motors Co.: Based in Detroit, MI, the company is one of the world's largest automakers. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved up 17%. GM has a VGM Score of B.
The Zacks Consensus Estimate for General Motors's 2024 earnings indicates 17.2% year-over-year growth. It has a trailing four-quarter earnings surprise of roughly 20% on average. GM shares have increased 4.9% in a year.
Vertiv Holdings Co.: The company is an electrical product manufacturer focused on data centers and telecom end markets. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings of this Westerville, OH-based firm has moved up 6.3%. VRT has a VGM Score of B.
Vertiv Holdings' expected EPS growth rate for three to five years is currently 25.6%, which compares favorably with the industry's growth rate of 17.8%. It has a trailing four-quarter earnings surprise of roughly 30.4%, on average. VRT shares have surged 309.8% in a year.
Toll Brothers, Inc.: The company is a well-known home builder focused on the luxury end of the market. The Zacks Consensus Estimate for fiscal 2024 earnings of this firm indicates 7.8% growth. Headquartered in Horsham, PA, TOL has a VGM Score of A.
Over the past 60 days, the Zacks Consensus Estimate for fiscal 2024 has moved up 8.9%. The company has a trailing four-quarter earnings surprise of roughly 30.2%, on average. TOL shares have gained 90.2% 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
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2233726/5-solid-plays-on-the-relative-price-strength-trend
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
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
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. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.