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Time to Get These 5 Top Relative Price Strength Stocks
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U.S. markets have exhibited sideways movement through March owing to a robust rally in the initial months of 2024. Now, investors’ eyes are on the upcoming Fed FOMC meeting scheduled for Mar 19-20. While no rate cut is anticipated, market participants are eagerly awaiting the post-FOMC statements from the Fed Chairman to decide their next moves.
Regarding indicators of economic growth, there are conflicting signals. Even after a significant decrease from its peak of 9% in June 2022, inflation remains elevated compared to the Fed’s target of 2%. Personal spending continues to demonstrate resilience, despite the Fed's adherence to a restrictive monetary policy, which includes higher interest rates. Nonetheless, the U.S. economy exhibited healthy growth of 2.5% in 2023.
In navigating the current market environment, a prudent approach would involve focusing on relative price performance and strategically identifying promising opportunities with the potential for attractive returns.
Relative Price Strength Strategy
Whether a stock has the potential to offer considerable returns is determined primarily by its earnings and valuation ratios. Simultaneously, it is essential to check whether its price performance exceeds its peers or the industry average.
Upon such comparison, if we find that a stock is unable to match up to wider sectoral growth despite having impressive earnings momentum or valuation multiples, it may be better to avoid it.
However, those outperforming their respective industries or benchmarks should be included in your portfolio since they have a higher chance of securing significant returns. Picking a stock that outperforms its peers ensures a winning option on your hands.
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 13 stocks that made it through the screen:
AppLovin Corporation (APP - Free Report) : Based in Palo Alto, CA, the company builds software-oriented platforms tailored for mobile app developers. APP’s expected EPS growth rate for three to five years is currently 20%, which compares favorably with the industry's growth rate of 16.8%. The company has a VGM Score of B.
Notably, the Zacks Consensus Estimate for AppLovin’s 2024 earnings per share indicates 153.1% year-over-year growth. The company has a market capitalization of $21.6 billion. APP shares have gone up 365% in a year.
Kaiser Aluminum Corporation (KALU - Free Report) : The company produces semi-fabricated specialty aluminum products used in a wide range of industries. The Zacks Consensus Estimate for 2024 earnings of this firm indicates 31% growth. Headquartered in Franklin, TN, KALU has a VGM Score of A.
Over the past 60 days, the Zacks Consensus Estimate for 2024 has moved up 20.9%. Kaiser Aluminum has a trailing four-quarter earnings surprise of roughly 157.2%, on average. KALU shares have gained 17.7% in a year.
Collegium Pharmaceutical, Inc. (COLL - Free Report) : It is a biopharma company focused on the development of pain medications. The Zacks Consensus Estimate for this firm’s 2024 earnings indicates 15% year-over-year growth. Headquartered in Stoughton, MA, COLL has a VGM Score of A.
Collegium Pharmaceutical beat the Zacks Consensus Estimate for earnings in three of the last four quarters and met in the other. It has a trailing four-quarter earnings surprise of roughly 7.5%, on average. COLL shares have risen 60.8% in a year.
EMCOR Group, Inc. (EME - Free Report) : Based in Norwalk, CT, the company operates in the mechanical and electrical construction industry. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved up 15.4%. EME has a VGM Score of A.
The Zacks Consensus Estimate for EMCOR Group’s 2024 earnings indicates 8.7% year-over-year growth. It has a trailing four-quarter earnings surprise of roughly 28% on average. EME shares have surged 109.6% in a year.
Textron Inc. (TXT - Free Report) : The company is a well-known diversified operator that manufactures aircraft, automotive engine components and industrial tools. The Zacks Consensus Estimate for 2024 earnings of this firm indicates 12.2% growth. Headquartered in Providence, RI, TXT has a VGM Score of B.
Over the past 60 days, the Zacks Consensus Estimate for 2024 has moved up 8.7%. Textron has a trailing four-quarter earnings surprise of roughly 13.5%, on average. TXT shares have increased 39.4% 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.
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Time to Get These 5 Top Relative Price Strength Stocks
U.S. markets have exhibited sideways movement through March owing to a robust rally in the initial months of 2024. Now, investors’ eyes are on the upcoming Fed FOMC meeting scheduled for Mar 19-20. While no rate cut is anticipated, market participants are eagerly awaiting the post-FOMC statements from the Fed Chairman to decide their next moves.
Regarding indicators of economic growth, there are conflicting signals. Even after a significant decrease from its peak of 9% in June 2022, inflation remains elevated compared to the Fed’s target of 2%. Personal spending continues to demonstrate resilience, despite the Fed's adherence to a restrictive monetary policy, which includes higher interest rates. Nonetheless, the U.S. economy exhibited healthy growth of 2.5% in 2023.
In navigating the current market environment, a prudent approach would involve focusing on relative price performance and strategically identifying promising opportunities with the potential for attractive returns.
Relative Price Strength Strategy
Whether a stock has the potential to offer considerable returns is determined primarily by its earnings and valuation ratios. Simultaneously, it is essential to check whether its price performance exceeds its peers or the industry average.
Upon such comparison, if we find that a stock is unable to match up to wider sectoral growth despite having impressive earnings momentum or valuation multiples, it may be better to avoid it.
However, those outperforming their respective industries or benchmarks should be included in your portfolio since they have a higher chance of securing significant returns. Picking a stock that outperforms its peers ensures a winning option on your hands.
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 13 stocks that made it through the screen:
AppLovin Corporation (APP - Free Report) : Based in Palo Alto, CA, the company builds software-oriented platforms tailored for mobile app developers. APP’s expected EPS growth rate for three to five years is currently 20%, which compares favorably with the industry's growth rate of 16.8%. The company has a VGM Score of B.
Notably, the Zacks Consensus Estimate for AppLovin’s 2024 earnings per share indicates 153.1% year-over-year growth. The company has a market capitalization of $21.6 billion. APP shares have gone up 365% in a year.
Kaiser Aluminum Corporation (KALU - Free Report) : The company produces semi-fabricated specialty aluminum products used in a wide range of industries. The Zacks Consensus Estimate for 2024 earnings of this firm indicates 31% growth. Headquartered in Franklin, TN, KALU has a VGM Score of A.
Over the past 60 days, the Zacks Consensus Estimate for 2024 has moved up 20.9%. Kaiser Aluminum has a trailing four-quarter earnings surprise of roughly 157.2%, on average. KALU shares have gained 17.7% in a year.
Collegium Pharmaceutical, Inc. (COLL - Free Report) : It is a biopharma company focused on the development of pain medications. The Zacks Consensus Estimate for this firm’s 2024 earnings indicates 15% year-over-year growth. Headquartered in Stoughton, MA, COLL has a VGM Score of A.
Collegium Pharmaceutical beat the Zacks Consensus Estimate for earnings in three of the last four quarters and met in the other. It has a trailing four-quarter earnings surprise of roughly 7.5%, on average. COLL shares have risen 60.8% in a year.
EMCOR Group, Inc. (EME - Free Report) : Based in Norwalk, CT, the company operates in the mechanical and electrical construction industry. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved up 15.4%. EME has a VGM Score of A.
The Zacks Consensus Estimate for EMCOR Group’s 2024 earnings indicates 8.7% year-over-year growth. It has a trailing four-quarter earnings surprise of roughly 28% on average. EME shares have surged 109.6% in a year.
Textron Inc. (TXT - Free Report) : The company is a well-known diversified operator that manufactures aircraft, automotive engine components and industrial tools. The Zacks Consensus Estimate for 2024 earnings of this firm indicates 12.2% growth. Headquartered in Providence, RI, TXT has a VGM Score of B.
Over the past 60 days, the Zacks Consensus Estimate for 2024 has moved up 8.7%. Textron has a trailing four-quarter earnings surprise of roughly 13.5%, on average. TXT shares have increased 39.4% 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.