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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.
Here are five of the 13 stocks that made it through the screen:
AppLovin Corp.: 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 Corp.: 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.: 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.: 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.: 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.
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/performance for information about the performance numbers displayed in this press release.
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Zacks.com featured highlights AppLovin, Kaiser Aluminum, Collegium Pharmaceutical, EMCOR Group and Textron
For Immediate Release
Chicago, IL – March 18, 2024 – Stocks in this week’s article are AppLovin Corp. (APP - Free Report) , Kaiser Aluminum Corp. (KALU - Free Report) , Collegium Pharmaceutical, Inc. (COLL - Free Report) , EMCOR Group, Inc. (EME - Free Report) and Textron Inc. (TXT - Free Report) .
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.
Here are five of the 13 stocks that made it through the screen:
AppLovin Corp.: 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 Corp.: 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.: 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.: 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.: 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
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2241188/time-to-get-these-5-top-relative-price-strength-stocks
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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/performance for information about the performance numbers displayed in this press release.