We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here Are 4 Top-Ranked Plays With Relative Price Strength
Read MoreHide Full Article
The first quarter of 2024 proved to be impressive for U.S. stock markets, following a remarkable 2023. The S&P 500 surged by 10.2%, marking its strongest first-quarter showing since 2019. We anticipate that the bullish momentum will persist, bolstered by a robust U.S. economy.
In 2023, U.S. GDP expanded by 2.5%, surpassing the 1.9% growth recorded in 2022. The Federal Reserve raised its GDP forecast for this year to 2.1% during the March FOMC meeting, up from 1.4% in December 2023, signaling no immediate threat of a recession. Core PCE inflation, the Fed's preferred inflation measure, increased by 0.3% month over month in February compared to 0.5% in the prior month. Year over year, core PCE inflation came in at 2.8% in February, slightly lower than January's 2.9%. Fed Chair Jerome Powell noted that these figures aligned with the central bank's projections.
With peak inflation now in the rearview mirror, the labor market demonstrates resilience. Furthermore, personal consumption expenditure, a significant driver of GDP, rose by 0.8% month over month in February, surpassing the consensus estimate of 0.5% and the 0.2% uptick seen in January.
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
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 four of the seven stocks that made it through the screen:
Carlisle Companies Incorporated (CSL - Free Report) : Based in Scottsdale, CA, AZ, the company engages in the design, manufacture and sale of a wide range of roofing and waterproofing products, engineered products and finishing equipment. CSL’s expected EPS growth rate for three to five years is currently 15%, which compares favorably with the industry's growth rate of 11.7%. The company has a VGM Score of B.
Notably, the Zacks Consensus Estimate for Carlisle Companies’ 2024 earnings per share indicates 20.5% year-over-year growth. The company has a market capitalization of $18.8 billion. CSL shares have gone up 84.3% in a year.
Murphy USA Inc. (MUSA - Free Report) : The company is a leading independent retailer of motor fuel and convenience merchandise in the United States. The Zacks Consensus Estimate for 2024 earnings of this firm indicates 3.3% growth. Headquartered in El Dorado, AR, MUSA has a VGM Score of A.
Over the past 60 days, the Zacks Consensus Estimate for 2024 has moved up 6.6%. Murphy USA has a trailing four-quarter earnings surprise of roughly 13.6%, on average. MUSA shares have gained 66.3% in a year.
Mr. Cooper Group (COOP - Free Report) : The company operates in the mortgage refinancing market. Over the past 60 days, this Dallas, TX-based firm saw the Zacks Consensus Estimate for 2024 move up 5.8%. COOP has a VGM Score of B.
The Zacks Consensus Estimate for 2024 earnings of Mr. Cooper Group indicates 22.6% growth. The 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 31.9%, on average. COOP shares have gained 83.3% in a year.
Distribution Solutions Group, Inc. (DSGR - Free Report) : Based in Fort Worth, TX, the company specializes in distribution solutions for the maintenance, repair, and operations market worldwide. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved up 16.5%. DSGR has a VGM Score of B.
Distribution Solutions Group beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. It has a trailing four-quarter earnings surprise of roughly 13.3%, on average. DSGR shares have surged 62.7% 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: Bigstock
Here Are 4 Top-Ranked Plays With Relative Price Strength
The first quarter of 2024 proved to be impressive for U.S. stock markets, following a remarkable 2023. The S&P 500 surged by 10.2%, marking its strongest first-quarter showing since 2019. We anticipate that the bullish momentum will persist, bolstered by a robust U.S. economy.
In 2023, U.S. GDP expanded by 2.5%, surpassing the 1.9% growth recorded in 2022. The Federal Reserve raised its GDP forecast for this year to 2.1% during the March FOMC meeting, up from 1.4% in December 2023, signaling no immediate threat of a recession. Core PCE inflation, the Fed's preferred inflation measure, increased by 0.3% month over month in February compared to 0.5% in the prior month. Year over year, core PCE inflation came in at 2.8% in February, slightly lower than January's 2.9%. Fed Chair Jerome Powell noted that these figures aligned with the central bank's projections.
With peak inflation now in the rearview mirror, the labor market demonstrates resilience. Furthermore, personal consumption expenditure, a significant driver of GDP, rose by 0.8% month over month in February, surpassing the consensus estimate of 0.5% and the 0.2% uptick seen in January.
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
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 four of the seven stocks that made it through the screen:
Carlisle Companies Incorporated (CSL - Free Report) : Based in Scottsdale, CA, AZ, the company engages in the design, manufacture and sale of a wide range of roofing and waterproofing products, engineered products and finishing equipment. CSL’s expected EPS growth rate for three to five years is currently 15%, which compares favorably with the industry's growth rate of 11.7%. The company has a VGM Score of B.
Notably, the Zacks Consensus Estimate for Carlisle Companies’ 2024 earnings per share indicates 20.5% year-over-year growth. The company has a market capitalization of $18.8 billion. CSL shares have gone up 84.3% in a year.
Murphy USA Inc. (MUSA - Free Report) : The company is a leading independent retailer of motor fuel and convenience merchandise in the United States. The Zacks Consensus Estimate for 2024 earnings of this firm indicates 3.3% growth. Headquartered in El Dorado, AR, MUSA has a VGM Score of A.
Over the past 60 days, the Zacks Consensus Estimate for 2024 has moved up 6.6%. Murphy USA has a trailing four-quarter earnings surprise of roughly 13.6%, on average. MUSA shares have gained 66.3% in a year.
Mr. Cooper Group (COOP - Free Report) : The company operates in the mortgage refinancing market. Over the past 60 days, this Dallas, TX-based firm saw the Zacks Consensus Estimate for 2024 move up 5.8%. COOP has a VGM Score of B.
The Zacks Consensus Estimate for 2024 earnings of Mr. Cooper Group indicates 22.6% growth. The 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 31.9%, on average. COOP shares have gained 83.3% in a year.
Distribution Solutions Group, Inc. (DSGR - Free Report) : Based in Fort Worth, TX, the company specializes in distribution solutions for the maintenance, repair, and operations market worldwide. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved up 16.5%. DSGR has a VGM Score of B.
Distribution Solutions Group beat the Zacks Consensus Estimate for earnings in two of the last four quarters and missed in the other two. It has a trailing four-quarter earnings surprise of roughly 13.3%, on average. DSGR shares have surged 62.7% 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.