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April is usually considered favorable for equity investments. However, this year it is turning out to be different. Month to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have tumbled 3.4%, 3.5% and 4.1%, respectively.
On Apr 10, the Department of Labor reported that the consumer price index (CPI) for March rose 0.4% sequentially and 3.5% year over year. Core CPI (excluding volatile food and energy items) for March rose 0.4% sequentially and 3.8% year over year.
The U.S. inflation rate remains stubborn despite a restrictive monetary policy and an extremely high interest rate regime in the last 24 months. Fed officials are concerned that even after declining to a great extent from its peak in June 2022, the inflation rate is yet to show any convincing evidence that it is moving gradually to the targeted level of 2%.
The sticky inflation rate pushed investors’ expectations to June. Following the release of the March CPI data, the majority of the respondents are now expecting the first reduction of the benchmark lending rate to happen in September.
On Apr 12, JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and Citigroup Inc. (C) reported that their net interest income declined 4%, 4% and 2%, respectively, quarter over quarter in first-quarter 2024. Net interest income is a critical metric for most banks, since it measures the difference between what banks earn on their assets and pay out on their deposits.
Moreover, these banking behemoths have warned that this trend is likely to continue in the near term as persistent inflationary pressures and escalation of geopolitical conflicts in the Middle-East are likely to take a toll on their global businesses.
As a result, a few stocks have shown price strength. We have selected five stocks likely to gain in the near term on the back of a favorable Zacks Rank. These companies are — AudioEye Inc. (AEYE - Free Report) , Northern Technologies International Corp. (NTIC - Free Report) , Arq Inc. (ARQ - Free Report) , Seanergy Maritime Holdings Corp. (SHIP - Free Report) and The GEO Group Inc. (GEO - Free Report) .
Here’s How We Arrived at the Picks
We have primarily targeted stocks that have freshly been on a bull run. Stocks seeing price strength recently have a high chance of carrying the momentum forward.
If a stock is continuously witnessing an uptrend, there must be a solid reason or it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.
However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed to create a successful investment strategy.
Here’s how you should create the screen to shortlist the current as well as the potential winners.
Screening Parameters:
Percentage Change in Price (4 Weeks) greater than zero: This criterion shows that the stock has moved higher in the last four weeks.
Percentage Change Price (12 Weeks) greater than 10: This indicates that the stock has seen momentum over the last three months. This lowers the risk of choosing stocks that may have drawn attention due to the overwhelming performance of the overall market in a very short period.
Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Average Broker Rating 1: This indicates that brokers are also highly hopeful about the stock’s future performance.
Current Price greater than 5: The stocks must all be trading at a minimum of $5.
Current Price/ 52-Week High-Low Range more than 85%: This criterion filters stocks that are trading near their respective 52-week highs. It indicates that these are strong enough in terms of price.
Just these few criteria narrowed down the search from over 7,700 stocks to six.
Let’s discuss five out of these six stocks:
AudioEye is engaged in creating a cloud-based cross-platform/cross-browser screen reader solution for web browsing. AEYE focuses on creating voice-driven technologies to enhance the mobility, usability, and accessibility of Internet-based content in the United States.
AEYE develops patented, Internet content, and publication, and distribution software that enables conversion of any media into accessible formats, as well as allows for real-time distribution on any Internet connected device. AEYE offers Audio Internet, a software-as-a-service technology platform to Internet and mobile publishers, developers, owners, and operators.
The stock price of AudioEye has soared 40.8% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 60 days.
Northern Technologies develops and markets rust and corrosion inhibiting solutions in North America, South America, Europe, Asia, the Middle East and internationally. NTIC provides a portfolio of bio-based and certified compostable polymer resin compounds and finished products under the Natur-Tec brand.
NTIC offers rust and corrosion inhibiting products, such as plastic and paper packaging, liquids, coatings, rust removers, cleaners, diffusers, and engineered solutions designed for the oil and gas industry under the ZERUST brand.
The stock price of Northern Technologies has jumped 29.5% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year (ending July 2024). The Zacks Consensus Estimate for current-year earnings has improved 4% over the last 30 days.
Arq is a producer of activated carbon and other environmentally efficient carbon products for use in purification and sustainable materials. ARQ’s products include granular activated carbon, powdered and granular activated carbon, and colloidal carbon products, Arq Powder Wetcake, a fine and low-ash coal waste-derived particle, and additives for air emissions control. ARQ’s products are used in various applications, including water treatment, ground water remediation, soil sediments, air emissions, and asphalt additives.
The stock price of Arq has climbed 11.9% in the past four weeks. It has an expected earnings growth rate of 64.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.8% over the last 60 days.
Seanergy Maritime is the only pure-play Capesize ship-owner publicly listed in the United States. SHIP provides marine dry bulk transportation services through a modern fleet of 10 Capesize vessels.
The stock price of Seanergy Maritime has advanced 11.8% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 83% over the last 60 days.
The GEO Group is engaged in ownership, leasing, and management of secure facilities, processing centers, and community-based re-entry facilities in the United States, Australia, the United Kingdom, and South Africa.
GEO also provides secure facility management services, including the provision of security, administrative, rehabilitation, education, and food services; re-entry services, such as temporary housing, programming, employment assistance, and other services; electronic monitoring and supervision services.
The stock price of The GEO Group has gained 6.1% in the past four weeks. GEO has an expected earnings growth rate of 6.3% for the current year. The Zacks Consensus Estimate for current-year earnings improved 7.4% over the last 30 days.
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
5 Stocks With Recent Price Strength to Buy Now
April is usually considered favorable for equity investments. However, this year it is turning out to be different. Month to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have tumbled 3.4%, 3.5% and 4.1%, respectively.
On Apr 10, the Department of Labor reported that the consumer price index (CPI) for March rose 0.4% sequentially and 3.5% year over year. Core CPI (excluding volatile food and energy items) for March rose 0.4% sequentially and 3.8% year over year.
The U.S. inflation rate remains stubborn despite a restrictive monetary policy and an extremely high interest rate regime in the last 24 months. Fed officials are concerned that even after declining to a great extent from its peak in June 2022, the inflation rate is yet to show any convincing evidence that it is moving gradually to the targeted level of 2%.
The sticky inflation rate pushed investors’ expectations to June. Following the release of the March CPI data, the majority of the respondents are now expecting the first reduction of the benchmark lending rate to happen in September.
On Apr 12, JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and Citigroup Inc. (C) reported that their net interest income declined 4%, 4% and 2%, respectively, quarter over quarter in first-quarter 2024. Net interest income is a critical metric for most banks, since it measures the difference between what banks earn on their assets and pay out on their deposits.
Moreover, these banking behemoths have warned that this trend is likely to continue in the near term as persistent inflationary pressures and escalation of geopolitical conflicts in the Middle-East are likely to take a toll on their global businesses.
As a result, a few stocks have shown price strength. We have selected five stocks likely to gain in the near term on the back of a favorable Zacks Rank. These companies are — AudioEye Inc. (AEYE - Free Report) , Northern Technologies International Corp. (NTIC - Free Report) , Arq Inc. (ARQ - Free Report) , Seanergy Maritime Holdings Corp. (SHIP - Free Report) and The GEO Group Inc. (GEO - Free Report) .
Here’s How We Arrived at the Picks
We have primarily targeted stocks that have freshly been on a bull run. Stocks seeing price strength recently have a high chance of carrying the momentum forward.
If a stock is continuously witnessing an uptrend, there must be a solid reason or it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.
However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed to create a successful investment strategy.
Here’s how you should create the screen to shortlist the current as well as the potential winners.
Screening Parameters:
Percentage Change in Price (4 Weeks) greater than zero: This criterion shows that the stock has moved higher in the last four weeks.
Percentage Change Price (12 Weeks) greater than 10: This indicates that the stock has seen momentum over the last three months. This lowers the risk of choosing stocks that may have drawn attention due to the overwhelming performance of the overall market in a very short period.
Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Average Broker Rating 1: This indicates that brokers are also highly hopeful about the stock’s future performance.
Current Price greater than 5: The stocks must all be trading at a minimum of $5.
Current Price/ 52-Week High-Low Range more than 85%: This criterion filters stocks that are trading near their respective 52-week highs. It indicates that these are strong enough in terms of price.
Just these few criteria narrowed down the search from over 7,700 stocks to six.
Let’s discuss five out of these six stocks:
AudioEye is engaged in creating a cloud-based cross-platform/cross-browser screen reader solution for web browsing. AEYE focuses on creating voice-driven technologies to enhance the mobility, usability, and accessibility of Internet-based content in the United States.
AEYE develops patented, Internet content, and publication, and distribution software that enables conversion of any media into accessible formats, as well as allows for real-time distribution on any Internet connected device. AEYE offers Audio Internet, a software-as-a-service technology platform to Internet and mobile publishers, developers, owners, and operators.
The stock price of AudioEye has soared 40.8% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 60 days.
Northern Technologies develops and markets rust and corrosion inhibiting solutions in North America, South America, Europe, Asia, the Middle East and internationally. NTIC provides a portfolio of bio-based and certified compostable polymer resin compounds and finished products under the Natur-Tec brand.
NTIC offers rust and corrosion inhibiting products, such as plastic and paper packaging, liquids, coatings, rust removers, cleaners, diffusers, and engineered solutions designed for the oil and gas industry under the ZERUST brand.
The stock price of Northern Technologies has jumped 29.5% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year (ending July 2024). The Zacks Consensus Estimate for current-year earnings has improved 4% over the last 30 days.
Arq is a producer of activated carbon and other environmentally efficient carbon products for use in purification and sustainable materials. ARQ’s products include granular activated carbon, powdered and granular activated carbon, and colloidal carbon products, Arq Powder Wetcake, a fine and low-ash coal waste-derived particle, and additives for air emissions control. ARQ’s products are used in various applications, including water treatment, ground water remediation, soil sediments, air emissions, and asphalt additives.
The stock price of Arq has climbed 11.9% in the past four weeks. It has an expected earnings growth rate of 64.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.8% over the last 60 days.
Seanergy Maritime is the only pure-play Capesize ship-owner publicly listed in the United States. SHIP provides marine dry bulk transportation services through a modern fleet of 10 Capesize vessels.
The stock price of Seanergy Maritime has advanced 11.8% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 83% over the last 60 days.
The GEO Group is engaged in ownership, leasing, and management of secure facilities, processing centers, and community-based re-entry facilities in the United States, Australia, the United Kingdom, and South Africa.
GEO also provides secure facility management services, including the provision of security, administrative, rehabilitation, education, and food services; re-entry services, such as temporary housing, programming, employment assistance, and other services; electronic monitoring and supervision services.
The stock price of The GEO Group has gained 6.1% in the past four weeks. GEO has an expected earnings growth rate of 6.3% for the current year. The Zacks Consensus Estimate for current-year earnings improved 7.4% over the last 30 days.
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.