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5 Relative Price Strength Stocks That You Should Buy Now
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Wall Street has maintained its upward momentum in the second half of 2024, building on a robust first half. In light of this favorable scenario, a prudent investment approach involves scrutinizing indicators of relative price strength. Five such stocks to buy would be Synchronoss Technologies (SNCR - Free Report) , Mercury General Corporation (MCY - Free Report) , Universal Health Services (UHS - Free Report) , Veracyte (VCYT - Free Report) and Mueller Water Products (MWA - Free Report) .
Markets Defy Elevated Interest Rates
The U.S. economy continues to demonstrate resilience, even with interest rates at a 23-year high and inflation remaining elevated. Despite these challenging conditions, consumer spending has held strong. The rally in U.S. stock markets, which began in early 2023, shows no significant signs of slowing down, aside from some minor fluctuations. This upward trend is expected to gain momentum in the coming months, especially with a potential interest rate cut in September appearing increasingly likely.
Against this positive backdrop, astute investors are concentrating on relative price performance, strategically identifying and investing in promising stocks to achieve accelerated 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 23 stocks that made it through the screen:
Synchronoss Technologies: Based in Bridgewater, NJ, the company provides technology that enables large corporations to provide personal cloud solutions to customers. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has more than doubled. SNCR has a VGM Score of A.
Notably, the Zacks Consensus Estimate for Synchronoss Technologies’ 2024 earnings per share indicates 184.4% year-over-year growth. The firm has a market capitalization of $148.4 million. SNCR shares have surged 58.1% in a year.
Mercury General: The company is a leading provider of personal automobile insurance. The Zacks Consensus Estimate for 2024 earnings of Mercury General indicates an astounding 1,233.3% growth. Headquartered in Los Angeles, CA, MCY has a VGM Score of B.
The firm has a market capitalization of $946.5 million. Mercury General beat the Zacks Consensus Estimate for earnings in each of the last four quarters and has a trailing four-quarter earnings surprise of roughly 3,539.1%, on average. MCY shares have gained 125.6% in a year.
Universal Health Services: Based in King of Prussia, PA, the company owns and operates (through its subsidiaries) acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers and radiation oncology centers. UHS’ expected EPS growth rate for three to five years is currently 19%, which compares favorably with the industry's growth rate of 14.7%. The company has a VGM Score of A.
Notably, over the past 60 days, the Zacks Consensus Estimate for Universal Health Services’ 2024 earnings has moved up 15.6%. It beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 14.6%. UHS shares have gone up 74.6% in a year.
Veracyte: Veracyte is a global diagnostics company that provides clinicians with valuable insights to diagnose and treat cancer. The 2024 Zacks Consensus Estimate for this South San Francisco, CA-based firm indicates a 360% year-over-year earnings per share jump. VCYT has a VGM Score of B.
Veracyte beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 328.4%, on average. VCYT shares have increased 20.7% in a year.
Mueller Water Products: Based in Atlanta, GA, the company is a leading manufacturer and marketer of products and services used to move and measure water. MWA’s current market capitalization is $3.3 billion. The company has a VGM Score of B.
Notably, over the past 60 days, the Zacks Consensus Estimate for Mueller Water Products’ fiscal 2024 earnings has moved up 17.7%. It beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 64.1%. MWA shares have gone up 48.9% 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
5 Relative Price Strength Stocks That You Should Buy Now
Wall Street has maintained its upward momentum in the second half of 2024, building on a robust first half. In light of this favorable scenario, a prudent investment approach involves scrutinizing indicators of relative price strength. Five such stocks to buy would be Synchronoss Technologies (SNCR - Free Report) , Mercury General Corporation (MCY - Free Report) , Universal Health Services (UHS - Free Report) , Veracyte (VCYT - Free Report) and Mueller Water Products (MWA - Free Report) .
Markets Defy Elevated Interest Rates
The U.S. economy continues to demonstrate resilience, even with interest rates at a 23-year high and inflation remaining elevated. Despite these challenging conditions, consumer spending has held strong. The rally in U.S. stock markets, which began in early 2023, shows no significant signs of slowing down, aside from some minor fluctuations. This upward trend is expected to gain momentum in the coming months, especially with a potential interest rate cut in September appearing increasingly likely.
Against this positive backdrop, astute investors are concentrating on relative price performance, strategically identifying and investing in promising stocks to achieve accelerated 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 23 stocks that made it through the screen:
Synchronoss Technologies: Based in Bridgewater, NJ, the company provides technology that enables large corporations to provide personal cloud solutions to customers. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has more than doubled. SNCR has a VGM Score of A.
Notably, the Zacks Consensus Estimate for Synchronoss Technologies’ 2024 earnings per share indicates 184.4% year-over-year growth. The firm has a market capitalization of $148.4 million. SNCR shares have surged 58.1% in a year.
Mercury General: The company is a leading provider of personal automobile insurance. The Zacks Consensus Estimate for 2024 earnings of Mercury General indicates an astounding 1,233.3% growth. Headquartered in Los Angeles, CA, MCY has a VGM Score of B.
The firm has a market capitalization of $946.5 million. Mercury General beat the Zacks Consensus Estimate for earnings in each of the last four quarters and has a trailing four-quarter earnings surprise of roughly 3,539.1%, on average. MCY shares have gained 125.6% in a year.
Universal Health Services: Based in King of Prussia, PA, the company owns and operates (through its subsidiaries) acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers and radiation oncology centers. UHS’ expected EPS growth rate for three to five years is currently 19%, which compares favorably with the industry's growth rate of 14.7%. The company has a VGM Score of A.
Notably, over the past 60 days, the Zacks Consensus Estimate for Universal Health Services’ 2024 earnings has moved up 15.6%. It beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 14.6%. UHS shares have gone up 74.6% in a year.
Veracyte: Veracyte is a global diagnostics company that provides clinicians with valuable insights to diagnose and treat cancer. The 2024 Zacks Consensus Estimate for this South San Francisco, CA-based firm indicates a 360% year-over-year earnings per share jump. VCYT has a VGM Score of B.
Veracyte beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 328.4%, on average. VCYT shares have increased 20.7% in a year.
Mueller Water Products: Based in Atlanta, GA, the company is a leading manufacturer and marketer of products and services used to move and measure water. MWA’s current market capitalization is $3.3 billion. The company has a VGM Score of B.
Notably, over the past 60 days, the Zacks Consensus Estimate for Mueller Water Products’ fiscal 2024 earnings has moved up 17.7%. It beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 64.1%. MWA shares have gone up 48.9% 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.