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7 Stocks with Recent Price Strength for Improved Returns
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“In the stock game, winning means reaching a higher price.” However, striking the right chord each time needs a fair amount of luck.
No matter how disciplined and systematic investors are, equity market volatility will always manage to get the better of them. While a few lucky ones rake in the moolah, others fall victim to ad hoc strategies.
One could resort to commonly used techniques to find beaten down stocks that have the potential to recover faster than others. However, even such investment choices bear the risk of disappointment. Particularly, one could fall into the value trap if the hidden weaknesses in a selected stock are not identified.
So, wouldn’t it be a safer strategy to look for stocks that are winners currently and have the potential to gain further?
Sounds a good idea? Here is how to execute it:
One should primarily target stocks that have recently been on a bullish run. Actually, stocks seeing price strength recently have a high chance of carrying the momentum forward.
If a stock is continuously on an uptrend, there must be a solid reason or else it would have probably crashed. So, looking at stocks that are capable of beating the benchmark that they have set for themselves seems rational.
However, recent price strength alone cannot create the magic. Therefore, you need to set other relevant parameters 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.
Here are seven of the 13 stocks that made it through this screen:
NVE Corporation (NVEC - Free Report) is a recognized leader in the practical commercialization of spintronics, which many experts believe represents the next generation of microelectronics. The company surpassed the Zacks Consensus Estimate in the trailing four quarters with an average positive surprise of 14.05%.
Masonite International Corp. (DOOR - Free Report) is a designer and manufacturer of interior and exterior doors. The company surpassed the Zacks Consensus Estimate thrice while matching the same on one occasion in the trailing four quarters. It has an average positive earnings surprise of 18.07%.
NutriSystem Inc. is a leading provider of weight management products and services. They offer an at-home weight loss program based on portion-controlled, lower Glycemic Index prepared meals, weight loss plans, and private telephone and online support. The company surpassed the Zacks Consensus Estimate thrice while matching the same on one occasion in the trailing four quarters. It has an average positive earnings surprise of 24.88%.
Net 1 U.E.P.S. Technologies Inc. provides its universal electronic payment system as an alternative payment system for the unbanked and under-banked population of developing economies. The company surpassed the Zacks Consensus Estimate thrice while matching the same on one occasion in the trailing four quarters. It has an average positive earnings surprise of 14.10%.
Radiant Logistics Inc. (RLGT - Free Report) is executing a strategy to build a global transportation and supply chain management company through organic growth and the strategic acquisition of regional best-of-breed non-asset based transportation and logistics providers to offer its customers domestic and international freight forwarding and value added supply chain management services, including asset recovery and reverse logistics, order fulfillment, inventory management and warehousing. Last quarter, the company posted earnings of 10 cents, which was way higher than the Zacks Consensus Estimate of a penny.
SP Plus Corporation (SP - Free Report) provides professional parking, ground transportation, facility maintenance, security and event logistics services to property owners and managers in all markets of the real estate industry. Last quarter, the company posted an average positive earnings surprise of 40.54%.
Leucadia National Corporation is a diversified financial services holding company, principally engaged in personal and commercial lines of property and casualty insurance, life insurance, banking and lending and manufacturing. Last quarter, the company posted an average positive earnings surprise of 60.87%.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software.
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.
Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »
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7 Stocks with Recent Price Strength for Improved Returns
“In the stock game, winning means reaching a higher price.” However, striking the right chord each time needs a fair amount of luck.
No matter how disciplined and systematic investors are, equity market volatility will always manage to get the better of them. While a few lucky ones rake in the moolah, others fall victim to ad hoc strategies.
One could resort to commonly used techniques to find beaten down stocks that have the potential to recover faster than others. However, even such investment choices bear the risk of disappointment. Particularly, one could fall into the value trap if the hidden weaknesses in a selected stock are not identified.
So, wouldn’t it be a safer strategy to look for stocks that are winners currently and have the potential to gain further?
Sounds a good idea? Here is how to execute it:
One should primarily target stocks that have recently been on a bullish run. Actually, stocks seeing price strength recently have a high chance of carrying the momentum forward.
If a stock is continuously on an uptrend, there must be a solid reason or else it would have probably crashed. So, looking at stocks that are capable of beating the benchmark that they have set for themselves seems rational.
However, recent price strength alone cannot create the magic. Therefore, you need to set other relevant parameters 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.
Here are seven of the 13 stocks that made it through this screen:
NVE Corporation (NVEC - Free Report) is a recognized leader in the practical commercialization of spintronics, which many experts believe represents the next generation of microelectronics. The company surpassed the Zacks Consensus Estimate in the trailing four quarters with an average positive surprise of 14.05%.
Masonite International Corp. (DOOR - Free Report) is a designer and manufacturer of interior and exterior doors. The company surpassed the Zacks Consensus Estimate thrice while matching the same on one occasion in the trailing four quarters. It has an average positive earnings surprise of 18.07%.
NutriSystem Inc. is a leading provider of weight management products and services. They offer an at-home weight loss program based on portion-controlled, lower Glycemic Index prepared meals, weight loss plans, and private telephone and online support. The company surpassed the Zacks Consensus Estimate thrice while matching the same on one occasion in the trailing four quarters. It has an average positive earnings surprise of 24.88%.
Net 1 U.E.P.S. Technologies Inc. provides its universal electronic payment system as an alternative payment system for the unbanked and under-banked population of developing economies. The company surpassed the Zacks Consensus Estimate thrice while matching the same on one occasion in the trailing four quarters. It has an average positive earnings surprise of 14.10%.
Radiant Logistics Inc. (RLGT - Free Report) is executing a strategy to build a global transportation and supply chain management company through organic growth and the strategic acquisition of regional best-of-breed non-asset based transportation and logistics providers to offer its customers domestic and international freight forwarding and value added supply chain management services, including asset recovery and reverse logistics, order fulfillment, inventory management and warehousing. Last quarter, the company posted earnings of 10 cents, which was way higher than the Zacks Consensus Estimate of a penny.
SP Plus Corporation (SP - Free Report) provides professional parking, ground transportation, facility maintenance, security and event logistics services to property owners and managers in all markets of the real estate industry. Last quarter, the company posted an average positive earnings surprise of 40.54%.
Leucadia National Corporation is a diversified financial services holding company, principally engaged in personal and commercial lines of property and casualty insurance, life insurance, banking and lending and manufacturing. Last quarter, the company posted an average positive earnings surprise of 60.87%.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software.
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.
Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »