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5 of the Best Stocks with Stellar Relative Price Strength
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Whether a stock has the potential to offer considerable returns is determined primarily by its earnings and valuation ratios. Simultaneously, it is important 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 that you have 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 over a period of 1 to 3 months at the least and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.
Finally, it is important to find out whether analysts are optimistic about the upcoming earnings results 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 the five stocks that made it through the screen:
PulteGroup, Inc. (PHM - Free Report) : PulteGroup engages in homebuilding and financial services businesses, primarily in the United States. The 2020 Zacks Consensus Estimate for this Atlanta, GA-based company is $4.09, representing 17.2% earnings per share growth over 2019. Next year’s average forecast is $4.46 pointing to another 9.2% growth. PulteGroup has a VGM Score of A.
T. Rowe Price Group, Inc. (TROW - Free Report) : A global investment management organization that provides a broad array of mutual funds, sub-advisory services and separate account management for individual and institutional investors, retirement plans and financial intermediaries, T. Rowe Price has a VGM Score of B. Over 30 days, the Baltimore, MD-based company has seen the Zacks Consensus Estimate for 2020 and 2021 increase 7.3% and 14.7%, to $8.83 and $9.03 per share, respectively.
Meritage Homes Corporation (MTH - Free Report) : Meritage Homes, headquartered in Scottsdale, AZ, is one of the leading designers and builders of single-family residences in historically high-growth regions of the United States. The firm has a VGM Score of A and an excellent earnings surprise history having surpassed estimates in each of the last four quarters by 22.1%, on average.
Janus Henderson Group plc (JHG - Free Report) : Janus Henderson Group provides investment management, administration, distribution and associated services to individuals and institutional investors through mutual funds, separate accounts and sub-advised relationships. Sporting a VGM Score of B, this London-headquartered company’s expected EPS growth rate for three to five years currently stands at 12%, comparing favorably with the industry's growth rate of 10.8%.
LHC Group, Inc. : Founded in 1994 and headquartered in Lafayette, LA, LHC Group serves as a post-acute care partner for hospitals, physicians and families in the United States. The company has a VGM Score of B and an enviable earnings surprise history having surpassed estimates in three of the last four quarters and meeting estimates in the remaining quarter. Earnings surprise was 8.1%, on average.
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.
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5 of the Best Stocks with Stellar Relative Price Strength
Whether a stock has the potential to offer considerable returns is determined primarily by its earnings and valuation ratios. Simultaneously, it is important 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 that you have 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 over a period of 1 to 3 months at the least and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.
Finally, it is important to find out whether analysts are optimistic about the upcoming earnings results 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 the five stocks that made it through the screen:
PulteGroup, Inc. (PHM - Free Report) : PulteGroup engages in homebuilding and financial services businesses, primarily in the United States. The 2020 Zacks Consensus Estimate for this Atlanta, GA-based company is $4.09, representing 17.2% earnings per share growth over 2019. Next year’s average forecast is $4.46 pointing to another 9.2% growth. PulteGroup has a VGM Score of A.
T. Rowe Price Group, Inc. (TROW - Free Report) : A global investment management organization that provides a broad array of mutual funds, sub-advisory services and separate account management for individual and institutional investors, retirement plans and financial intermediaries, T. Rowe Price has a VGM Score of B. Over 30 days, the Baltimore, MD-based company has seen the Zacks Consensus Estimate for 2020 and 2021 increase 7.3% and 14.7%, to $8.83 and $9.03 per share, respectively.
Meritage Homes Corporation (MTH - Free Report) : Meritage Homes, headquartered in Scottsdale, AZ, is one of the leading designers and builders of single-family residences in historically high-growth regions of the United States. The firm has a VGM Score of A and an excellent earnings surprise history having surpassed estimates in each of the last four quarters by 22.1%, on average.
Janus Henderson Group plc (JHG - Free Report) : Janus Henderson Group provides investment management, administration, distribution and associated services to individuals and institutional investors through mutual funds, separate accounts and sub-advised relationships. Sporting a VGM Score of B, this London-headquartered company’s expected EPS growth rate for three to five years currently stands at 12%, comparing favorably with the industry's growth rate of 10.8%.
LHC Group, Inc. : Founded in 1994 and headquartered in Lafayette, LA, LHC Group serves as a post-acute care partner for hospitals, physicians and families in the United States. The company has a VGM Score of B and an enviable earnings surprise history having surpassed estimates in three of the last four quarters and meeting estimates in the remaining quarter. Earnings surprise was 8.1%, on average.
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.