Back to top

Image: Shutterstock

5 Stocks With Recent Price Strength Amid Disappointing Data

Read MoreHide Full Article

The Wall Street rally which commenced on Mar 24 has not shown any sign of retreat. Many economists and financial researchers have called this a "bear-market rally." What is remarkable here is that the rally is crossing one hurdle after another such as disappointing economic data and deteriorating corporate earnings. The latest hindrance in the path of the rally came in the form of April’s skyrocketing payroll decline, which it again managed to override last week.

Notably, last month was an impressive one for Wall Street. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — rallied 11.1%, 12.7% and 15.5%, respectively, in April. For both the Dow and the S&P 500, it was the best April since 1938 while the Nasdaq Composite witnessed the best April in its history.

Meanwhile, several U.S. states are considering opening the economy restricting lockdown measures. Major Eurozone countries are also preparing to return to economic normalcy as the coronavirus pandemic stabilizes.

At this stage, wouldn’t it be a safer strategy to look for stocks that are winners and have the potential to gain further?

Sounds Good? Here’s How to Execute It:

One should primarily target stocks that have recently been on a bull run. Actually, 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 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 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.

Just these few criteria have narrowed down the search from over 7,700 stocks to just nine.

Here we present five out of those nine stocks:

ThermoGenesis Holdings Inc. (THMO - Free Report) develops, commercializes and markets a range of automated technologies for chimeric antigen receptor (CAR)-T and other cell-based therapies in the United States, China, Rest of Asia, Europe, and internationally.

The stock price has rallied 157.5% in the past four weeks. The company has an expected earnings growth of 106% for the current year. The Zacks Consensus Estimate for the current year has improved by 466.7% over the last 30 days.

Minerva Neurosciences Inc. (NERV - Free Report)   is a clinical-stage biopharmaceutical company engaged in the development and commercialization of a portfolio of product candidates for the treatment of central nervous system diseases.

The stock price has jumped 113.1% in the past four weeks. The company has an expected earnings growth of 45.4% for the current year. The Zacks Consensus Estimate for the current year has improved by 12.9% over the last 30 days.

Sprout Social Inc. (SPT - Free Report) designs, develops and operates a web-based social media management tool in Americas, EMEA, and the Asia Pacific. It offers cloud software that brings together social messaging, data, and workflows in a unified system of record, intelligence and action.  

The stock price has soared 94.3% in the past four weeks. The company has an expected earnings growth of 52.6% for the current year. The Zacks Consensus Estimate for the current year has improved by 3.5% over the last 30 days.

Black Diamond Therapeutics Inc. (BDTX - Free Report) a precision oncology medicine company  that discovers and develops small molecule, tumor-agnostic therapies. Its lead product candidate BDTX-189 is an inhibitor of non-canonical and oncogenic mutations of ErbB kinases epidermal growth factor receptor and tyrosine-protein kinase.

The stock price has climbed 74.3% in the past four weeks. The company has an expected earnings growth of 88.1% for the current year. The Zacks Consensus Estimate for the current year has improved by 3.3% over the last 30 days.

Zynex Inc. (ZYXI - Free Report) designs, manufactures and markets medical devices to treat chronic and acute pain; and activate and exercise muscles for rehabilitative purposes with electrical stimulation.

The stock price has surged 69.5% in the past four weeks. The company has an expected earnings growth of 42.9% for the current year. The Zacks Consensus Estimate for the current year has improved by 11.1% 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.