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Zacks

5 Stocks Set to Pop on Remarkable 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 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 29 stocks that made it through the screen:

Knowles Corporation KN: Knowles is a premier provider of advanced micro-acoustic, audio processing and precision device solutions, serving the mobile consumer electronics, communications, medical, defense, automotive and industrial markets. The 2021 Zacks Consensus Estimate for this Itasca, IL-based firm indicates 88.06% earnings per share growth over 2020. Knowles has a VGM Score of B.

Triton International Limited TRTN: One of the largest lessors of intermodal containers (large steel boxes that are used for transporting freight by ship/rail/truck), Triton International has a VGM Score of B. Over the past 30 days, this Hamilton, Bermuda-based company has seen the Zacks Consensus Estimate for 2021 improve 21.4%.

Evercore Inc. EVR: This New York-based company is a premier global independent investment banking advisory firm. Evercore has a VGM Score of B and an excellent earnings surprise history, having surpassed estimates in each of the last four quarters by 96.39%, on average.

PDC Energy, Inc. PDCE: PDC Energy is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids on the Wattenberg Field in Colorado and the Delaware Basin in Texas. Sporting a VGM Score of A, this Denver, CO-headquartered company’s expected EPS growth rate for three to five years currently stands at 38.4%, comparing favorably with the industry's growth rate of 18.5%.

LyondellBasell LYB: Formed in 2007 and headquartered in Houston, TX, LyondellBasell is among the leading plastics, chemical and refining companies globally. The company has a VGM Score of B and an enviable earnings surprise history, having surpassed estimates in each of the last four quarters, delivering an earnings surprise of 26.48%, 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.

 


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PDC Energy, Inc. (PDCE): Get Free Report
 
Evercore Inc (EVR): Free Stock Analysis Report
 
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Triton International Limited (TRTN): Free Stock Analysis Report
 
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