Send me real-time posts from this site at my email
Zacks

6 Stocks With Recent Price Strength Defying Market Volatility

Historically, September is the worst-performing month in Wall Street. This year, not only is history being repeated but also a storm is blowing, reminding investors of the month of March, when coronavirus-induced lockdowns had hit so hard that stock markets fell like a house of cards.

Month to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are in negative territory. Notably, the Dow and the S&P 500 ended in red in the first four weeks of this month, for the first time since August 2019. The Nasdaq Composite managed to exit the correction territory on Sep 25.Meanwhile, CBOE VIX — the best fear gauge of Wall Street — has surged in September.

Stock markets recent turmoil has prompted a section of economists and financial experts to warn of more downslide going forward. They cited uncertainty regarding more fiscal stimulus, conflicting news on the availability of a coronavirus vaccine, mounting tech war between the United States and China, and the upcoming U.S. presidential election as the sources of volatility.

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 freshly 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 www.zacks.com/registration/premium/login/?continue_to=%2Fsto...">the complete list of today’s Zacks #1 Rank stocks here.

Average Broker Rating 1 or 2: 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 22.

Here we present six out of those 22 stocks:

Nautilus Inc. NLS is a fitness solutions company, which designs, develops, sources, and markets cardio and strength fitness products, and related accessories for consumer and commercial use in the United States, Canada and internationally. It operates in two segments, Direct and Retail.

The stock price has gained 41.9% in the past four weeks. The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved more than 100% over the last 60 days.

Hibbett Sports Inc. HIBB is engaged in the retail of athletic-inspired fashion products through its stores. Its stores offer a range of merchandise, including athletic footwear, athletic and fashion apparel, sports equipment, and related accessories. It operates in two segments, Lawson and Bolt.

The stock price has jumped 16% in the past four weeks. The company has expected earnings growth of 86.3% for the current year (ending January 2021). The Zacks Consensus Estimate for the current year has improved more than 48.1% over the last 30 days.

Live Oak Bancshares Inc. LOB provides various commercial banking products and services to individuals, small businesses, and professionals in North Carolina.

The stock price has climbed 14.8% in the past four weeks. The company has expected earnings growth of 6.8% for the current year. The Zacks Consensus Estimate for the current year has improved more than 100% over the last 60 days.

Mr. Cooper Group Inc. COOP provides quality servicing, origination and transaction-based services principally to single-family residences in the United States. Its brands are Mr. Cooper and Xome.

The stock price has surged 14.7% in the past four weeks. The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved  84.8% over the last 60 days.

FedEx Corp. FDX is the leader in global express delivery services. It provides a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the FedEx brand.

The stock price has  advanced 12.7% in the past four weeks. The company has expected earnings growth of 57.4% for the current year (ending May 2021). The Zacks Consensus Estimate for the current year has improved 3% over the last 7 days.

NIKE Inc. NKE is engaged in the business of designing, developing and marketing of athletic footwear, apparel, equipment and accessories, and services for men, women and children worldwide.

The stock price has  gained 10.6% in the past four weeks. The company has an expected earnings growth rate of 73.8% for the current year (ending May 2021). The Zacks Consensus Estimate for the current year has improved by 17.3% over the last 7 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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
NIKE, Inc. (NKE): Free Stock Analysis Report
 
Hibbett Sports, Inc. (HIBB): Free Stock Analysis Report
 
FedEx Corporation (FDX): Free Stock Analysis Report
 
Nautilus Group, Inc. The (NLS): Free Stock Analysis Report
 
Live Oak Bancshares, Inc. (LOB): Free Stock Analysis Report
 
MR. COOPER GROUP INC (COOP): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue