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Fight August Volatility With 'Strong Buy' Stocks Trading Near Highs
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Stocks fell on Tuesday as Wall Street attempts to make sense of weak economic data out of China that saw the world’s second-largest economy cut rates and suspend youth jobless data. In sharp contrast, U.S. retail sales came in hotter than projected for July as the U.S. economy remains resilient.
The selling today sent the Nasdaq right back below its 50-day moving average, with the S&P 500 hovering near that key level. Many stocks have taken a hit recently and more profit-taking could be around corner.
Despite the wave of selling and volatility through the first half of August, the foundation that supported much of the 2023 comeback appears to remain intact. This backdrop means investors likely want to search for stocks that have boosted their earnings outlooks recently and are still trading near their highs through the somewhat rocky start to August.
Don't Be Afraid of New Highs
Some investors might prefer not to buy stocks at new highs. But if somebody asked you what the best stocks in your portfolio are, it’s likely you would name the stocks moving up the most.
The most basic idea is that the winners in your portfolio are the ones going up. If a stock is underperforming the market or going down, you'll quickly identify it as one of your worst holdings. Therefore, it makes sense that some of these stocks will be reaching new highs along the way.
Many investors are hesitant to buy stocks making new 52-week highs. But there really isn’t any reason to be. Some may worry that they have already missed the mark at that point, or that now it has more room to fall. Still, a stock making a new 52-week high is a ‘good thing,’ just as one falling to a new 52-week low is a ‘bad thing.’
On top of that, would the person who doesn’t want to buy stocks making new highs be upset if a stock they owned broke out to a new 52-week high? Statistics have also shown that stocks making new highs have a tendency of making even higher highs. And aren’t these the stocks we all dream about?
Now obviously, the fundamentals need to be there, and you should try to keep an eye on valuations. But if you were in a stock making new highs and cheering it on, it seems odd to be afraid of one doing the same just because you haven't bought it yet.
Think about this: A stock just made a new-52 week high, which is great news. Guess what? Last year it made a new 52-week high as well. And the year before that. And the year before that. Can you imagine all the money you'd be leaving on the table if you were afraid of being in stocks every time they made a new high?
Parameters
• Current Price/52-Week High greater than or equal to .80
• Percent Change in Price over 12 Weeks greater than 0
• Percent Change in Price over 4 Weeks greater than 0
• Zacks Rank equal to 1
• Price/Sales Ratio less than or equal to Industry Median
• P/E (using F1 Estimates) less than or equal to Industry Median
• Projected One Year EPS Growth F(1)/F(0) greater than or equal to Industry Median
• Current Avg. 20-Day Volume greater than Previous Week's Avg. 20-Day Volume
• All of the above parameters are applied to stocks with a Price greater than or equal to $5 and an Average 20-Day Volume of greater than or equal to 100,000 shares.
• Percent Change in Price over 12 Weeks + Percent Change in Price over 4 Weeks equal to Top # 5
Here are two of the five stocks that made it through today’s screen…
ePlus, Inc. provides technology and financing solutions. The company’s solution offerings include cloud, data centers, security, networking, AI, and beyond. ePlus’ services business features professional services, project management, consulting services, strategic technology staffing, and more. ePlus grew its revenue by 16% during its fiscal 2022 and 14% in fiscal 2023.
ePlus on August 7 posted blowout Q1 fiscal 2024 results, topping both our earnings and revenue estimates. Zacks estimates call for ePlus to post 11% revenue growth in its FY24 and another 6% in FY25 to pull in $2.42 billion.
The tech firm’s consensus earnings estimates for FY24 and FY25 have surged by double digits since its report to help it land a Zacks Rank #1 (Strong Buy). With this in mind, its adjusted earnings are projected to climb by 6% and 8%, respectively over the next two years.
Image Source: Zacks Investment Research
PLUS shares have soared 384% over the last decade to easily outpace the Zacks Tech sector’s 252% climb. This run includes a 23% pop during the past 12 months.
ePlus is part of the Zacks Business - Software Services industry that currently ranks in the top 23% of over 250 Zacks industries. And it trades at a 40% discount to its five-year highs at 13.4X forward 12-month earnings and 45% below the Zacks Tech sector.
Vertiv provides critical digital infrastructure and continuity solutions from the cloud to the edge of the network. Vertiv helps clients deal with critical issues facing data centers, communication networks, and commercial and industrial facilities through its portfolio of power, cooling, and IT infrastructure solutions and services. Vertiv topped our Q2 earnings and revenues estimates on August 2, crushing earnings by nearly 60%.
Vertiv’s improved earnings outlook helps it land a Zacks Rank #1 (Strong Buy). Zacks estimates call for VRT’s revenue to climb 20% this year and 8% higher in 2024 to hit $7.38 billion. The digital infrastructure and continuity solutions firm’s adjusted earnings are projected to grow by 200% and 19%, respectively to reach $1.96 a share next year.
Image Source: Zacks Investment Research
Vertiv shares are up 120% in the last three years vs. the Zacks tech sector’s 28% run. VRT stock is also up a whopping 154% in 2023 to trade right near fresh highs. Even though it has skyrocketed, Vertiv trades at a 22% discount to the Zacks Tech sector at 18.9X forward 12-month earnings, which also marks 25% value vs. its own highs.
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
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.
Image: Bigstock
Fight August Volatility With 'Strong Buy' Stocks Trading Near Highs
Stocks fell on Tuesday as Wall Street attempts to make sense of weak economic data out of China that saw the world’s second-largest economy cut rates and suspend youth jobless data. In sharp contrast, U.S. retail sales came in hotter than projected for July as the U.S. economy remains resilient.
The selling today sent the Nasdaq right back below its 50-day moving average, with the S&P 500 hovering near that key level. Many stocks have taken a hit recently and more profit-taking could be around corner.
Despite the wave of selling and volatility through the first half of August, the foundation that supported much of the 2023 comeback appears to remain intact. This backdrop means investors likely want to search for stocks that have boosted their earnings outlooks recently and are still trading near their highs through the somewhat rocky start to August.
Don't Be Afraid of New Highs
Some investors might prefer not to buy stocks at new highs. But if somebody asked you what the best stocks in your portfolio are, it’s likely you would name the stocks moving up the most.
The most basic idea is that the winners in your portfolio are the ones going up. If a stock is underperforming the market or going down, you'll quickly identify it as one of your worst holdings. Therefore, it makes sense that some of these stocks will be reaching new highs along the way.
Many investors are hesitant to buy stocks making new 52-week highs. But there really isn’t any reason to be. Some may worry that they have already missed the mark at that point, or that now it has more room to fall. Still, a stock making a new 52-week high is a ‘good thing,’ just as one falling to a new 52-week low is a ‘bad thing.’
On top of that, would the person who doesn’t want to buy stocks making new highs be upset if a stock they owned broke out to a new 52-week high? Statistics have also shown that stocks making new highs have a tendency of making even higher highs. And aren’t these the stocks we all dream about?
Now obviously, the fundamentals need to be there, and you should try to keep an eye on valuations. But if you were in a stock making new highs and cheering it on, it seems odd to be afraid of one doing the same just because you haven't bought it yet.
Think about this: A stock just made a new-52 week high, which is great news. Guess what? Last year it made a new 52-week high as well. And the year before that. And the year before that. Can you imagine all the money you'd be leaving on the table if you were afraid of being in stocks every time they made a new high?
Parameters
• Current Price/52-Week High greater than or equal to .80
• Percent Change in Price over 12 Weeks greater than 0
• Percent Change in Price over 4 Weeks greater than 0
• Zacks Rank equal to 1
• Price/Sales Ratio less than or equal to Industry Median
• P/E (using F1 Estimates) less than or equal to Industry Median
• Projected One Year EPS Growth F(1)/F(0) greater than or equal to Industry Median
• Current Avg. 20-Day Volume greater than Previous Week's Avg. 20-Day Volume
• All of the above parameters are applied to stocks with a Price greater than or equal to $5 and an Average 20-Day Volume of greater than or equal to 100,000 shares.
• Percent Change in Price over 12 Weeks + Percent Change in Price over 4 Weeks equal to Top # 5
Here are two of the five stocks that made it through today’s screen…
ePlus Inc. ((PLUS - Free Report) )
ePlus, Inc. provides technology and financing solutions. The company’s solution offerings include cloud, data centers, security, networking, AI, and beyond. ePlus’ services business features professional services, project management, consulting services, strategic technology staffing, and more. ePlus grew its revenue by 16% during its fiscal 2022 and 14% in fiscal 2023.
ePlus on August 7 posted blowout Q1 fiscal 2024 results, topping both our earnings and revenue estimates. Zacks estimates call for ePlus to post 11% revenue growth in its FY24 and another 6% in FY25 to pull in $2.42 billion.
The tech firm’s consensus earnings estimates for FY24 and FY25 have surged by double digits since its report to help it land a Zacks Rank #1 (Strong Buy). With this in mind, its adjusted earnings are projected to climb by 6% and 8%, respectively over the next two years.
Image Source: Zacks Investment Research
PLUS shares have soared 384% over the last decade to easily outpace the Zacks Tech sector’s 252% climb. This run includes a 23% pop during the past 12 months.
ePlus is part of the Zacks Business - Software Services industry that currently ranks in the top 23% of over 250 Zacks industries. And it trades at a 40% discount to its five-year highs at 13.4X forward 12-month earnings and 45% below the Zacks Tech sector.
Vertiv Holdings Co ((VRT - Free Report) )
Vertiv provides critical digital infrastructure and continuity solutions from the cloud to the edge of the network. Vertiv helps clients deal with critical issues facing data centers, communication networks, and commercial and industrial facilities through its portfolio of power, cooling, and IT infrastructure solutions and services. Vertiv topped our Q2 earnings and revenues estimates on August 2, crushing earnings by nearly 60%.
Vertiv’s improved earnings outlook helps it land a Zacks Rank #1 (Strong Buy). Zacks estimates call for VRT’s revenue to climb 20% this year and 8% higher in 2024 to hit $7.38 billion. The digital infrastructure and continuity solutions firm’s adjusted earnings are projected to grow by 200% and 19%, respectively to reach $1.96 a share next year.
Image Source: Zacks Investment Research
Vertiv shares are up 120% in the last three years vs. the Zacks tech sector’s 28% run. VRT stock is also up a whopping 154% in 2023 to trade right near fresh highs. Even though it has skyrocketed, Vertiv trades at a 22% discount to the Zacks Tech sector at 18.9X forward 12-month earnings, which also marks 25% value vs. its own highs.
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It's easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Click here to sign up for a free trial to the Research Wizard today.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
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/