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5 Top Stocks That Are Powered by Relative Price Strength
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While a highly successful 2021 propelled the U.S. equity markets to historic levels, the resurgence of coronavirus either in the form of Delta or Omicron has been creating intermittent hurdles. Therefore, as we step into the New Year, it is time to focus on good investment opportunities.
Earnings growth and valuation multiples are indeed important for investors to determine a stock's ability to offer considerable returns. But these are also essential for determining whether a stock’s price performance is better than its peers or the industry average.
If a stock’s performance is lacking that of the broader groups, despite impressive earnings growth or valuation multiples, then something must be wrong.
It’s always advisable to stay away from these stocks and bet on those that are outperforming their respective industry or benchmark. This is because betting on a winner always proves to be lucrative.
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 for 1 to 3 months at least and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.
Finally, it is crucial 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 the five stocks that made it through the screen:
RCI Hospitality Holdings, Inc. (RICK - Free Report) : Founded in 1983 and headquartered in Houston, TX, RCI Hospitality specializes in the acquisition and management of adult nightclubs and sports bars. RICK has a VGM Score of B.
Notably, RCI Hospitality beat the Zacks Consensus Estimate for earnings in each of the last four quarters. RICK has a trailing four-quarter earnings surprise of roughly 67.7%, on average. The company’s shares have rocketed around 129.4% in a year.
Berry Global Group, Inc. (BERY - Free Report) : The company manufactures and distributes nonwoven specialty materials, engineered materials and consumer packaging products for the consumer and industrial end-markets. Berry Global has a VGM Score of A. Over the past 60 days, Evansville, IN-based BERY saw the Zacks Consensus Estimate for fiscal 2022 move up 18%.
Berry Global beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 16.5%. Valued at around $9.8 billion, BERY has rallied 34.5% in a year.
Earthstone Energy, Inc. : Earthstone Energy is an oil and gas producer with a strong footprint in the Midland basin of west Texas and the Eagle Ford trend of south Texas. The 2022 Zacks Consensus Estimate for The Woodlands, TX-based firm indicates 112.2% earnings per share growth over 2021. ESTE has a VGM Score of A.
Earthstone Energy beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 93.2%, on average. ESTE shares have gained around 128.7% in a year.
Titan International, Inc. : This West Chicago, IL-based firm manufactures wheels and tires primarily for off-the-road applications including farm machinery, construction and mining equipment. Titan International has a VGM Score of A.
For 2022, Titan International has a projected earnings growth rate of 48.4%. The company beat the Zacks Consensus Estimate for earnings, the average being 32.1%. TWI shares have gained around 64.6% in a year.
Equitable Holdings, Inc. (EQH - Free Report) : Equitable Holdings is an insurance company that offers retirement and protection products, plus investment management services. The 2022 Zacks Consensus Estimate for this New York-based firm indicates 4.1% earnings per share growth over 2021. EQH has a VGM Score of B.
Notably, Equitable Holdings beat the Zacks Consensus Estimate for earnings in three of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 24.8%, on average. EQH shares have gained around 33.4% in a year.
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 Top Stocks That Are Powered by Relative Price Strength
While a highly successful 2021 propelled the U.S. equity markets to historic levels, the resurgence of coronavirus either in the form of Delta or Omicron has been creating intermittent hurdles. Therefore, as we step into the New Year, it is time to focus on good investment opportunities.
Earnings growth and valuation multiples are indeed important for investors to determine a stock's ability to offer considerable returns. But these are also essential for determining whether a stock’s price performance is better than its peers or the industry average.
If a stock’s performance is lacking that of the broader groups, despite impressive earnings growth or valuation multiples, then something must be wrong.
It’s always advisable to stay away from these stocks and bet on those that are outperforming their respective industry or benchmark. This is because betting on a winner always proves to be lucrative.
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 for 1 to 3 months at least and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.
Finally, it is crucial 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 the five stocks that made it through the screen:
RCI Hospitality Holdings, Inc. (RICK - Free Report) : Founded in 1983 and headquartered in Houston, TX, RCI Hospitality specializes in the acquisition and management of adult nightclubs and sports bars. RICK has a VGM Score of B.
Notably, RCI Hospitality beat the Zacks Consensus Estimate for earnings in each of the last four quarters. RICK has a trailing four-quarter earnings surprise of roughly 67.7%, on average. The company’s shares have rocketed around 129.4% in a year.
Berry Global Group, Inc. (BERY - Free Report) : The company manufactures and distributes nonwoven specialty materials, engineered materials and consumer packaging products for the consumer and industrial end-markets. Berry Global has a VGM Score of A. Over the past 60 days, Evansville, IN-based BERY saw the Zacks Consensus Estimate for fiscal 2022 move up 18%.
Berry Global beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 16.5%. Valued at around $9.8 billion, BERY has rallied 34.5% in a year.
Earthstone Energy, Inc. : Earthstone Energy is an oil and gas producer with a strong footprint in the Midland basin of west Texas and the Eagle Ford trend of south Texas. The 2022 Zacks Consensus Estimate for The Woodlands, TX-based firm indicates 112.2% earnings per share growth over 2021. ESTE has a VGM Score of A.
Earthstone Energy beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 93.2%, on average. ESTE shares have gained around 128.7% in a year.
Titan International, Inc. : This West Chicago, IL-based firm manufactures wheels and tires primarily for off-the-road applications including farm machinery, construction and mining equipment. Titan International has a VGM Score of A.
For 2022, Titan International has a projected earnings growth rate of 48.4%. The company beat the Zacks Consensus Estimate for earnings, the average being 32.1%. TWI shares have gained around 64.6% in a year.
Equitable Holdings, Inc. (EQH - Free Report) : Equitable Holdings is an insurance company that offers retirement and protection products, plus investment management services. The 2022 Zacks Consensus Estimate for this New York-based firm indicates 4.1% earnings per share growth over 2021. EQH has a VGM Score of B.
Notably, Equitable Holdings beat the Zacks Consensus Estimate for earnings in three of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 24.8%, on average. EQH shares have gained around 33.4% in a year.
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.