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5 Relative Price Strength Stocks to Make You Rich in Q2
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The opening quarter of 2022 brought wild market action and volatility. After robust equity returns during 2021, Wall Street saw a slowdown in the first three months of the year with the S&P 500 losing 4.9% for the period.
At the same time, it's worth mentioning that the latter half of March has witnessed signs of recovery. The major indexes recently hit a 6-week high as cease-fire negotiations continue between Russia and Ukraine, while crude oil prices have declined considerably.
Nevertheless, market watchers remain wary of galloping inflation and the start of a higher interest regime. The resurgence of new coronavirus cases in China also unnerved investors.
For investors who might want to stay exposed to the market during this uncertain phase, it is time to focus on good investment opportunities. One of the ways such potential plays could be identified is to look for signs of relative price strength.
Relative Price Strength Strategy
Investors generally gauge a stock’s potential returns by examining earnings growth and valuation multiples. At the same time, it’s essential to measure the performance of such a stock relative to its industry or peers, or an appropriate benchmark.
If you see that a stock is underperforming on fundamental factors, it would be prudent to move on and find a better alternative. However, those outperforming their respective sectors in terms of price should be selected because they stand a better chance of providing considerable returns.
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 five of the eight stocks that made it through the screen:
Target Hospitality Corp. (TH - Free Report) : The Woodlands, TX-based firm is a leading provider of rental accommodations with premium catering and value-added hospitality services. Target Hospitality has a VGM Score of A.
For 2022, TH has a projected earnings growth rate of 280%. Valued at around $558.7 million, TH shares have gained around 176.5% in a year.
The Kroger Co. (KR - Free Report) : The company engages as a grocery retailer in the United States, operating more than 2,700 supermarket locations. Kroger has a VGM Score of B. Over the past 30 days, Cincinnati, OH-based KR saw the Zacks Consensus Estimate for fiscal 2023 move up 6.7%.
Kroger beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. Valued at around $40.8 billion, KR has gained some 62.7% in a year.
Nordstrom, Inc. (JWN - Free Report) : Nordstrom is a leading fashion specialty retailer in the United States. The fiscal 2023 Zacks Consensus Estimate for this Seattle, WA-based firm indicates 200% year-over-year earnings per share growth. JWN has a VGM Score of A.
Nordstrom beat the Zacks Consensus Estimate for earnings in two of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13.9%, on average. NTR shares have lost around 25.7% in a year.
Valero Energy Corporation (VLO - Free Report) : Founded in 1980 and headquartered in San Antonia, TX, Valero Energy is one of the largest independent refiners and marketers of petroleum products in the United States. VLO has a VGM Score of A.
Notably, Valero Energy beat the Zacks Consensus Estimate for earnings in each of the last four quarters. VLO has a trailing four-quarter earnings surprise of roughly 75.7%, on average. The company’s shares have increased around 41.9% in a year.
CONSOL Energy Inc. (CEIX - Free Report) : CONSOL Energy is a producer and exporter of thermal coal and metallurgical coal. The 2022 Zacks Consensus Estimate for this Canonsburg, PA-based firm indicates 469.4% year-over-year earnings per share growth. CEIX has a VGM Score of A.
CONSOL Energy beat the Zacks Consensus Estimate for earnings in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 85.7%, on average. CEIX shares have soared around 294% in a year.
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.
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
5 Relative Price Strength Stocks to Make You Rich in Q2
The opening quarter of 2022 brought wild market action and volatility. After robust equity returns during 2021, Wall Street saw a slowdown in the first three months of the year with the S&P 500 losing 4.9% for the period.
At the same time, it's worth mentioning that the latter half of March has witnessed signs of recovery. The major indexes recently hit a 6-week high as cease-fire negotiations continue between Russia and Ukraine, while crude oil prices have declined considerably.
Nevertheless, market watchers remain wary of galloping inflation and the start of a higher interest regime. The resurgence of new coronavirus cases in China also unnerved investors.
For investors who might want to stay exposed to the market during this uncertain phase, it is time to focus on good investment opportunities. One of the ways such potential plays could be identified is to look for signs of relative price strength.
Relative Price Strength Strategy
Investors generally gauge a stock’s potential returns by examining earnings growth and valuation multiples. At the same time, it’s essential to measure the performance of such a stock relative to its industry or peers, or an appropriate benchmark.
If you see that a stock is underperforming on fundamental factors, it would be prudent to move on and find a better alternative. However, those outperforming their respective sectors in terms of price should be selected because they stand a better chance of providing considerable returns.
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 five of the eight stocks that made it through the screen:
Target Hospitality Corp. (TH - Free Report) : The Woodlands, TX-based firm is a leading provider of rental accommodations with premium catering and value-added hospitality services. Target Hospitality has a VGM Score of A.
For 2022, TH has a projected earnings growth rate of 280%. Valued at around $558.7 million, TH shares have gained around 176.5% in a year.
The Kroger Co. (KR - Free Report) : The company engages as a grocery retailer in the United States, operating more than 2,700 supermarket locations. Kroger has a VGM Score of B. Over the past 30 days, Cincinnati, OH-based KR saw the Zacks Consensus Estimate for fiscal 2023 move up 6.7%.
Kroger beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. Valued at around $40.8 billion, KR has gained some 62.7% in a year.
Nordstrom, Inc. (JWN - Free Report) : Nordstrom is a leading fashion specialty retailer in the United States. The fiscal 2023 Zacks Consensus Estimate for this Seattle, WA-based firm indicates 200% year-over-year earnings per share growth. JWN has a VGM Score of A.
Nordstrom beat the Zacks Consensus Estimate for earnings in two of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13.9%, on average. NTR shares have lost around 25.7% in a year.
Valero Energy Corporation (VLO - Free Report) : Founded in 1980 and headquartered in San Antonia, TX, Valero Energy is one of the largest independent refiners and marketers of petroleum products in the United States. VLO has a VGM Score of A.
Notably, Valero Energy beat the Zacks Consensus Estimate for earnings in each of the last four quarters. VLO has a trailing four-quarter earnings surprise of roughly 75.7%, on average. The company’s shares have increased around 41.9% in a year.
CONSOL Energy Inc. (CEIX - Free Report) : CONSOL Energy is a producer and exporter of thermal coal and metallurgical coal. The 2022 Zacks Consensus Estimate for this Canonsburg, PA-based firm indicates 469.4% year-over-year earnings per share growth. CEIX has a VGM Score of A.
CONSOL Energy beat the Zacks Consensus Estimate for earnings in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 85.7%, on average. CEIX shares have soared around 294% in a year.
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.