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5 Stocks With Recent Price Strength Backed by October Rally
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Wall Street closed a fabulous October after a highly disappointing September. Last month, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — rallied 14%, 8% and 3.9%, respectively. The Dow particularly was in focus, as it made a solid rebound to record its best October performance ever and its best month since 1976.
U.S. stock markets saw this astonishing performance despite the fact that October is historically known as an unfavorable month for investors. We are not out of the woods as concerns like the complete devastation of the global supply-chain system, record-high inflation, continuation of higher interest rate regime and a possible recession are still affecting investor sentiment. However, several positive signs have also emerged last month.
U.S. GDP grew 2.6% in the third quarter, beating the consensus estimate of 2.2%. Market participants were worried that the economy might enter into a recession after it contracted in the first two quarters of this year.
In third-quarter 2022, the chain-weighted price index — a cost-of-living index adjusted for consumer behavior — rose 4.1%, well below the consensus estimate of 5.3%. The personal consumption expenditure (PCE) price index increased 4.2%, exhibiting a sharp fall from 7.3% in the second quarter. The core (excluding the volatile food and energy items) PCE price index — Fed’s favorite inflation gauge — rose 4.5% in the third quarter, in line with market’s expectation. All these data indicate that the peak of the current inflation may be behind us.
A handful of stocks have shown price strength. These stocks are likely to gain in the near term and are backed by a favorable Zacks Rank. Five of them are — Ardmore Shipping Corp. (ASC - Free Report) , International Seaways Inc. (INSW - Free Report) , Employers Holdings Inc. (EIG - Free Report) , Old Second Bancorp Inc. (OSBC - Free Report) and Vista Energy S.A.B. de C.V. (VIST - Free Report) .
Here’s How We Arrived at the Picks
We have primarily targeted stocks that have freshly been on a bull run. 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 it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.
However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed 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 the complete list of today’s Zacks #1 Rank stocks here.
Average Broker Rating 1: 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 narrowed down the search from over 7,700 stocks to 12.
Let’s discuss five out of these 12 stocks:
Ardmore Shipping is engaged in the ownership and operation of product and chemical tankers. ASC provides shipping services to customers through voyage charters, commercial pools, and time charters.
Ardmore Shipping provides seaborne transportation of petroleum products and chemicals worldwide to oil majors, national oil companies, oil and chemical traders, and chemical companies.
The stock price of ASC has soared 47.7% in the past four weeks. Ardmore Shipping has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the last seven days.
International Seaways is a tanker company. INSW provides energy transportation services for crude oil and petroleum products. International Seaways owns and operates a fleet including ULCC, eight VLCCs, eight Aframaxes/LR2s, 12 Panamaxes/LR1s and 20 MR tankers.
The stock price of International Seaways has jumped 32% in the past four weeks. INSW has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 1% over the last seven days.
Employers Holdings is a specialty provider of workers compensation insurance focused on select small businesses engaged in low to medium hazard industries. EIG markets its products through independent local, regional, and national agents and brokers, as well as through its strategic partnerships and alliances and relationships with national, regional, and local trade groups and associations.
The stock price of Employers Holdings has climbed 27% in the past four weeks. EIG has an expected earnings growth rate of 3.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 14% over the last seven days.
Old Second Bancorp operates as the bank holding company for Old Second National Bank that provides community banking services. OSBC provides demand, NOW, money market, savings, time deposit, individual retirement, and checking accounts, as well as certificate of deposit accounts. Old Second Bancorp also offers commercial loans, lease financing receivables, commercial real estate loans, construction loans, residential real estate loans, and signature loans.
The stock price of OSBC has appreciated 21.6% in the past four weeks. Old Second Bancorp has an expected earnings growth rate of 16.9% for the current year. The Zacks Consensus Estimate for current-year earnings improved 4.6% over the last seven days.
Vista Energy is engaged in the exploration and production of oil and gas in Latin America. VIST focuses on the identification, acquisition and development of oil and gas fields primarily in Mexico, Argentina, Brazil and Colombia.
The stock price of Vista Energy has advanced 21.5% in the past four weeks. VIST has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 29.6% over the last 30 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.
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 Stocks With Recent Price Strength Backed by October Rally
Wall Street closed a fabulous October after a highly disappointing September. Last month, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — rallied 14%, 8% and 3.9%, respectively. The Dow particularly was in focus, as it made a solid rebound to record its best October performance ever and its best month since 1976.
U.S. stock markets saw this astonishing performance despite the fact that October is historically known as an unfavorable month for investors. We are not out of the woods as concerns like the complete devastation of the global supply-chain system, record-high inflation, continuation of higher interest rate regime and a possible recession are still affecting investor sentiment. However, several positive signs have also emerged last month.
U.S. GDP grew 2.6% in the third quarter, beating the consensus estimate of 2.2%. Market participants were worried that the economy might enter into a recession after it contracted in the first two quarters of this year.
In third-quarter 2022, the chain-weighted price index — a cost-of-living index adjusted for consumer behavior — rose 4.1%, well below the consensus estimate of 5.3%. The personal consumption expenditure (PCE) price index increased 4.2%, exhibiting a sharp fall from 7.3% in the second quarter. The core (excluding the volatile food and energy items) PCE price index — Fed’s favorite inflation gauge — rose 4.5% in the third quarter, in line with market’s expectation. All these data indicate that the peak of the current inflation may be behind us.
A handful of stocks have shown price strength. These stocks are likely to gain in the near term and are backed by a favorable Zacks Rank. Five of them are — Ardmore Shipping Corp. (ASC - Free Report) , International Seaways Inc. (INSW - Free Report) , Employers Holdings Inc. (EIG - Free Report) , Old Second Bancorp Inc. (OSBC - Free Report) and Vista Energy S.A.B. de C.V. (VIST - Free Report) .
Here’s How We Arrived at the Picks
We have primarily targeted stocks that have freshly been on a bull run. 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 it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.
However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed 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 the complete list of today’s Zacks #1 Rank stocks here.
Average Broker Rating 1: 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 narrowed down the search from over 7,700 stocks to 12.
Let’s discuss five out of these 12 stocks:
Ardmore Shipping is engaged in the ownership and operation of product and chemical tankers. ASC provides shipping services to customers through voyage charters, commercial pools, and time charters.
Ardmore Shipping provides seaborne transportation of petroleum products and chemicals worldwide to oil majors, national oil companies, oil and chemical traders, and chemical companies.
The stock price of ASC has soared 47.7% in the past four weeks. Ardmore Shipping has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the last seven days.
International Seaways is a tanker company. INSW provides energy transportation services for crude oil and petroleum products. International Seaways owns and operates a fleet including ULCC, eight VLCCs, eight Aframaxes/LR2s, 12 Panamaxes/LR1s and 20 MR tankers.
The stock price of International Seaways has jumped 32% in the past four weeks. INSW has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 1% over the last seven days.
Employers Holdings is a specialty provider of workers compensation insurance focused on select small businesses engaged in low to medium hazard industries. EIG markets its products through independent local, regional, and national agents and brokers, as well as through its strategic partnerships and alliances and relationships with national, regional, and local trade groups and associations.
The stock price of Employers Holdings has climbed 27% in the past four weeks. EIG has an expected earnings growth rate of 3.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 14% over the last seven days.
Old Second Bancorp operates as the bank holding company for Old Second National Bank that provides community banking services. OSBC provides demand, NOW, money market, savings, time deposit, individual retirement, and checking accounts, as well as certificate of deposit accounts. Old Second Bancorp also offers commercial loans, lease financing receivables, commercial real estate loans, construction loans, residential real estate loans, and signature loans.
The stock price of OSBC has appreciated 21.6% in the past four weeks. Old Second Bancorp has an expected earnings growth rate of 16.9% for the current year. The Zacks Consensus Estimate for current-year earnings improved 4.6% over the last seven days.
Vista Energy is engaged in the exploration and production of oil and gas in Latin America. VIST focuses on the identification, acquisition and development of oil and gas fields primarily in Mexico, Argentina, Brazil and Colombia.
The stock price of Vista Energy has advanced 21.5% in the past four weeks. VIST has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 29.6% over the last 30 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.