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5 Stocks With Recent Price Strength Despite a Volatile Market
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U.S. stock markets are facing fluctuations in early 2024 after a sharp rally in 2023. The euphoria surrounding technology stocks evaporated as the yield on the benchmark 10-Year U.S. Treasury Note returned northward, trading well above 4%.
This was primarily owing to the uncertainty regarding the time of the Fed’s first cut in the benchmark interest rate. Recently, several key Fed FOMC members said that they believe the rate hike regime is over. However, they are yet to be convinced that the economic condition is conducive enough for an immediate rate cut.
The Department of Labor reported that the consumer price index (CPI) — a key measure of inflation — rose 0.3% month-over-month in January, surpassing the consensus estimate of 0.2%. In December, CPI rose 0.2% month over month. However, CPI was up 3.1% in January compared with a 3.4% rise in December.
Core CPI (excluding the volatile food and energy items) increased 0.4% in January, beating the consensus estimate of 0.3%. In December too, core CPI increased 0.3%. Year over year, core CPI was up 3.9% in January, outpacing the consensus estimate of 3.7%. The year-over-year core CPI reading in December was also 3.9%, the lowest since May 2021.
This triggered an alarm among market participants and resulted in volatile trading. At present, the CME FedWatch tool shows a mere 8.5% probability that the central bank will initiate a 25-basis-point rate cut in its March FOMC meeting. The probability of the first rate cut was more than 90% at the beginning of 2024.
Moreover, 63.3% of market respondents currently expect the central bank to maintain the status quo of the benchmark lending rate at 5.25-5.5% even in the May FOMC meeting. However, an overwhelming 78% of respondents expect the first cut in the Fed fund rate in the June FOMC meeting.
As a result, few stocks have shown price strength. We have selected five stocks likely to gain in the near term on the back of a favorable Zacks Rank. These companies are — EZCORP Inc. (EZPW - Free Report) , Cimpress plc (CMPR - Free Report) , Griffon Corp. (GFF - Free Report) , Knife River Corp. (KNF - Free Report) and Modine Manufacturing Co. (MOD - 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 eight.
Let’s discuss five out of these eight stocks:
EZCORP is engaged in establishing, acquiring, and operating pawnshops that function as convenient sources of consumer credit and value-oriented specialty retailers of primarily previously owned merchandise.
Through its lending function, EZPW makes relatively small, non-recourse loans secured by pledges of tangible personal property. EZPW contracts for a pawn service charge to compensate it for each pawn loan.
The stock price of EZCORP has jumped 26.7% in the past four weeks. It has an expected earnings growth rate of 14.1% for the current year (ending September 2024). The Zacks Consensus Estimate for current-year earnings has improved 12.9% over the last 30 days.
Cimpress has benefited from strength across the Vista, National Pen and Upload & Print segments. CMPR’s Vista unit is being aided by an increase in the customer count along with the continued increase of revenue per customer. Significant growth in the e-commerce channel is driving the National Pen segment. An increasing order rate is aiding the National Pen segment.
CMPR’s investments in product innovation augur well for long-term growth. The company’s focus on cost-control measures is supporting its margin performance. Cimpress’ bullish guidance for fiscal 2024 holds promise. Also, CMPR’s business restructuring action is likely to improve customer value and operational efficiency over the long term.
The stock price of Cimpress has climbed 17.6% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the last 30 days.
Griffon is a diversified management and holding company conducting business through wholly-owned subsidiaries. GFF oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures.
Griffon provides consumer and professional, and home and building products in the United States, Europe, Canada, Australia, and internationally. GFF offers direction and assistance to its regarding acquisition and growth opportunities and divestitures.
The stock price of Griffon has surged 16.7% in the past four weeks. It has an expected earnings growth rate of 5.7% for the current year (ending September 2024). The Zacks Consensus Estimate for current-year earnings has improved 3.9% over the last 30 days.
Knife River mines aggregates and markets crushed stone, sand, gravel and related construction materials, including ready-mix concrete, asphalt and other value-added products. KNF also distributes cement and asphalt oil. KNF performs integrated contracting services.
The stock price of Knife River has advanced 9.2% in the past four weeks. It has an expected earnings growth rate of 8.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.1% over the last 30 days.
Modine Manufacturing provides engineered heat-transfer systems and heat-transfer components for use in on- and off-highway original equipment manufacturer vehicular applications. MOD operates through the Climate Solutions and Performance Technologies segments.
The stock price of Modine Manufacturing has rallied 14.4% in the past four weeks. It has an expected earnings growth rate of 67.2% for the current year (ending March 2024). The Zacks Consensus Estimate for current-year earnings has improved 7.2% 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 Despite a Volatile Market
U.S. stock markets are facing fluctuations in early 2024 after a sharp rally in 2023. The euphoria surrounding technology stocks evaporated as the yield on the benchmark 10-Year U.S. Treasury Note returned northward, trading well above 4%.
This was primarily owing to the uncertainty regarding the time of the Fed’s first cut in the benchmark interest rate. Recently, several key Fed FOMC members said that they believe the rate hike regime is over. However, they are yet to be convinced that the economic condition is conducive enough for an immediate rate cut.
The Department of Labor reported that the consumer price index (CPI) — a key measure of inflation — rose 0.3% month-over-month in January, surpassing the consensus estimate of 0.2%. In December, CPI rose 0.2% month over month. However, CPI was up 3.1% in January compared with a 3.4% rise in December.
Core CPI (excluding the volatile food and energy items) increased 0.4% in January, beating the consensus estimate of 0.3%. In December too, core CPI increased 0.3%. Year over year, core CPI was up 3.9% in January, outpacing the consensus estimate of 3.7%. The year-over-year core CPI reading in December was also 3.9%, the lowest since May 2021.
This triggered an alarm among market participants and resulted in volatile trading. At present, the CME FedWatch tool shows a mere 8.5% probability that the central bank will initiate a 25-basis-point rate cut in its March FOMC meeting. The probability of the first rate cut was more than 90% at the beginning of 2024.
Moreover, 63.3% of market respondents currently expect the central bank to maintain the status quo of the benchmark lending rate at 5.25-5.5% even in the May FOMC meeting. However, an overwhelming 78% of respondents expect the first cut in the Fed fund rate in the June FOMC meeting.
As a result, few stocks have shown price strength. We have selected five stocks likely to gain in the near term on the back of a favorable Zacks Rank. These companies are — EZCORP Inc. (EZPW - Free Report) , Cimpress plc (CMPR - Free Report) , Griffon Corp. (GFF - Free Report) , Knife River Corp. (KNF - Free Report) and Modine Manufacturing Co. (MOD - 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 eight.
Let’s discuss five out of these eight stocks:
EZCORP is engaged in establishing, acquiring, and operating pawnshops that function as convenient sources of consumer credit and value-oriented specialty retailers of primarily previously owned merchandise.
Through its lending function, EZPW makes relatively small, non-recourse loans secured by pledges of tangible personal property. EZPW contracts for a pawn service charge to compensate it for each pawn loan.
The stock price of EZCORP has jumped 26.7% in the past four weeks. It has an expected earnings growth rate of 14.1% for the current year (ending September 2024). The Zacks Consensus Estimate for current-year earnings has improved 12.9% over the last 30 days.
Cimpress has benefited from strength across the Vista, National Pen and Upload & Print segments. CMPR’s Vista unit is being aided by an increase in the customer count along with the continued increase of revenue per customer. Significant growth in the e-commerce channel is driving the National Pen segment. An increasing order rate is aiding the National Pen segment.
CMPR’s investments in product innovation augur well for long-term growth. The company’s focus on cost-control measures is supporting its margin performance. Cimpress’ bullish guidance for fiscal 2024 holds promise. Also, CMPR’s business restructuring action is likely to improve customer value and operational efficiency over the long term.
The stock price of Cimpress has climbed 17.6% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the last 30 days.
Griffon is a diversified management and holding company conducting business through wholly-owned subsidiaries. GFF oversees the operations of its subsidiaries, allocates resources among them and manages their capital structures.
Griffon provides consumer and professional, and home and building products in the United States, Europe, Canada, Australia, and internationally. GFF offers direction and assistance to its regarding acquisition and growth opportunities and divestitures.
The stock price of Griffon has surged 16.7% in the past four weeks. It has an expected earnings growth rate of 5.7% for the current year (ending September 2024). The Zacks Consensus Estimate for current-year earnings has improved 3.9% over the last 30 days.
Knife River mines aggregates and markets crushed stone, sand, gravel and related construction materials, including ready-mix concrete, asphalt and other value-added products. KNF also distributes cement and asphalt oil. KNF performs integrated contracting services.
The stock price of Knife River has advanced 9.2% in the past four weeks. It has an expected earnings growth rate of 8.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.1% over the last 30 days.
Modine Manufacturing provides engineered heat-transfer systems and heat-transfer components for use in on- and off-highway original equipment manufacturer vehicular applications. MOD operates through the Climate Solutions and Performance Technologies segments.
The stock price of Modine Manufacturing has rallied 14.4% in the past four weeks. It has an expected earnings growth rate of 67.2% for the current year (ending March 2024). The Zacks Consensus Estimate for current-year earnings has improved 7.2% 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.