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5 Stocks With Recent Price Strength That Have More Upside Left
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The 15-month bull run of U.S. stock markets suffered a surprise setback in April. We believe that April’s meltdown is nothing but a bull market correction and this time a welcome one as Wall Street has rebounded in May.
The Department of Labor reported that the U.S. economy added 175,000 jobs in April, missing the consensus estimate of 200,000. Job additions in March were revised upward by 12,000 while those in February were revised downward by 34,000.
The unemployment rate increased to 3.9% in April, compared with the consensus estimate and March’s data of 3.8%. April marked the highest level since January 2022.
Month over month, the average hourly earnings rate was 0.2% in April, compared with the consensus estimate and March’s data of 0.3%. Year over year, the wage rate increased 3.9% in April but came in below the consensus estimate of 4%.
The Department of Commerce reported that U.S. GDP grew at a 1.6% annualized rate in first-quarter 2024, well below the consensus estimate of 2.5%. The Department of Commerce reported that retail sales in April remained flat month over month. However, the consensus estimate was for an increase of 0.4%.
The manufacturing PMI of April came in at 49.2% and services PMI was 49.4%. Any reading below 50% indicates a contraction in activities. The manufacturing PMI expanded in March after 16 consecutive months of contraction. It again contracted in April. The services PMI contracted in April after 15 successive months of expansion.
As a result, a 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 — Sensus Healthcare Inc. (SRTS - Free Report) , Diebold Nixdorf Inc. (DBD - Free Report) , Adtalem Global Education Inc. (ATGE - Free Report) , Dycom Industries Inc. (DY - Free Report) and Superior Group of Companies Inc. (SGC - 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.
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 seven.
Let’s discuss five out of these seven stocks:
Sensus Healthcare is a medical device company that specializes in the treatment of non-melanoma skin cancers and other skin conditions, such as keloids, with superficial radiation therapy. SRTS’ portfolio of treatment devices consists of the SRT-100 and SRT-100 Vision.
The stock price of Sensus Healthcare has soared 79.9% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 30 days.
Diebold Nixdorf is engaged in the automating, digitizing and transforming the way people bank and shop. Its operating segments include Banking and Retail. DBD offers cash recyclers and dispensers, intelligent deposit terminals, teller automation tools and kiosk technologies, as well as physical security solutions and front-end applications for consumer connection points and back-end platforms.
The stock price of Diebold Nixdorf has jumped 36.8% in the past four weeks. DBD has an expected earnings growth rate of 3.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 47% over the last 30 days.
Adtalem Global Education has been benefiting on the back of solid enrollment growth and effective implementation of its cost-saving initiatives. ATGE’s Growth with Purpose strategy allowed it to expand access to high-quality, in-demand programs. Furthermore, strategic collaborations, and focus on innovation investments are encouraging.
Although soft enrollment trends in the Medical and Veterinary segments and increased expenses are concerning, ATGE once again raised its fiscal 2024 adjusted earnings and revenue outlook given the improving trend.
The stock price of Adtalem Global Education has climbed 31.3% in the past four weeks. It has an expected earnings growth rate of 16.4% for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the last 30 days.
Dycom Industries is seeing significant opportunities, as some major industry participants are deploying wireline networks to offer bandwidth-enabling 1-gigabit speeds using 5G technologies. Also, DY has been benefiting from continuous contract flow despite prevailing market uncertainties.
DY’s backlog at fiscal 2024-end totaled $6.917 billion, up from $6.141 billion in fiscal 2023 and sequentially from $6.613 billion. Although lower contributions from DY’s top five customers have put pressure on the top line, demand increased for all other customers, up 17.8% organically in fourth-quarter fiscal 2024.
The stock price of Dycom Industries has surged 25.3% in the past four weeks. It has an expected earnings growth rate of 4% for the current year (ending January 2025). The Zacks Consensus Estimate for current-year earnings has improved 6.7% over the last seven days.
Superior Group of Companies manufactures and sells apparel and accessories in the United States and internationally. SGC operates through three segments: Branded Products, Healthcare Apparel, and Contact Centers.
The stock price of Superior Group of Companies has advanced 14.6% in the past four weeks. SGC has an expected earnings growth rate of 38.9% for the current year. The Zacks Consensus Estimate for current-year earnings improved 17.2% 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 That Have More Upside Left
The 15-month bull run of U.S. stock markets suffered a surprise setback in April. We believe that April’s meltdown is nothing but a bull market correction and this time a welcome one as Wall Street has rebounded in May.
The Department of Labor reported that the U.S. economy added 175,000 jobs in April, missing the consensus estimate of 200,000. Job additions in March were revised upward by 12,000 while those in February were revised downward by 34,000.
The unemployment rate increased to 3.9% in April, compared with the consensus estimate and March’s data of 3.8%. April marked the highest level since January 2022.
Month over month, the average hourly earnings rate was 0.2% in April, compared with the consensus estimate and March’s data of 0.3%. Year over year, the wage rate increased 3.9% in April but came in below the consensus estimate of 4%.
The Department of Commerce reported that U.S. GDP grew at a 1.6% annualized rate in first-quarter 2024, well below the consensus estimate of 2.5%. The Department of Commerce reported that retail sales in April remained flat month over month. However, the consensus estimate was for an increase of 0.4%.
The manufacturing PMI of April came in at 49.2% and services PMI was 49.4%. Any reading below 50% indicates a contraction in activities. The manufacturing PMI expanded in March after 16 consecutive months of contraction. It again contracted in April. The services PMI contracted in April after 15 successive months of expansion.
As a result, a 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 — Sensus Healthcare Inc. (SRTS - Free Report) , Diebold Nixdorf Inc. (DBD - Free Report) , Adtalem Global Education Inc. (ATGE - Free Report) , Dycom Industries Inc. (DY - Free Report) and Superior Group of Companies Inc. (SGC - 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 seven.
Let’s discuss five out of these seven stocks:
Sensus Healthcare is a medical device company that specializes in the treatment of non-melanoma skin cancers and other skin conditions, such as keloids, with superficial radiation therapy. SRTS’ portfolio of treatment devices consists of the SRT-100 and SRT-100 Vision.
The stock price of Sensus Healthcare has soared 79.9% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the last 30 days.
Diebold Nixdorf is engaged in the automating, digitizing and transforming the way people bank and shop. Its operating segments include Banking and Retail. DBD offers cash recyclers and dispensers, intelligent deposit terminals, teller automation tools and kiosk technologies, as well as physical security solutions and front-end applications for consumer connection points and back-end platforms.
The stock price of Diebold Nixdorf has jumped 36.8% in the past four weeks. DBD has an expected earnings growth rate of 3.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 47% over the last 30 days.
Adtalem Global Education has been benefiting on the back of solid enrollment growth and effective implementation of its cost-saving initiatives. ATGE’s Growth with Purpose strategy allowed it to expand access to high-quality, in-demand programs. Furthermore, strategic collaborations, and focus on innovation investments are encouraging.
Although soft enrollment trends in the Medical and Veterinary segments and increased expenses are concerning, ATGE once again raised its fiscal 2024 adjusted earnings and revenue outlook given the improving trend.
The stock price of Adtalem Global Education has climbed 31.3% in the past four weeks. It has an expected earnings growth rate of 16.4% for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the last 30 days.
Dycom Industries is seeing significant opportunities, as some major industry participants are deploying wireline networks to offer bandwidth-enabling 1-gigabit speeds using 5G technologies. Also, DY has been benefiting from continuous contract flow despite prevailing market uncertainties.
DY’s backlog at fiscal 2024-end totaled $6.917 billion, up from $6.141 billion in fiscal 2023 and sequentially from $6.613 billion. Although lower contributions from DY’s top five customers have put pressure on the top line, demand increased for all other customers, up 17.8% organically in fourth-quarter fiscal 2024.
The stock price of Dycom Industries has surged 25.3% in the past four weeks. It has an expected earnings growth rate of 4% for the current year (ending January 2025). The Zacks Consensus Estimate for current-year earnings has improved 6.7% over the last seven days.
Superior Group of Companies manufactures and sells apparel and accessories in the United States and internationally. SGC operates through three segments: Branded Products, Healthcare Apparel, and Contact Centers.
The stock price of Superior Group of Companies has advanced 14.6% in the past four weeks. SGC has an expected earnings growth rate of 38.9% for the current year. The Zacks Consensus Estimate for current-year earnings improved 17.2% 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.