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5 Phenomenal Relative Price Strength Stocks to Snap Up Now
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The U.S. economy has demonstrated remarkable resilience despite interest rates reaching a 23-year high. In May, Wall Street saw a rebound, with the S&P 500 rising by 4.8%.
However, the economy is cooling. The Department of Commerce revised the first-quarter 2024 GDP growth rate down to 1.3% from the previously reported 1.6%, a significant slowdown from the 3.4% growth rate in the fourth quarter of 2023. This is the lowest quarterly GDP growth rate since the second quarter of 2022.
In light of these indicators, astute investors are now focusing on relative price performance, strategically identifying and investing in opportunities for accelerated returns.
Relative Price Strength Strategy
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 five of the nine stocks that made it through the screen:
Vital Farms (VITL - Free Report) : The company collaborates with family farms and specializes in the distribution of pasture-raised eggs, butter and other related products across the United States. The Zacks Consensus Estimate for 2024 earnings of Vital Farms indicates 59.3% growth. Headquartered in Austin, TX, VITL has a VGM Score of B.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved up 17.5%. Vital Farms has a trailing four-quarter earnings surprise of roughly 102.1%, on average. VITL shares have increased 207% in a year.
Hims & Hers Health, Inc. (HIMS - Free Report) : The company is a telehealth platform that offers consumers convenient, accessible, and affordable access to high-quality medical care. Over the past 60 days, this San Francisco, CA-based firm saw the Zacks Consensus Estimate for 2024 move up 80%. HIMS has a VGM Score of B.
The Zacks Consensus Estimate for 2024 earnings of Hims & Hers Health indicates 263.6% growth. The company has a trailing four-quarter earnings surprise of roughly 79.2%, on average. HIMS shares have surged 143% in a year.
Abercrombie & Fitch Co. (ANF - Free Report) : Based in New Albany, OH, Abercrombie & Fitch operates as a specialty retailer of premium, high-quality casual apparel for men, women and kids. Over the past 60 days, this firm saw the Zacks Consensus Estimate for fiscal 2025 move up 34.5%. ANF has a VGM Score of A.
The fiscal 2025 Zacks Consensus Estimate for Abercrombie & Fitch indicates 47.5% year-over-year earnings per share growth. It has a trailing four-quarter earnings surprise of roughly 210.3% on average. ANF shares have gained 446.5% in a year.
Chewy, Inc. (CHWY - Free Report) : Based in Plantation, FL, the company is an online seller of pet products and services in the United States and Canada. CHWY’s expected EPS growth rate for three to five years is currently 29.7%, which compares favorably with the industry's growth rate of 15.9%. The company has a VGM Score of B.
Notably, the Zacks Consensus Estimate for Chewy’s fiscal 2025 earnings per share indicates 14.5% year-over-year growth. The firm has a market capitalization of $9.7 billion. CHWY shares have gone down 38.6% in a year.
The Gap Inc. (GPS - Free Report) : Based in San Francisco, CA, it is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products. Over the past 60 days, the Zacks Consensus Estimate for fiscal 2025 earnings has moved up 23.5%. GPS has a VGM Score of A.
The Gap beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 202.7%, on average. GPS shares have gained 210.4% 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 Phenomenal Relative Price Strength Stocks to Snap Up Now
The U.S. economy has demonstrated remarkable resilience despite interest rates reaching a 23-year high. In May, Wall Street saw a rebound, with the S&P 500 rising by 4.8%.
However, the economy is cooling. The Department of Commerce revised the first-quarter 2024 GDP growth rate down to 1.3% from the previously reported 1.6%, a significant slowdown from the 3.4% growth rate in the fourth quarter of 2023. This is the lowest quarterly GDP growth rate since the second quarter of 2022.
In light of these indicators, astute investors are now focusing on relative price performance, strategically identifying and investing in opportunities for accelerated returns.
Relative Price Strength Strategy
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 five of the nine stocks that made it through the screen:
Vital Farms (VITL - Free Report) : The company collaborates with family farms and specializes in the distribution of pasture-raised eggs, butter and other related products across the United States. The Zacks Consensus Estimate for 2024 earnings of Vital Farms indicates 59.3% growth. Headquartered in Austin, TX, VITL has a VGM Score of B.
Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved up 17.5%. Vital Farms has a trailing four-quarter earnings surprise of roughly 102.1%, on average. VITL shares have increased 207% in a year.
Hims & Hers Health, Inc. (HIMS - Free Report) : The company is a telehealth platform that offers consumers convenient, accessible, and affordable access to high-quality medical care. Over the past 60 days, this San Francisco, CA-based firm saw the Zacks Consensus Estimate for 2024 move up 80%. HIMS has a VGM Score of B.
The Zacks Consensus Estimate for 2024 earnings of Hims & Hers Health indicates 263.6% growth. The company has a trailing four-quarter earnings surprise of roughly 79.2%, on average. HIMS shares have surged 143% in a year.
Abercrombie & Fitch Co. (ANF - Free Report) : Based in New Albany, OH, Abercrombie & Fitch operates as a specialty retailer of premium, high-quality casual apparel for men, women and kids. Over the past 60 days, this firm saw the Zacks Consensus Estimate for fiscal 2025 move up 34.5%. ANF has a VGM Score of A.
The fiscal 2025 Zacks Consensus Estimate for Abercrombie & Fitch indicates 47.5% year-over-year earnings per share growth. It has a trailing four-quarter earnings surprise of roughly 210.3% on average. ANF shares have gained 446.5% in a year.
Chewy, Inc. (CHWY - Free Report) : Based in Plantation, FL, the company is an online seller of pet products and services in the United States and Canada. CHWY’s expected EPS growth rate for three to five years is currently 29.7%, which compares favorably with the industry's growth rate of 15.9%. The company has a VGM Score of B.
Notably, the Zacks Consensus Estimate for Chewy’s fiscal 2025 earnings per share indicates 14.5% year-over-year growth. The firm has a market capitalization of $9.7 billion. CHWY shares have gone down 38.6% in a year.
The Gap Inc. (GPS - Free Report) : Based in San Francisco, CA, it is a premier international specialty retailer offering a diverse range of clothing, accessories, and personal care products. Over the past 60 days, the Zacks Consensus Estimate for fiscal 2025 earnings has moved up 23.5%. GPS has a VGM Score of A.
The Gap beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 202.7%, on average. GPS shares have gained 210.4% 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.