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4 Top-Ranked Stocks Showing Signs of Relative Price Strength
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U.S. stock markets have continued their upward trajectory into the first half of 2024, building on a remarkable 2023. The S&P 500 has seen an impressive gain of 15.4% year to date and more than 1% in June itself. On Thursday, the benchmark crossed a historic milestone, breaching the 5,500 mark for the first time and reaching an all-time high of 5,505.35. As a matter of fact, the S&P 500 Index has achieved 32 record highs this year alone.
Recent months have shown favorable inflation data, indicating that peak inflation is behind us, while the labor market remains strong. Additionally, the global supply chain is gradually improving as U.S. corporations adapt and reschedule around China. Despite high inflation and interest rates, the fundamentals of the U.S. economy remain robust.
In a post-FOMC meeting statement on Jun 12, Fed Chairman Jerome Powell hinted at a potential 25-basis-point rate cut this year, with a full 1% reduction in 2025. This optimistic outlook makes relative price strength a compelling tool for investment, leveraging market momentum and economic resilience to drive potential gains.
Relative Price Strength Strategy
Whether a stock has the potential to offer considerable returns is determined primarily by its earnings and valuation ratios. Simultaneously, it is essential to check whether its price performance exceeds its peers or the industry average.
Upon such comparison, if we find that a stock is unable to match up to wider sectoral growth despite having impressive earnings momentum or valuation multiples, it may be better to avoid it.
However, those outperforming their respective industries or benchmarks should be included in your portfolio since they have a higher chance of securing significant returns. Picking a stock that outperforms its peers ensures a winning option on your hands.
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 the four stocks that made it through the screen:
Chewy, Inc. (CHWY - Free Report) : The company is an online seller of pet products and services in the United States and Canada. The Zacks Consensus Estimate for fiscal 2025 earnings of Chewy indicates 37.7% growth. Headquartered in Plantation, FL, CHWY has a VGM Score of B.
Over the past 60 days, the Zacks Consensus Estimate for fiscal 2025 earnings has moved up 14.5%. Chewy has a trailing four-quarter earnings surprise of roughly 57.7%, on average. CHWY shares have decreased 33% in a year.
Skechers USA, Inc. (SKX - Free Report) : Skechers designs, develops, markets, and distributes footwear for men, women, and children in the United States and overseas. The 2024 Zacks Consensus Estimate for this Manhattan Beach, CA-based firm indicates 16.9% year-over-year earnings per share growth. SKX has a VGM Score of B.
Skechers beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 34.1%, on average. SKX shares have gained 44.4% in a year.
Brinker International (EAT - Free Report) : Based in Dallas, TX, the company owns, operates and franchises over 1,600 restaurants globally under the Chili's Grill & Bar and Maggiano's Little Italy brands, with a growing international presence. EAT’s expected EPS growth rate for three to five years is currently 20.6%, which compares favorably with the industry's growth rate of 14.3%. The company has a VGM Score of A.
Notably, the Zacks Consensus Estimate for Brinker International’s fiscal 2024 earnings per share indicates 41.3% year-over-year growth. It beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 213.4%. EAT shares have gone up 106.7% in a year.
GeoPark Limited (GPRK - Free Report) : Based in Colombia, the oil and gas explorer and producer has operations across Latin America. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved up 2.9%. GPRK has a VGM Score of A.
Notably, the Zacks Consensus Estimate for GeoPark’s 2024 earnings per share indicates 50.9% year-over-year growth. The firm has a market capitalization of $594.2 billion. GPRK shares have gone up 14.5% in a year.
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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4 Top-Ranked Stocks Showing Signs of Relative Price Strength
U.S. stock markets have continued their upward trajectory into the first half of 2024, building on a remarkable 2023. The S&P 500 has seen an impressive gain of 15.4% year to date and more than 1% in June itself. On Thursday, the benchmark crossed a historic milestone, breaching the 5,500 mark for the first time and reaching an all-time high of 5,505.35. As a matter of fact, the S&P 500 Index has achieved 32 record highs this year alone.
Recent months have shown favorable inflation data, indicating that peak inflation is behind us, while the labor market remains strong. Additionally, the global supply chain is gradually improving as U.S. corporations adapt and reschedule around China. Despite high inflation and interest rates, the fundamentals of the U.S. economy remain robust.
In a post-FOMC meeting statement on Jun 12, Fed Chairman Jerome Powell hinted at a potential 25-basis-point rate cut this year, with a full 1% reduction in 2025. This optimistic outlook makes relative price strength a compelling tool for investment, leveraging market momentum and economic resilience to drive potential gains.
Relative Price Strength Strategy
Whether a stock has the potential to offer considerable returns is determined primarily by its earnings and valuation ratios. Simultaneously, it is essential to check whether its price performance exceeds its peers or the industry average.
Upon such comparison, if we find that a stock is unable to match up to wider sectoral growth despite having impressive earnings momentum or valuation multiples, it may be better to avoid it.
However, those outperforming their respective industries or benchmarks should be included in your portfolio since they have a higher chance of securing significant returns. Picking a stock that outperforms its peers ensures a winning option on your hands.
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 the four stocks that made it through the screen:
Chewy, Inc. (CHWY - Free Report) : The company is an online seller of pet products and services in the United States and Canada. The Zacks Consensus Estimate for fiscal 2025 earnings of Chewy indicates 37.7% growth. Headquartered in Plantation, FL, CHWY has a VGM Score of B.
Over the past 60 days, the Zacks Consensus Estimate for fiscal 2025 earnings has moved up 14.5%. Chewy has a trailing four-quarter earnings surprise of roughly 57.7%, on average. CHWY shares have decreased 33% in a year.
Skechers USA, Inc. (SKX - Free Report) : Skechers designs, develops, markets, and distributes footwear for men, women, and children in the United States and overseas. The 2024 Zacks Consensus Estimate for this Manhattan Beach, CA-based firm indicates 16.9% year-over-year earnings per share growth. SKX has a VGM Score of B.
Skechers beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 34.1%, on average. SKX shares have gained 44.4% in a year.
Brinker International (EAT - Free Report) : Based in Dallas, TX, the company owns, operates and franchises over 1,600 restaurants globally under the Chili's Grill & Bar and Maggiano's Little Italy brands, with a growing international presence. EAT’s expected EPS growth rate for three to five years is currently 20.6%, which compares favorably with the industry's growth rate of 14.3%. The company has a VGM Score of A.
Notably, the Zacks Consensus Estimate for Brinker International’s fiscal 2024 earnings per share indicates 41.3% year-over-year growth. It beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 213.4%. EAT shares have gone up 106.7% in a year.
GeoPark Limited (GPRK - Free Report) : Based in Colombia, the oil and gas explorer and producer has operations across Latin America. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved up 2.9%. GPRK has a VGM Score of A.
Notably, the Zacks Consensus Estimate for GeoPark’s 2024 earnings per share indicates 50.9% year-over-year growth. The firm has a market capitalization of $594.2 billion. GPRK shares have gone up 14.5% in a year.
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.