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5 Relative Price Strength Stocks to Manage Market Volatility
Recent market sell-offs have been driven by a confluence of factors, contributing to the ongoing pullback and correction in major indexes. Investors are grappling with concerns over an economic slowdown and recession spurred by disappointing economic indicators.
The recent weak jobs data for July, along with lower-than-expected job additions and a rise in the unemployment rate, have cast a shadow over the U.S. economy's prospects. This has intensified fears about the Federal Reserve's ability to achieve a "soft landing" and has raised concerns that the central bank may be lagging in its response to economic challenges.
In addition to domestic economic worries, geopolitical tensions are playing a significant role in the market rout. The unresolved conflict between Ukraine and Russia continues to weigh on global sentiment while escalating tensions between Israel and Iran add to the uncertainty. Furthermore, political instability in Bangladesh has flared up volatility.
As markets continue to struggle with this uncertainty, investors are reassessing their positions and strategies. In such a tumultuous period, using a "relative price strength" strategy can be advantageous. This approach involves identifying stocks that are outperforming their peers despite the broader market weakness, helping investors find opportunities amid the volatility.
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.
Here are five of the 19 stocks that made it through the screen:
Spotify Technology S.A.: Based in Luxembourg City, the company is an audio streaming service platform. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved up 27.5%. SPOT has a VGM Score of B.
Notably, the Zacks Consensus Estimate for Spotify’s 2024 earnings per share indicates 314.2% year-over-year growth. The firm has a market capitalization of $64.4 billion. SPOT shares have surged 143.2% in a year.
Interface, Inc.: The company is a specialized operator in carpet tile and flooring. The Zacks Consensus Estimate for 2024 earnings of Interface indicates 28% growth. Headquartered in Atlanta, GA, TILE has a VGM Score of A.
The firm has a market capitalization of $946.5 million. Interface beat the Zacks Consensus Estimate for earnings in each of the last four quarters and has a trailing four-quarter earnings surprise of roughly 65%, on average. TILE shares have gained 58.8% in a year.
Tenet Healthcare Corporation: Based in Dallas, TX, the company offers healthcare services through its general hospitals and related facilities. THC’s expected EPS growth rate for three to five years is currently 18.3%, which compares favorably with the industry's growth rate of 14.7%. The company has a VGM Score of A.
Notably, over the past 60 days, the Zacks Consensus Estimate for Tenet Healthcare’s 2024 earnings has moved up 16.6%. It beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 58.5%. THC shares have gone up 105.1% in a year.
Dorman Products: Dorman Products is a provider and supplier of motor vehicle aftermarket parts. The 2024 Zacks Consensus Estimate for this Colmar, PA-based firm indicates 35.5% year-over-year earnings per share growth. DORM has a VGM Score of B.
Dorman Products beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of roughly 24.7%, on average. DORM shares have increased 21.1% in a year.
Matson, Inc.: Based in Honolulu, HI, the company is a leading shipping and logistics firm. MATX’s current market capitalization is $4.3 billion. The company has a VGM Score of A.
Notably, over the past 60 days, the Zacks Consensus Estimate for Matson’s 2024 earnings has moved up 18.5%. It beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 4.1%. MATX shares have gone up 37.4% 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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
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Zacks.com featured highlights include Spotify, Interface, Tenet Healthcare, Dorman and Matson
For Immediate Release
Chicago, IL – August 12, 2024 – Stocks in this week’s article are Spotify Technology S.A. (SPOT - Free Report) , Interface, Inc. (TILE - Free Report) , Tenet Healthcare Corporation (THC - Free Report) , Dorman Products (DORM - Free Report) and Matson, Inc. (MATX - Free Report) .
5 Relative Price Strength Stocks to Manage Market Volatility
Recent market sell-offs have been driven by a confluence of factors, contributing to the ongoing pullback and correction in major indexes. Investors are grappling with concerns over an economic slowdown and recession spurred by disappointing economic indicators.
The recent weak jobs data for July, along with lower-than-expected job additions and a rise in the unemployment rate, have cast a shadow over the U.S. economy's prospects. This has intensified fears about the Federal Reserve's ability to achieve a "soft landing" and has raised concerns that the central bank may be lagging in its response to economic challenges.
In addition to domestic economic worries, geopolitical tensions are playing a significant role in the market rout. The unresolved conflict between Ukraine and Russia continues to weigh on global sentiment while escalating tensions between Israel and Iran add to the uncertainty. Furthermore, political instability in Bangladesh has flared up volatility.
As markets continue to struggle with this uncertainty, investors are reassessing their positions and strategies. In such a tumultuous period, using a "relative price strength" strategy can be advantageous. This approach involves identifying stocks that are outperforming their peers despite the broader market weakness, helping investors find opportunities amid the volatility.
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.
Here are five of the 19 stocks that made it through the screen:
Spotify Technology S.A.: Based in Luxembourg City, the company is an audio streaming service platform. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has moved up 27.5%. SPOT has a VGM Score of B.
Notably, the Zacks Consensus Estimate for Spotify’s 2024 earnings per share indicates 314.2% year-over-year growth. The firm has a market capitalization of $64.4 billion. SPOT shares have surged 143.2% in a year.
Interface, Inc.: The company is a specialized operator in carpet tile and flooring. The Zacks Consensus Estimate for 2024 earnings of Interface indicates 28% growth. Headquartered in Atlanta, GA, TILE has a VGM Score of A.
The firm has a market capitalization of $946.5 million. Interface beat the Zacks Consensus Estimate for earnings in each of the last four quarters and has a trailing four-quarter earnings surprise of roughly 65%, on average. TILE shares have gained 58.8% in a year.
Tenet Healthcare Corporation: Based in Dallas, TX, the company offers healthcare services through its general hospitals and related facilities. THC’s expected EPS growth rate for three to five years is currently 18.3%, which compares favorably with the industry's growth rate of 14.7%. The company has a VGM Score of A.
Notably, over the past 60 days, the Zacks Consensus Estimate for Tenet Healthcare’s 2024 earnings has moved up 16.6%. It beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 58.5%. THC shares have gone up 105.1% in a year.
Dorman Products: Dorman Products is a provider and supplier of motor vehicle aftermarket parts. The 2024 Zacks Consensus Estimate for this Colmar, PA-based firm indicates 35.5% year-over-year earnings per share growth. DORM has a VGM Score of B.
Dorman Products beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other. It has a trailing four-quarter earnings surprise of roughly 24.7%, on average. DORM shares have increased 21.1% in a year.
Matson, Inc.: Based in Honolulu, HI, the company is a leading shipping and logistics firm. MATX’s current market capitalization is $4.3 billion. The company has a VGM Score of A.
Notably, over the past 60 days, the Zacks Consensus Estimate for Matson’s 2024 earnings has moved up 18.5%. It beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 4.1%. MATX shares have gone up 37.4% 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
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2319813/5-relative-price-strength-stocks-to-manage-market-volatility
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Follow us on Twitter: https://www.twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.