For Immediate Release
Chicago, IL – July 24, 2020 – Stocks in this week’s article are CoreLogic, Inc. CLGX, Lithia Motors, Inc. LAD, Bonanza Creek Energy, Inc. BCEI, Ashland Global Holdings Inc. ASH and Big Lots, Inc. BIG.
5 Stocks with Remarkable Relative Price Strength
The novel coronavirus outbreak triggered an unprecedented sell-off in equities and bonds. Stocks were clobbered, major indices crashed regularly, while in a bizarre turn of events U.S. oil futures hit negative territory.
However, over the past few months, markets, securities and crude have rebounded off their pandemic lows. Restrictions have been loosened and the economy reopened, with activity limping back toward normalcy. Meanwhile, certain drug candidates and treatments offer a ray of hope in the coronavirus fight.
While the heaviest losses may be in the rear view mirror, the road to recovery remains long and uncertain amid concerns about a second wave of the virus. As several U.S. states experience a spike in new coronavirus infections and hospitalization, there are apprehensions about another set of containment measures – already in place in certain regions – which might force many businesses to close again just after reopening. Moreover, efforts to combat the pandemic and policy initiatives to rev up economic activity have only had limited impact so far.
Amid the entire coronavirus-induced mayhem, there are few stocks that held up to the crisis even as the virus knocked down businesses and industries. With the market expected to remain volatile over the near-to-medium term, one of the ways such potential plays could be identified is to look for signs of relative price strength.
The 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 in 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 industries or benchmarks. 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 over a period of 1 to 3 months at the least and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.
Finally, it is important to find out whether analysts are optimistic about the upcoming earnings results 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.
For the rest of this Screen of the Week article please visit Zacks.com at:https://www.zacks.com/stock/news/1012363/here-are-5-stocks-with-remarkable-relative-price-strength
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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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 http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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