3 Stocks With Recent Price Strength Despite Market Turmoil

Wall Street has been rattled by severe volatility in the past two weeks as the coronavirus outbreak is showing no signs of slowing down. With market participants unable to estimate the extent and impact of the coronavirus outbreak, they have been selling off risky assets like equities out of panic. An unexpected crude oil price war between the OPEC and Russia-led consortium resulted in the collapse of the global financial markets.

Meanwhile, investors are aggressively shifting their funds from risky equities to safe-haven assets such as U.S. government bonds and precious metals like gold. As a result of massive fund shifting, prices of government bonds with different maturities have skyrocketed resulting in plunging yields. Gold prices have skyrocketed too.

At this stage, wouldn’t it be a safer strategy to look for stocks that are winners currently and have the potential to gain further?

Sounds good? Here’s how to execute it:

One should primarily target stocks that have recently been on a bull run. Actually, 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 else it would have probably crashed. So, looking at stocks that are capable of beating the benchmark that they have set for themselves seems rational.

However, recent price strength alone cannot create magic. Therefore, you need to set other relevant parameters 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 or 2: 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 or 2: 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 have narrowed down the search from over 7,700 stocks to just three.

Here we present those three stocks:

Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) is a biopharmaceutical company that discovers, invents, develops, manufactures and commercializes medicines for treating various medical conditions worldwide.

The stock price has jumped 22.9% in the past four weeks. The company has an expected earnings growth of 16.5% for the current year. The Zacks Consensus Estimate for the current year has improved 3.8% over the past 30 days.

DRDGOLD Ltd. (NYSE:DRD) is a gold mining company, engaged in surface gold tailings retreatment business in South Africa. The stock price has climbed 12.6% in the past four weeks. The company has an expected earnings growth rate of 562.5% for the current year (ending June 2020). The Zacks Consensus Estimate for the current year has improved 307.7% over the past 30 days.

Vipshop Holdings Ltd. (NYSE:VIPS) operates as an online discount retailer for various brands in the People's Republic of China. It operates in two segments, Vip.com and Internet Finance Business.The stock price has rallied 25% in the past four weeks. The company has an expected earnings growth rate of 9.4% for the current year (ending September 2020).

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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.

Regeneron Pharmaceuticals, Inc. (REGN): Free Stock Analysis Report

DRDGOLD Limited (DRD): Free Stock Analysis Report

Vipshop Holdings Limited (VIPS): Free Stock Analysis Report

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