5 Stocks In Limelight On Explosive Relative Price Strength

Investors generally gauge a stock’s potential return by examining earnings growth and valuation multiples. At the same time, it’s important to measure the performance of such a stock relative to its industry or peers, or the appropriate benchmark.

If you see that a stock is underperforming on fundamental factors, then it would be prudent to move on and find a better alternative. However, those outperforming their respective sectors in terms of price should be selected because they stand a better chance to provide considerable returns.

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.

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, 4 weeks and 1 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 (Strong Buy) 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 5 of the 8 stocks that made it through the screen:

The Children's Place Inc. (NASDAQ:PLCE) : Headquartered in Secaucus, NJ, The Children’s Place is a leading North American specialty retailer of apparel and accessories for children from newborn to 14 years of age. The company has a VGM score of “A” and an excellent earnings surprise history. It surpassed estimates in each of the last four quarters at an average rate of 39.04%.

Aegean Marine Petroleum Network Inc. (NYSE:ANW) : A marine fuel logistics company that physically supplies and markets refined marine fuel and lubricants to ships in port and at sea, Athens, Greece-based Aegean Marine Petroleum Network has a VGM score of “A”. Over the past 30 days, the Zacks Consensus Estimate for fiscal years 2017 and 2018 increased 6% and 12%, to $1.64 and $1.87 per share, respectively.

Entegris Inc. (NASDAQ:ENTG) : Entegris is one of the leading providers of contamination control and carrier solutions. Headquartered in Billerica, MA, the company specializes in products for processing and manufacturing in semiconductor and other sophisticated industries. Entegris has a VGM score of “B” and outperformed/met earnings estimates in all the last 4 reported quarters.

Tech Data Corp. (NASDAQ:TECD) : Tech Data is one of the leading wholesale distributors of information technology (IT) products, logistics management and other value-added services. Sporting a VGM score of “A”, this Clearwater, FL-headquartered company’s expected EPS growth rate for 3 to 5 years currently stands at 22.80% –– comparing favorably with the industry growth rate of 14.90%.

BMC Stock Holdings Inc. (NASDAQ:BMCH) : Headquartered in Atlanta, GA, BMC Stock Holdings is a leading distributor of diversified lumber and building materials to U.S. builders and contractors. The 2017 Zacks Consensus Estimate for this company is $1.33, representing some 53% earnings per share growth over 2016. Next year’s average forecast is $1.63, pointing to 23% growth. BMC Stock Holdings has a VGM score of “A”.

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.

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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.

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