For immediate release
Chicago, IL – August 25, 2022 – The stocks in this week’s article are Tecnoglass TGLS, Clean Harbors CLH, Target Hospitality TH, Super Micro Computers SMCI and Murphy USA MUSA.
Own these 5 stocks to take advantage of their relative price
After a long two-month bull run, volatility has returned to the market. Wall Street closed lower for the third straight session on Tuesday as investors anticipated this week’s monetary policy symposium, which was to be held in Jackson Hole. Fed Chairman Jerome Powell should provide an important indication regarding the central bank’s stance on the economy. While no decision on raising interest rates will be made at the meeting, it will likely revolve around high inflation and slowing growth.
Going forward, trade should be choppy given the central bank’s aim to crush inflation and control expectations for future price gains. Risks from recession fears, geopolitical tensions and diminishing liquidity will also lead to a difficult road for equities.
In today’s choppy market environment, for investors who want to stay exposed to the stock pattern, it’s time to focus on the right investment opportunities. One of the ways to identify these potential plays is to look for signs of relative price strength.
Relative Price Strength Strategy
Investors typically gauge a stock’s potential returns by looking at earnings growth and valuation multiples. At the same time, it is essential to measure the performance of such a stock against its sector or peers, or against an appropriate benchmark. If you find that a stock is underperforming on fundamental factors, it would be prudent to move on and find a better alternative. However, those that outperform their respective sectors in terms of price should be selected as they have a better chance of providing considerable returns.
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 that outperform the S&P 500 for at least 1-3 months and have strong fundamentals indicate room for growth and are the best ways to implement this strategy.
Finally, it is crucial to know if analysts are optimistic about the future profits of these companies. To do this, we have added positive estimate revisions for current quarter (Q1) earnings to our screen. When a security undergoes an upward revision, it leads to additional price gains.
Here are five of the 30 stocks that crossed the screen:
Tecnoglass: The Colombian company produces, sells and installs architectural glass and related aluminum products for the residential construction markets. Founded in 1984, Tecnoglass has a VGM score of B.
For 2022, TGLS forecasts an earnings growth rate of 47.7%. Valued at around $1.2 billion, Tecnoglass shares have gained 8.6% in one year.
Clean ports: This is a well-known environmental services company that focuses on waste disposal and recycling. Clean Harbors has a VGM score of B. Over the past 30 days, Norwell, MA-based CLH has seen the Zacks Consensus Estimate for 2022 increase by 52.7%.
Clean Harbors has beaten the Zacks consensus estimate for earnings in each of the past four quarters, averaging 37.5%. Valued at around $6.2 billion, CLH has gained 15.8% in one year.
Target hospitality: The Woodlands, Texas-based company is a leading provider of remote rental specialty accommodation assets in the United States. Founded in 1978, Target Hospitality has a VGM score of B.
For 2022, TH forecasts a profit growth rate of 2,840%. Target Hospitality has beaten Zacks’ consensus estimate for earnings in three of the past four quarters. It has a surprise on earnings for the last four quarters of 135.3% on average. TH shares gained 330.4% in one year.
super microcomputer: Super Micro Computer offers state-of-the-art servers and storage systems covering artificial intelligence, cloud servers, IoT and 5G telecommunications infrastructure. The Zacks consensus estimate for the San Jose, Calif.-based company’s fiscal year 2023 points to earnings per share growth of 32.7% year-over-year. SMCI has a VGM score of B.
Super Micro Computer has beaten Zacks’ consensus estimate for earnings in each of the past four quarters. It has a surprise on earnings for the last four quarters of about 20.3% on average. SMCI shares gained 88.3% in one year.
United States: Murphy USA is one of the leading independent retailers of fuel and convenience products in the United States. The Zacks 2022 consensus estimate for the El Dorado, AR-based company points to earnings per share growth of 43.4% year-over-year. MUSA has a VGM score of B.
Murphy USA has beaten the Zacks consensus estimate for earnings in each of the past four quarters. It has a four-quarter earnings surprise of 49%, on average. MUSA shares have gained about 92.8% in one year.
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For the rest of this article on Screen of the Week, please visit Zacks.com at: https://www.zacks.com/stock/news/1971732/own-these-5-stocks-to-gain-from-their-relative-price-strength
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold securities short and/or hold long and/or short positions in the options mentioned herein. An affiliated investment adviser may hold or have shorted securities and/or hold long and/or short positions in options mentioned herein.
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Murphy USA Inc. (MUSA): Free Stock Analysis Report
Clean Harbors, Inc. (CLH): Free Stock Analysis Report
Super Micro Computer, Inc. (SMCI): Free Stock Analysis Report
Tecnoglass Inc. (TGLS): Free Stock Analysis Report
Target Hospitality Corp. (TH): Free Stock Analysis Report
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