This story originally appeared on Zacks
Whether a stock has the potential to deliver significant returns is primarily determined by its earnings and valuation ratios. At the same time, it is essential to check whether your price performance outperforms your peers or the industry average.
Upon such comparison, if we find that a stock cannot match the broader industry growth despite having impressive earnings momentum or valuation multiples, it may be best avoided.
However, those that outperform their respective industries or benchmarks should be included in your portfolio as they have a higher probability of making significant returns. Choosing a stock that outperforms your competitors ensures that you have a winning option on your hands.
On the other hand, it is imperative that you determine whether an investment has relevant upside potential by 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 carry out this strategy.
Finally, it is important to find out if analysts are optimistic about the upcoming earnings of these companies. To do this, we have added positive estimate revisions for current quarter (Q1) earnings to our screen. When a stock undergoes an upward revision, it leads to additional price gains.
Relative% of price change – 12 weeks greater than 0
Relative% of price change: 4 weeks greater than 0
Relative% of price change – 1 week greater than 0
(We have considered those stocks that have outperformed the S&P 500 over the past 12 weeks, four weeks, and one week.)
% Change (Q1) Est. For 4 weeks more than 0: Positive revisions to current quarter estimates over the past four weeks.
Zacks Rank Equal to 1: Only Zacks Rank # 1 (Strong Buy) stocks, which have returned more than 26% annually for the past 26 years and topped the S&P 500 in 23 of the past 26 years, can pass. You can see Today’s full list of Zacks # 1 rank stocks here.
Current Price greater than or equal to $ 5 and 20-day Average Volume greater than or equal to 50,000: A minimum price of $ 5 is a good standard for selecting 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 n rank. 1 or 2 (buy) offer the best upside potential.
Here are five of the 10 actions that went through the screen:
Guess ?, Inc. GES: Founded in 1981 and based in Los Angeles, CA, Guess? designs, markets, distributes and licenses casual clothing and accessories for men, women and children. Guess? has a VGM score of A.
In particular, guess what? has an excellent track record of surprise earnings. GES beat the Zacks consensus estimate for earnings in each of the past four quarters, which came in a 97% surprise, on average. The company’s shares have soared about 30.5% in one year.
Bluegreen Vacations Holding Corporation BVH: The company markets vacation ownership interests and manages resorts in popular destinations. Bluegreen Vacations has a VGM score of A. Over the past 60 days, Boca Raton, FL-based BVH saw the Zacks Consensus Estimate for 2021 go up 28.4%.
Bluegreen Vacations has a projected earnings growth rate of 199.3% for the current year. The company beat the Zacks consensus estimate for earnings in each of the four subsequent quarters, averaging 695%. BCH has recovered about 144.8% in one year.
Titan Machinery Inc. TITN: Titan Machinery is a retailer of agricultural and construction equipment in the United States and Europe. The Zacks Fiscal 2022 Consensus Estimate for this West Fargo, ND-based company indicates earnings per share growth of 103.2% during 2021. TITN has a VGM score of A.
Titan Machinery beat the Zacks consensus estimate for earnings in each of the past four quarters. It has a surprise earnings in the four quarters of about 93.3%, on average. TTIN shares have gained around 77.4% in one year.
AutoZone, Inc. AZO: AutoZone is one of the leading specialty auto parts and accessories retailers and distributors in the United States. The Zacks Fiscal 2022 Consensus Estimate for this Memphis, TN-based company indicates earnings per share growth of 2.9% during 2021. AZO has a VGM score of B.
AutoZone beat the Zacks Consensus Estimate for earnings in each of the past four quarters. It has a surprise earnings in the four quarters of about 23.2%, on average. AZO shares have gained about 70.1% in one year.
United Natural Foods, Inc. UNFI – This Providence, Rhode Island-based company is a leading distributor of natural, organic and specialty food and non-food products in the United States and Canada. United Natural Foods has a VGM score of B.
United Natural Foods has a projected earnings growth rate of 5.2% for the current fiscal year. The company beat the Zacks consensus estimate for earnings in each of the four subsequent quarters, averaging 35.4%. UNFI shares have gained around 247.5% in one year.
You can get the rest of the stocks on this list by registering now for your 2-week free trial in the Research Assistant and start using this screen in your own trades. In addition, you can also create your own strategies and test them before investing.
The Research Assistant is a great place to start. It’s easy to use. Everything is in plain language. And it is very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open the Research Assistant, plug in your findings, and see what gems come out.
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Disclosure: Zacks Investment Research officers, directors, and / or employees may own or have sold short securities and / or hold long and / or short positions in the options discussed in this material. An affiliated investment advisory firm may own or have sold short securities and / or hold long and / or short positions in the options mentioned in this material.
Disclosure: Information on the performance of Zacks’ portfolios and strategies is available at: https://www.zacks.com/performance.
5 actions configured to duplicate
Each was selected by a Zacks expert as the # 1 favorite stock to win + 100% or more in 2021. Previous recommendations have skyrocketed + 143.0%, + 175.9%, + 498.3%, and + 673.0%.
Most of the stocks in this report are flying under the Wall Street radar, providing a great opportunity to break into the ground floor.
Today, check out these 5 possible home runs >>
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AutoZone, Inc. (AZO): Free Stock Analysis Report
Guess, Inc. (GES): Free Stock Analysis Report
Titan Machinery Inc. (TITN): Free Stock Analysis Report
United Natural Foods, Inc. (UNFI): Free Stock Analysis Report
Bluegreen Vacations Holding Corporation (BVH): Free Stock Analysis Report
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