Wall Street closed a fabulous October after a very disappointing September. The rally continues this month. We are not off the hook because inflation remains high. However, several recent data releases have clearly shown that inflation is declining, albeit at a slow pace.
On Nov. 10, the Department of Labor announced that the Consumer Price Index (CPI) in October rose 0.4% month-on-month and 7.7% year-on-year. the other. The consensus estimate called for a 0.5% month-over-month increase and a 7.9% year-over-year increase.
Core CPI (excluding volatile food and energy products) rose 0.3% month-over-month and 6.3% year-over-year. The consensus estimate was up 0.5% month-over-month and 6.5% year-over-year.
On November 15, the Department of Labor announced that the Producer Price Index (PPI) rose 0.2% in October compared to the consensus estimate of a 0.5% rise. September data was revised down from 0.4% to 0.2%.
Year over year, the PPI rose 8% from 8.4% in September. The core PPI rose 0.2% in October from the consensus estimate of 0.4%. Year-over-year, the core PPI rose 5.4% in October.
A gradual decline in the inflation rate should strengthen the ongoing recovery in US stock markets. As peak inflation seems behind us, the Fed is likely to ease its tighter monetary control.
A handful of stocks showed price strength. These stocks are likely to gain in the near term and are supported by a favorable Zacks ranking. Five of them are – Immunocore Holdings plc IMCR, Former second Bancorp Inc. OSBC, EDAP TMS SA EDAP, Barrett Business Services Inc. BSI and MainStreet Bancshares Inc. MNSB.
Here’s how we arrived at the choices
We mainly target stocks that have just risen. Stocks that have recently seen their prices appreciate are likely to continue their momentum.
If a stock is continuously witnessing an uptrend, there must be a solid reason otherwise it would likely have crashed. So, looking at stocks capable of beating the benchmark they set for themselves seems rational.
However, the recent strength in prices alone cannot create magic. Therefore, other relevant parameters are needed to create a successful investment strategy.
This is how you should create the screen to shortlist current winners as well as potential winners.
Screening Parameters:
Percentage change in price (4 weeks) greater than zero: This metric shows that the stock has risen over the past four weeks.
Percentage change price (12 weeks) greater than 10: This indicates that the stock has seen momentum over the past three months. This reduces the risk of picking stocks that might have attracted attention due to the overwhelming performance of the broader market in a very short period of time.
Zacks Rank 1: Regardless of whether market conditions are good or bad, stocks with a Zacks rank of #1 (Strong Buy) have a proven track record of outperforming. You can see the full list of today’s Zacks #1 Rank stocks here.
Broker 1 average rating: This indicates that brokers are also very optimistic about the future performance of the stock.
Current price above 5: The shares must all trade at a minimum of $5.
Current price/52 week high-low range greater than 85%: This criteria filters out stocks that are trading near their respective 52-week highs. This indicates that these are strong enough in terms of price.
These few criteria narrowed the search from more than 7,700 stocks to 13.
Let’s discuss five of these 13 actions:
Immunocore is a late-stage biotechnology company. IMCR is engaged in the development of a novel class of bispecific T cell receptor immunotherapies designed to treat diseases including cancer, infectious and autoimmune diseases.
Immunocore’s share price has jumped 26.8% in the past four weeks. IMCR forecasts a profit growth rate of 79% for the current year. The Zacks consensus estimate for current-year earnings has improved 29.6% over the past 30 days.
Former second Bancorp operates as a bank holding company for Old Second National Bank which provides community banking services. OSBC provides current, NOW, money market, savings, term deposit, individual retirement and checking accounts, as well as certificates of deposit accounts. Old Second Bancorp also offers commercial loans, lease financing receivables, commercial real estate loans, construction loans, residential real estate loans and signature loans.
OSBC’s stock price has climbed 21.3% over the past four weeks. Old Second Bancorp forecasts a profit growth rate of 15.4% for the current year. The Zacks consensus estimate for current-year earnings has improved 3.3% over the past 30 days.
SGT EDAP develops, produces, markets and distributes minimally invasive medical devices, primarily for the treatment of urological diseases. EDAP currently produces and markets devices for the treatment of benign prostatic hyperplasia and urinary calculi. EDAP TMS is also developing a third line of products for the minimally invasive destruction of certain types of tumours.
EDAP TMS stock price has jumped 18.4% in the past four weeks. EDAP has an expected earnings growth rate of over 100% for the current year. Zacks’ consensus estimate for current-year earnings has improved more than 100% in the past seven days.
Barrett Business Services provides light industrial, clerical and technical employees to a wide range of businesses through staff leasing, contract staffing, site management and temporary staffing. BBSI provides employees to a diverse set of customers, including forestry and agricultural products companies, electronics manufacturers, transportation and shipping companies, professional companies and general contractors.
Barrett Business Services’ stock price is up 16.5% in the past four weeks. BBSI forecasts a profit growth rate of 31% for the current year. The Zacks consensus estimate for current-year earnings has improved 4% over the past 30 days.
MainStreet Bancshares operates as a bank holding company for MainStreet Bank which provides various banking products and services to individuals, small and medium businesses and professional services organizations.
MNSB offers current, money market, savings, and debit accounts, as well as certificates of deposit, business and consumer checks, interest-bearing checks, business account analytics, and more. deposit services, as well as cash management, wire transfer, check imaging, remote monitoring. deposit collection and courier services.
MainStreet Bancshares’ share price has appreciated 15.8% over the past four weeks. MNSB forecasts a 17% profit growth rate for the current year. The Zacks consensus estimate for current-year earnings has improved 3% over the past 30 days.
You can get the rest of the stocks on this list by signing up for your free 2-week trial to Research Assistant now and start using this screen in your own trading. Moreover, you can also create your own strategies and test them before diving into investing.
The research assistant is a great starting point. It’s easy to use. Everything is in plain language. And it’s very intuitive. Start your search assistant trial today. And the next time you’re reading an economic report, open up the research assistant, plug in your findings, and see what gems come out.
Click here to sign up for a free trial of Research Assistant today.
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 advisory firm may hold or have shorted securities and/or hold long and/or short positions in options mentioned herein.
Disclosure: Information on the performance of Zacks portfolios and strategies is available at: https://www.zacks.com/performance.
Zacks names ‘only one best choice for doubling up’
From thousands of stocks, 5 Zacks experts have each picked their favorite to skyrocket by +100% or more in the coming months. Of these 5, Research Director Sheraz Mian selects one to have the most explosive advantage of all.
It’s a little-known chemical company that’s up 65% year-on-year, but still very cheap. With relentless demand, rising earnings estimates for 2022 and $1.5 billion for stock buybacks, retail investors could step in at any time.
This company could rival or surpass other recent Zacks stocks that are expected to double, such as Boston Beer Company which jumped +143.0% in just over 9 months and NVIDIA which jumped +175.9% in one. year.
Free: See our best stock and our 4 finalists >>
EDAP TMS SA (EDAP): Free Stock Analysis Report
Old Second Bancorp, Inc. (OSBC): Free Stock Analysis Report
Barrett Business Services, Inc. (BBSI): Free Stock Analysis Report
MainStreet Bank (MNSB): Free Stock Analysis Report
Immunocore Holdings PLC (IMCR) Sponsored ADR: Free Stock Analysis Report
To read this article on Zacks.com, click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Comments are closed.