Markets

7 Stocks with Recent Price Strength to Boost Your Portfolio

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Investors always seek a winning strategy. However, finding such a strategy is easier said than done. When markets are shaken by widespread global growth concerns, it is difficult for even an insightful investor to come up with a foolproof approach.

No matter how disciplined and systematic investors are, equity market volatility will always manage to get the better of them. While a few lucky ones rake in the moolah, others fall victim to ad hoc strategies.

One could resort to commonly used techniques to find beaten down stocks that have the potential to recover faster than others. However, even such investment choices bear the risk of disappointment. Particularly, one could be stuck in a value trap if the hidden weaknesses in selected stock are not identified.

So, wouldn't it be safer to look for stocks that are winners currently and have the potential to gain further?

Here's how to execute it:

One should primarily look for stocks that have recently been witnessing price increase. Actually, stocks seeing price strength recently have a high chance of carrying the momentum forward.

If a stock is continuously moving higher, there must be a good reason for the rise or else it probably would have fallen like the losers. So, looking at stocks that have already won the game and are capable of beating the benchmark that they have set is rational.

However, recent price strength alone cannot create magic, so 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: 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: 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.

Here are seven of the 15 stocks that made it through this screen:

Johnson Outdoors Inc.JOUT is a leading global outdoor recreation company that turns ideas into adventure with innovative, top-quality products. In the last four quarters, the stock surpassed the Zacks Consensus Estimate thrice while missing the same on one occasion.

Align Technology Inc.ALGN designs, manufactures and markets the Invisalign System, a proprietary method for treating malocclusion. The company has surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while matching the same on one occasion. It delivered an average positive surprise of 16.7%.

Orthofix International N.V.OFIX is a leading provider of high-value, minimally invasive medical devices for the orthopedic and trauma markets. The stock has a decent earnings surprise history having beaten the Zacks Consensus Estimate twice while matching the same on two occasions in the trailing four quarters. It came up with an average positive earnings surprise of 4.1%.

Columbus McKinnon Corp.CMCO is a broad-line designer, manufacturer and supplier of sophisticated material handling products and integrated material handling solutions that are widely distributed to industrial and consumer markets worldwide. The stock has a mixed earnings surprise history. It beat the Zacks Consensus Estimate twice in the trailing four quarters while missing the same twice. However, it still delivered a positive earnings surprise of 10.7%.

Kadant Inc.KAI is a leading supplier of a range of products and systems for the global papermaking and paper-recycling industries, including de-inking systems, stock-preparation equipment, water-management systems, and papermaking accessories. The company has surpassed the Zacks Consensus Estimate in the trailing four quarters with an average positive earnings surprise of 19.3%.

Sun Hydraulics CorporationSNHY is a leading designer and manufacturer of high-performance, screw-in hydraulic cartridge valves and manifolds, which control force, speed and motion as integral components in fluid power systems. The stock has a mixed earnings surprise history. It beat the Zacks Consensus Estimate twice in the trailing four quarters while missing it on the two other occasions. However, it pulled off a positive earnings surprise of 3.5%.

Triton International LimitedTRTN offers acquisition, leasing, re-leasing, and sale of intermodal containers. Last quarter, the company delivered a positive earnings surprise of 8.5%.

Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software.

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.

Click here to sign up for a free trial to the Research Wizard today .

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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Triton International Limited (TRTN): Free Stock Analysis Report

Johnson Outdoors Inc. (JOUT): Free Stock Analysis Report

Sun Hydraulics Corporation (SNHY): Free Stock Analysis Report

Kadant Inc (KAI): Free Stock Analysis Report

Columbus McKinnon Corporation (CMCO): Free Stock Analysis Report

Orthofix International N.V. (OFIX): Free Stock Analysis Report

Align Technology, Inc. (ALGN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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