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  Solid Relative Price Strength Puts These 5 Companies In the Spotlight  
  Lorimer Wilson on 2018-06-29 16:55:51.0
 
 

Earnings growth and valuation multiples are indeed important for investors to determine a stock's ability to offer considerable returns but it is imperative that you determine whether or not an investment has relevant upside potential when considering stocks with significant relative price strength and…whether analysts are optimistic about the upcoming earnings results of these companies. This article analyzes 5 of the 9 stocks that met our screening parameters.

This version of the original article by Nilanjan Choudhury has been edited for length (…) and clarity ([ ]) by munKNEE.com to provide a fast & easy read

These are also essential in determining whether a stock's price performance is better than its peers or the industry average. If the stock's performance is lacking that of the broader groups despite impressive earnings growth or valuation multiples, then something must be wrong. It's always advisable to stay away from these stocks and bet on those that are outperforming their respective industries or benchmarks. This is because betting on a winner always increases the odds of winning.

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
  • % 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.
  • 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 five of the nine stocks that made it through the screen:

1. Domtar Corp. (UFS) : A manufacturer and distributer of fiber-based products including communication papers, specialty and packaging papers and adult incontinence products, Domtar has a VGM Score of A. Over 30 days, the Fort Mill, SC-based company has seen the Zacks Consensus Estimate for 2018 and 2019 increase 10.4% and 6.5%, to $3.62 and $3.77 per share, respectively.

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2. Expedia Group, Inc. (EXPE): Expedia Group is one of the largest online travel companies in the world focusing on travel planning, travel purchases, and travel experience sharing. The 2018 Zacks Consensus Estimate for this Bellevue, WA-based company is $5.19, representing some 20.7% earnings per share growth over 2017. Next year's average forecast is $5.98, pointing to another 15.2% growth. Expedia Group has a VGM Score of B.

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3. Whiting Petroleum Corp. (WLL): Whiting Petroleum, headquartered in Denver, CO, is an independent energy company engaged in the exploration, development, and production of crude oil and natural gas properties in the United States. The firm has a VGM Score of B and an excellent earnings surprise history. It has a 100% track of outperforming estimates over the last four quarters at an average rate of 100.08%.

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4. WellCare Health Plans, Inc. (WCG): WellCare Health Plans offers government-sponsored managed care services ? Medicaid, Medicare Advantage and Medicare PDP ? to eligible families and individuals. Sporting a VGM Score of A, this Tampa, FL-headquartered company's expected EPS growth rate for three to five years currently stands at 14.60%, comparing favorably with the industry's growth rate of 13.20%.

5. ConocoPhillips (COP): Founded in 1875 and headquartered in Houston, TX, ConocoPhillips is a major global oil and gas exploration and production company with operations and activities in 17 countries. The company has a VGM Score of A and an enviable earnings surprise history. It surpassed estimates in three of the last four quarters.

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The post Solid Relative Price Strength Puts These 5 Companies In the Spotlight appeared first on munKNEE.com.

 
 
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