5 Stocks With Recent Price Strength To Boost Your Portfolio

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 five of the 11 stocks that made it through this screen:

Daqo New Energy Corp. (NYSE:DQ) is engaged in the manufacture and sale of high-quality polysilicon to photovoltaic product manufacturers. Last quarter, the company delivered a positive earnings surprise of 62.1%.

Align Technology Inc. (NASDAQ:ALGN) designs, manufactures and markets the Invisalign System, a proprietary method for treating malocclusion. Last quarter, the company delivered a positive earnings surprise of 23.2%.

Columbus McKinnon Corporation (NASDAQ: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. Last quarter, the company delivered a positive earnings surprise of 13.3%.

SMART Global Holdings Inc. (NASDAQ:SGH) is a designer, manufacturer and supplier of electronic subsystems to OEMs. Last quarter, the company delivered a positive earnings surprise of 23.4%.

Triton International Limited (NYSE:TRTN) offers acquisition, leasing, re-leasing, and sale of intermodal containers. Last quarter, the company delivered a positive earnings surprise of 9.5%.

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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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