5 Winning Stocks Backed by the Overlooked Rising P/E Trick

Zacks2022-11-21

Trying hands at bargain stocks that have a low price-to-earnings (P/E) ratio is a common practice. The perception is that the lower the P/E, the higher will be the value of the stock. This inference ...

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The perception is that the lower the P/E, the higher will be the value of the stock. This inference ...</p>\n\n<a href=\"https://finance.yahoo.com/news/5-winning-stocks-backed-overlooked-123612698.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SPY","symbol_name":"标普500ETF","start_time":0,"source_url":"https://finance.yahoo.com/news/5-winning-stocks-backed-overlooked-123612698.html","article_id":"2285302583","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/sBQlo2gP4GfHF57FEPJ.Wg--~B/aD00OTg7dz05MDA7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/769d41271179e8a81ac24a012b144f89"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2285302583","pubTimestamp":1669034172,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Trying hands at bargain stocks that have a low price-to-earnings (P/E) ratio is a common practice. T","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"161125":"标普500","513500":"标普500ETF","SPY":"标普500ETF","BK4539":"次新股","BK4191":"家用电器","BK4108":"电影和娱乐","BK4585":"ETF&股票定投概念",".SPX":"S&P 500 Index","BK4534":"瑞士信贷持仓","OEX":"标普100","OEF":"标普100指数ETF-iShares","BK4139":"生物科技","BK4007":"制药","SSO":"两倍做多标普500ETF","BK4082":"医疗保健设备","BK4535":"淡马锡持仓","IVV":"标普500指数ETF","BK4559":"巴菲特持仓","BK4568":"美国抗疫概念","BK4550":"红杉资本持仓","CURI":"CuriosityStream Inc.","SDS":"两倍做空标普500ETF","HSDT":"Helius Medical Technologies, Inc.","VIR":"Vir Biotechnology, Inc.","SH":"标普500反向ETF","AMC":"AMC院线","LYV":"Live Nation Entertainment","APE":"AMC Entertainment Preferred","SPXU":"三倍做空标普500ETF","UPRO":"三倍做多标普500ETF","BK4547":"WSB热门概念","TERN":"Terns Pharmaceuticals, Inc.","CRCT":"Cricut, Inc.","BK4581":"高盛持仓","BK4504":"桥水持仓"},"translate_title":"被忽视的市盈率上升技巧支持的5只获胜股票","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"161125":0.6,"513500":0.6,"VIR":1,"CURI":1,"HSDT":1,"LYV":1,"AMC":0.9,"TERN":0.9,"CRCT":0.9,"SPY":0.9,"ESmain":0.6,"IVV":0.6,"OEF":0.6,"OEX":0.6,"SDS":0.6,"SH":0.6,"SPXU":0.6,"SSO":0.6,"UPRO":0.6,"APE":0.6,".SPX":0.6},"content_text":"Trying hands at bargain stocks that have a low price-to-earnings (P/E) ratio is a common practice. The perception is that the lower the P/E, the higher will be the value of the stock. This inference is drawn on the simple logic that a stock’s current market price does not justify (is not equivalent to) its higher earnings and therefore has room to run.\nBut have you ever given it a thought that stocks with a rising P/E can also be worth buying. We’ll tell you why this often-overlooked approach may go a long way in cherry picking some solid stocks.\nThe screener yields winning stocks like AMC Entertainment AMC, Live Nation Entertainment LYV, CuriosityStream CURI, Helius Medical Technologies HSDT and Vir Biotechnology VIR. \nWhy Rising P/E a Valuable Tool?\nInvestors should note that stock price moves in tandem with earnings performance. If earnings come in stronger, the price of a stock shoots up. Solid quarterly earnings and the forward guidance boost earnings forecasts, leading to stronger demand for the stock and an uptrend in its price.\nSo, if the price is rising steadily, it means that investors are assured of the stock’s fundamental strength and expect some strong positives out of it. Suppose an investor wants to buy a stock with a P/E ratio of 30, it means that he is willing to shell out $30 for only $1 worth of earnings. This is because the investor expects earnings of the company to rise at a faster pace in the future on the back of strong fundamentals.\nAlso, studies have revealed that stocks have seen their P/E ratios jump over 100% from their breakout point in the cycle. So, if you can pick stocks early in their breakout cycle, you can end up seeing considerable gains.\nThe Winning Strategy\nIn order to shortlist stocks that are exhibiting an increasing P/E, we chose the following as our primary screening parameters.\nEPS growth estimate for the current year is greater than or equal to last year’s actual growth\nPercentage change in last year EPS should be greater than or equal to zero\n(These two criteria point to flat earnings or a growth trend over the years.)\nPercentage change in price over four weeks greater than the percentage change in price over 12 weeks\nPercentage change in price over 12 weeks greater than percentage change in price over 24 weeks\n(These two criteria show that price of the stock is increasing consistently over the said timeframes.)\nPercentage price change for four weeks relative to the S&P 500 greater than the percentage price change for 12 weeks relative to the S&P 500\nPercentage price change for 12 weeks relative to the S&P 500 greater than the percentage price change for 24 weeks relative to the S&P 500\n(Here, the case for consistent price gains gets even stronger as it displays percentage price changes relative to the S&P 500.)\nPercentage price change for 12 weeks is 20% higher than or equal to the percentage price change for 24 weeks, but it should not exceed 100%\n(A 20% increase in the price of a stock from the breakout point gives cues of an impending uptrend. But a jump of over 100% indicates that there is limited scope for further upside and that the stock might be due for a reversal.)\nIn addition, we place a few other criteria that lead us to some likely outperformers.\nZacks Rank less than or equal to 2: Only companies with a Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy) can get through.\nAverage 20-day Volume greater than or equal to 50,000: High trading volume implies that the stocks have adequate liquidity.\nJust these few criteria narrowed down the universe from over 7,700 stocks to just 57.\nHere are five out of the 57 stocks:\nAMC Entertainment (AMC): The Zacks Rank #2 theatrical exhibition company operates primarily in the United States and internationally. You can see the complete list of today’s Zacks #1 Rank stocks here.\nThe average earnings surprise of AMC for the past four quarters is 22.67%.\nLive Nation Entertainment (LYV): This Zacks Rank #2 live entertainment company operates through the Concerts, Ticketing, and Sponsorship and Advertising segments.\nThe average earnings surprise of LYV for the past four quarters is 9.72%.\nCuriosityStream (CURI): The factual entertainment company has features including stunning visuals and unrivaled storytelling to demystify science, nature, history, technology, society and lifestyle. It has a Zacks Rank #2.\nThe average earnings surprise of CURI for the past four quarters is 22.41%.\nHelius Medical Technologies (HSDT): The Zacks Rank #2specialty medical device company is focused on the development and regulatory approval of its non-invasive neurostimulation device called PoNS.\nThe average earnings surprise of HSDT for the past four quarters is 50%.\nVir Biotechnology (VIR):  The Zacks Rank #2 company is focused on combining immunologic insights to treat and prevent serious infectious diseases.\nThe average earnings surprise of VIR for the past four quarters is 3,182.38%.\nYou can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.\nThe 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.\nClick here to sign up for a free trial to the Research Wizard today.\nDisclosure: 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.\nDisclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. \nClick to get this free report\n \n\nLive Nation Entertainment, Inc. (LYV) : Free Stock Analysis Report\n \n\nAMC Entertainment Holdings, Inc. (AMC) : Free Stock Analysis Report\n \n\nHelius Medical Technologies, Inc. (HSDT) : Free Stock Analysis Report\n \n\nVir Biotechnology, Inc. (VIR) : Free Stock Analysis Report\n \n\nCuriosityStream Inc. (CURI) : Free Stock Analysis Report\n \n\nTo read this article on Zacks.com click here.\n \n\nZacks Investment Research","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2285302583"}