5 Stocks With Recent Price Strength in a Volatile January

Wall Street has been suffering since the beginning of 2022 after finishing two successive impressive years despite being pandemic-ridden. In fact, severe volatility has gripped U.S. stock markets since Black Friday of 2021 with the resurgence of the Omicron variant of coronavirus and the Fed’s decision of a drastic shift from ultra-dovish monetary policies to a relatively hawkish stance.

Although, Fed Chairman Jerome Powell refrained from commenting anything on when the Fed will raise the benchmark lending rate and at what magnitude, Fed’s dot-plot indicates that all 18 members are expecting at least one rate hike in 2022. Of 18 Fed members, 12 expect three rate hikes in 2022 followed by two more in 2023 and 2024. Several analysts also warned that the Fed might hike rates as early as March.

The primary concern of the central bank is soaring inflation. The pandemic-led global disruption of the supply-chain system inflated input costs while growing demand is pulling up the general price level. In the United States, the consumer price index jumped to a 40-year high in December.

Several stocks have gained in the past four weeks. Notable among them are — Metropolitan Bank Holding Corp. MCB, Horizon Bancorp Inc. HBNC, CBIZ Inc. CBZ, Sensus Healthcare Inc. SRTS and Ocwen Financial Corp. OCN.

Here’s How We Arrived at the Picks

We have primarily targeted stocks that have freshly been on a bull run. Stocks seeing price strength recently have a high chance of carrying the momentum forward.

If a stock is continuously witnessing an uptrend, there must be a solid reason or it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.

However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed 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 or 2: 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.

Just these few criteria narrowed down the search from over 7,700 stocks to just 9.

Let’s discuss our five picks out of the 9 stocks:

Metropolitan Bank operates as the bank holding company for Metropolitan Commercial Bank that provides a range of business, commercial, and retail banking products and services to small businesses, middle-market enterprises, public entities, and individuals in the New York metropolitan area.

MCB offers deposits, small business lending, trade finance, cash management solutions, speciality markets, personal checking, savings, electronic banking and prepaid cards.

The stock price of Metropolitan Bank has climbed 17.7% in the past four weeks. MCB has an expected earnings growth rate of 10.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.1% over the last 60 days.

Horizon Bancorp operates as the bank holding company for Horizon Bank that provides a range of commercial and retail banking services. HBNC offers demand and time deposits. Horizon Bancorp also provides commercial, residential real estate, mortgage warehouse, and consumer loans.

In addition, HBNC offers corporate and individual trust and agency, investment management, and real estate investment trust services; and sells various insurance products.

The stock price of Horizon Bancorp has appreciated 16.2% in the past four weeks. HBNC has an expected earnings growth rate of 2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3% over the last 30 days.

Sensus Healthcare manufactures, distributes, and markets superficial radiation therapy devices to healthcare providers worldwide. SRTS specializes in offering non-melanoma skin cancers and other skin conditions, such as keloids, with superficial radiation therapy. Sensus Healthcare’s portfolio of treatment devices consists of the SRT-100 and SRT-100 Vision.

The stock price of SRTS has surged 15.7% in the past four weeks. Sensus Healthcare has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the last 30 days.

Ocwen Financial is a financial services holding company engaged in asset acquisition and resolution, residential finance, commercial finance, investment management and hotel operations. OCN primarily specializes in the acquisition and resolution of non-performing or underperforming loans.

Ocwen Financial operates in the United States, the United States Virgin Islands, India, and the Philippines. OCN has two operating segments — Servicing and Originations.

The stock price of Ocwen Financial has advanced 7.9% in the past four weeks. OCN has an expected earnings growth rate of 96.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.1% over the last 60 days.

CBIZ provides professional business services that help clients better manage their finances and employees. CBZ provides its clients with financial services including accounting, tax, financial advisory, government health care consulting, risk advisory, merger and acquisition advisory, real estate consulting, and valuation services.

CBIZ operates through three segments: Financial Services, Benefits and Insurance Services, and National Practices. CBZ is one of the nation's largest brokers of employee benefits and property and casualty insurance, and one of the largest accounting and valuation companies in the United States

The stock price of CBIZ has gained 7.4% in the past four weeks. CBZ has an expected earnings growth rate of 13.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.3% over the last 7 days.

You 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.

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 to day. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

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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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Ocwen Financial Corporation (OCN) : Free Stock Analysis Report
 
CBIZ, Inc. (CBZ) : Free Stock Analysis Report
 
Horizon Bancorp IN (HBNC) : Free Stock Analysis Report
 
Sensus Healthcare, Inc. (SRTS) : Free Stock Analysis Report
 
Metropolitan Bank Holding Corp. (MCB) : Free Stock Analysis Report
 
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