U.S. markets are grappling with uncertainty as a hawkish tone from Fed Chairman Jerome Powell on rate cuts and President-elect Donald Trump’s nomination of a vaccine skeptic to lead the Department of Health and Human Services weigh on sentiment. With post-election rallies fading, investors are turning cautious. In such volatility, a relative price strength strategy — focusing on stocks outperforming their peers — offers a resilient approach to identifying winning investments while minimizing risks in unpredictable markets.

At this stage, investors would be wise to consider stocks like Rigel Pharmaceuticals RIGL, Synchrony Financial SYF, SkyWest, Inc. SKYW, Allient Inc. ALNT and Rush Street Interactive RSI based on their relative price strength.

Relative Price Strength Strategy

Earnings growth and valuation multiples are indeed important for investors to determine a stock's ability to offer considerable returns. But these are also essential for determining whether a stock’s price performance is better than its peers or the industry average.

If a 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 industry or benchmark. This is because betting on a winner always proves to be lucrative.

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 for 1 to 3 months, at least, and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.

Finally, it is crucial to find out whether analysts are optimistic about the upcoming earnings 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

(We have considered those stocks that have been outperforming the S&P 500 over the last 12 weeks, four weeks and one week.)

% 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. You can see the complete list of today’s Zacks #1 Rank stocks here.

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.

Rigel Pharmaceuticals: It is a clinical-stage company dedicated to discovering and developing innovative small-molecule drugs. RIGL’s focus spans inflammatory diseases, cancer, and viral infections. The Zacks Consensus Estimate for 2024 earnings of Rigel Pharmaceuticals indicates 112.1% growth. Headquartered in South San Francisco, CA, RIGL has a VGM Score of A.

The firm has a market capitalization of $424.5 million. Rigel Pharmaceuticals beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, the average being 1,754.3%. RIGL shares have increased 157.4% in a year.

$Synchrony Financial(SYF-B)$: It is one of the nation’s premier consumer financial services companies, offers a wide range of credit products. The 2024 Zacks Consensus Estimate for Stamford, CT-based SYF indicates 25.6% year-over-year earnings per share growth. Synchrony Financial has a VGM Score of A.

SYF beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, the average being 4.5%. Synchrony Financial shares have gone up 117.9% in a year.

SkyWest: It operates as a regional airline in the United States through its subsidiary SkyWest Airlines. The Zacks Consensus Estimate for 2024 earnings of SkyWest indicates 829.8% growth. Headquartered in Saint Georg, UT, SKYW has a VGM Score of B.

The firm has a market capitalization of $4.5 billion. SkyWest beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 79.1%. SKYW shares have gained 135% in a year.

Allient: Based in New York, the company designs, manufactures, and sells precision motion control systems and components, serving diverse global markets, including industrial, medical, vehicle, and aerospace and defense, with integrated solutions and standalone products. ALNT, with a VGM Score of B, has a current market capitalization of $408.3 million.

Notably, over the past 60 days, the Zacks Consensus Estimate for Allient’s 2024 earnings has moved up 10.9%. It beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed in the other, the average being 38.5%. ALNT shares have lost 8.7% in a year.

Rush Street Interactive: It develops and operates regulated online gaming platforms, offering real-money casino games, sports wagering, and social gaming across multiple U.S. states and international markets. The 2024 Zacks Consensus Estimate for Chicago, IL-based RSI indicates 235.7% year-over-year earnings per share growth. Rush Street Interactive has a VGM Score of B.

Rush Street Interactive beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being 225%. RSI shares have surged 137.8% in a year.

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 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.

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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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Rigel Pharmaceuticals, Inc. (RIGL) : Free Stock Analysis Report

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Allient Inc. (ALNT) : Free Stock Analysis Report

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