How to find “Strong Buy” stocks near their highs in the middle of the retreat

S.tocks started the week after the big Omicron variant-focused sell-out on Friday. The comeback didn’t last long as the Dow, S&P 500 and Nasdaq fell 1.6% to 1.9% by late afternoon trade on Tuesday.

The downturn has been attributed to the same new Covid fears. Traders and Wall Street also turned their attention to Jay Powell’s comments that inflation may warrant a faster reduction in their bond purchases.

The market could see more selling in December, which would be healthy given the speed at which the last pullback was washed away. This does not mean that investors with long-term prospects should stay on the sidelines, especially considering how difficult it is to time the market.

With that in mind, let’s dive into a screen to help you find high-ranking stocks that are trading at or near their records. The screen could come in handy for several reasons …

Don’t be afraid of new heights

Some investors may prefer not to buy stocks at new highs. But if someone asks you what the best stocks are in your portfolio, you would likely name the stocks that are rising the hardest.

The most basic idea is that the winners in your portfolio are the ones who move up. If a stock is lagging or falling, you will quickly identify it as one of your worst positions. Hence, it makes sense that some of these stocks will hit new highs along the way.

Many investors are reluctant to buy stocks that hit new 52-week highs. But there is really no need to. Some may worry that they may have already missed the mark by this point, or that it now has more wiggle room to fall. Still, a stock that hits a new 52-week high is a “good thing” just as a stock that hits a new 52-week low is a “bad thing”.

Furthermore, would the person who doesn’t want to buy stocks making new highs be upset if a stock they own breaks to a new 52-week high? Statistics have also shown that stocks that make new highs tend to make even higher highs. And aren’t these the stocks we all dream of?

Now, of course, there must be the fundamentals and you should try to keep an eye on the valuations. But when you’ve been into a stock that was making new highs and cheering them on, it seems strange to be scared that a stock will do the same just because you haven’t bought it yet.

Think about it: a stock just hit a new 52-week high, which is great news. Guess what? It also hit a new 52-week high last year. And the year before. And the year before. Can you imagine how much money you would be leaving on the table if you were scared of being in stocks every time they hit a new high?

parameter

• Current price / 52 week high greater than or equal to .80

• Percentage price change over 12 weeks of more than 0

• Percentage price change over 4 weeks greater than 0

• Zacks rank equals 1

• Price-to-sales ratio less than or equal to the industry median

• P / E ratio (with F1 estimates) less than or equal to the industry median

• Forecast EPS growth for one year F (1) / F (0) greater than or equal to the industry median

• Current average. 20-day volume greater than the previous week’s average. 20 day volume

• All of the above parameters are applied to stocks with a price greater than or equal to $ 5 and an average 20-day volume greater than or equal to 100,000 stocks.

• Percentage price change over 12 weeks + percentage price change over 4 weeks equal to Top # 5

Here are two of the five stocks that made it through today’s screen …

Builders FirstSource, Inc. BLDR

Builders FirstSource is one of the largest US providers of construction products, precast elements and other value-added services for the professional market segment of new residential construction, repair and remodeling.

BLDR is up about 95% in the last year, including a 20% increase in the last month alone. Builders FirstSource stock crushed its industry during these two periods, and Builders FirstSource is currently trading a few dollars below its most recent highs.

Newmark Group NMRK

Newmark Group, Inc. and its subsidiaries are the combined leaders in commercial real estate. NMRK prides itself on supporting every phase of the real estate lifecycle.

Newmark Group stocks have shot up 125% over the past 12 months to offset the 5% surge in the Real Estate Operations Market. NMRK’s growth outlook remains strong, hitting a brand new 52-week high last week. Newmark Group stock has fallen slightly since then, but NMRK’s consensus price target is still higher.

Get the rest of the stocks on this list and look for the latest companies that match those criteria. It is easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial of the Research Wizard. You can do it.

Click here to sign up for a free trial of the Research Assistant today.

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Disclosure: Officers, directors and / or employees of Zacks Investment Research may own or have sold securities and / or hold long and / or short positions in options mentioned in this material. An affiliate investment adviser may own or have sold short sales of securities and / or hold long and / or short positions in options mentioned in this material.

Disclosure: Information on the performance of Zacks’ portfolios and strategies is available at: https://www.zacks.com/performance/.

Zacks’ super screen

It’s hard to believe, even for us at Zacks. But from 2000 to 2020, while the market was up 6.6% a year, our top stock picking strategy averaged around + 52.4% per year.

How has this screen been doing lately? From 2016-2020 it has more than tripled the market growth of + 103.9% with an increase + 381.1% Return.

Free – Check Out The Stocks Revealed Today >>

Click here to get this free report

Builders FirstSource, Inc. (BLDR): Free Stock Research Report

Newmark Group, Inc. (NMRK): Free Stock Research Report

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.

About Paige McCarthy

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