A jittery oil market, an ambiguous interest rate policy of the Fed and mixed U.S. economic data has left investors in a state of turmoil, of late. Fearing overvaluation, several investors chose to cash in at current valuations thereby triggering a sell-off and exerting downward pressure on many fundamentally attractive stocks. As a result of this market overreaction, many such stocks that fell to their 52-week lows are now hovering at attractive valuations. Such stocks enable investors who showcase patience and believe in positive long-term fundamentals to earn greater returns and make more money, going ahead.
We here at Zacks help investors to zero-in on the most promising stocks of this kind using our new style score system. We use our potent mix of a favorable growth score of ‘A’ or ‘B’, a Zacks Rank #1 (Strong Buy) or 2 (Buy) and current price as a percentage of 52-week high minus low range, to winnow the wheat from the chaff when making the selection.
The Metrics
Our Zacks Rank system is a timeliness indicator, meaning that value investors can use it to identify precisely when a company's prospects are beginning to improve. Stocks with a Zacks Rank #1 or 2 are the ones to look out for. Those with a Growth Score of A or B are deemed the strongest and are expected to yield the highest return over the next 1-3 months for investors. Meanwhile, stocks hovering in the 52-week high-to-low range signal a potential rebound in the coming days.
Our Picks
On the basis of the abovementioned measures, we hereby shortlist four stocks that are worthy of a place in an investor’s portfolio.
Discovery Laboratories Inc. DSCO is a development-stage pharmaceutical company that focuses on developing compounds to treat respiratory diseases. The loss estimate of the company for the current year has narrowed by 50.3% on the back of a positive estimate revision, in the last 30 days. This signals healthy recovery going ahead. The stock carries a Zacks Rank #2 and a growth score of B. The stock currently trades at 1.7% of its 52-week high minus low range.
XOMA Corporation XOMA is a biopharmaceutical company engaged in the discovery, development and manufacture of therapeutic antibodies. The loss estimate of the company for the current quarter has narrowed by a penny, on the back of one positive estimate revision, in the last 30 days signaling a possible recovery in the near term. The stock carries a Zacks Rank #2 and a growth score of A. The stock currently trades at 2.4% of its 52-week high minus low range.