U.S. stock markets are witnessing extreme volatility in April due to the Trump administration’s tariffs on imported products from around the world. The baseline tariff of 10% was imposed on all imports on April 5.
This seems to be the beginning of a global trade war. Economists and financial experts are highly concerned about the impact of these tariffs on U.S. economic growth, especially on inflation, which is already elevated and prolonged. Market participants fear a near-term recession and, in the worst-case scenario, a stagflation in the U.S. economy.
Consequently, a handful of stocks have shown price strength. We have primarily targeted stocks that have recently been on a bull run. Such stocks have a high chance of carrying the momentum forward.
Five such stocks are — Heritage Insurance Holdings Inc. HRTG, Marex Group plc MRX, Kingstone Companies Inc. KINS, ANI Pharmaceuticals Inc. ANIP and HCI Group Inc. HCI.
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.
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 11.
Let’s discuss five out of these 11 stocks here:
Heritage Insurance Holdings provides personal and commercial residential insurance products. HRTG offers personal residential insurance, commercial residential insurance for properties and personal residential and wind-only property insurance, licensed in the state of Pennsylvania. HRTG also provides restoration, emergency, and recovery services, property management, and reinsurance services, homeowners insurance products, including single-family, homeowners or duplex, and condominium owner’s insurance, and dwelling fire insurance policies.
In addition, HRTG provides personal line policies through a network of retail independent agents, wholesale agents, and a partnership with a direct agency, as well as distributes indirectly to retail locations through wholesale agency relationships. Further, HRTG offers personal and commercial insurance policies through a network of independent agencies.
The stock price of Heritage Insurance Holdings has jumped 40% in the past four weeks. It has an expected earnings growth rate of 20.9% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8% over the last 30 days.
Marex Group is a financial services platform provider company that provides liquidity, market access, and infrastructure services to clients in the energy, commodities, and financial markets in the United Kingdom, the United States, and internationally. MRX operates through Clearing, Agency and Execution, Market Making, and Hedging and Investment Solutions segments.
MRX offers execution and clearing services in metals, agricultural products, energy and financial futures and options, liquidity and execution services for financial securities through trading desks that cover products, including foreign exchange, equities, fixed income, and others. MRX also operates as an agent to trade in OTC energy products using knowledge of the energy sector and relationships with clients for oil, power and gas, and shipping and freight products.
The stock price of Marex Group has climbed 11.8% in the past four weeks. The company has expected earnings growth of 6.5% for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 4.5% over the last 30 days.
Kingstone Companies is engaged in the ownership of an insurance company. KINS focuses on automobile, motorcycle and homeowners’ insurance and its customer base is primarily individuals rather than businesses. There are three Atlantic Insurance locations in eastern Pennsylvania. Each of the Barry Scott, Atlantic Insurance and Accurate Agency locations is wholly owned by KINS.
The stock price of KINS has advanced 5.2% in the past four weeks. The company has expected earnings growth of 31% for the current year. The Zacks Consensus Estimate for the current year has improved 5.6% over the last 30 days.
ANI Pharmaceuticals is a biopharmaceutical company that develops, manufactures, and markets branded and generic pharmaceutical products in the United States and internationally. ANIP provides injectables, softgel capsules, and Cortrophin gel, as well as ILUVIEN and YUTIQ products. ANIP also manufactures oral solid dose products, semi-solids, liquids, topicals, controlled substances, and potent products.
ANIP markets, sells, and distributes its products through wholesalers, retail market chains, distributors and specialty pharmacies, group purchasing organizations, specialty pharmacies, hospitals, clinics, and physicians.
The stock price of ANI Pharmaceuticals rose 4.5% in the past four weeks. The company has expected earnings growth of 22.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last seven days.
HCI Group is a holding company that conducts its business activities through its subsidiaries. HCI is engaged in diverse business activities, including property and casualty insurance, information technology, real estate and reinsurance.
HCI provides property and casualty insurance. HCI’s insurance product includes property and casualty homeowners’ insurance, condominium-owners' insurance and tenants’ insurance for individuals owning property.
The stock price of HCI Group has increased 3.6% in the last four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.4% over the last 60 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 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.
Click here to sign up for a free trial to the Research Wizard today.
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Marex Group PLC (MRX) : Free Stock Analysis Report
HCI Group, Inc. (HCI) : Free Stock Analysis Report
ANI Pharmaceuticals, Inc. (ANIP) : Free Stock Analysis Report
Heritage Insurance Holdings, Inc. (HRTG) : Free Stock Analysis Report
Kingstone Companies, Inc (KINS) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
