Chicago, IL – April 4, 2025 – Stocks in this week’s article are Context Therapeutics Inc. CNTX, Blue Bird BLBD, Dycom Industries DY and Leidos LDOS.
Bet on 4 Top-Ranked Stocks with Rising P/Es for Solid Gains
Investors often opt for the stock-picking approach that involves stocks with a low price-to-earnings (P/E) ratio. This strategy is based on the notion that the lower the P/E ratio is, the higher the stock value. The reasoning behind this is straightforward — when a stock's current market price does not adequately reflect its higher earnings, it suggests potential for growth.
But there is more to this whole P/E story. Because not only low P/E, stocks with a rising P/E can also fetch strong returns. In this regard, investors can bet on the likes of Context Therapeutics Inc.,Blue Bird,Dycom Industries andLeidos.
Rising P/E: A Useful Tool
The concept is that as earnings rise, so should the price of the stock. As forecasts for expected earnings come in higher, strong demand for the stock should continue to push up its prices. After all, a stock's P/E gives an indication of how much investors are ready to shell out per dollar of earnings.
Suppose an investor wants to buy a stock with a P/E ratio of 30. This means that he is willing to shell out $30 for only $1 worth of earnings as he expects earnings of the company to rise at a faster pace in the future owing to strong fundamentals.
So, if the P/E of a stock is rising steadily, it means that investors are assured of its inherent strength and expect some strong positives out of it.
Also, studies have revealed that stocks have seen their P/E ratios jump over 100% from their breakout point in the cycle. So, if you can pick stocks early in their breakout cycle, you can end up seeing considerable gains.
Here are four out of the 76 stocks:
Context Therapeutics: The Zacks Rank #2 company is a women's oncology company developing advanced small molecule and immunotherapy treatments to transform care for hormone-driven breast and gynecological cancers. You can see the complete list of today's Zacks #1 Rank stocks here.
The average four-quarter earnings surprise of CNTX is 22.37%.
Blue Bird: The Zacks Rank #2 company is engaged in the designing, engineering, manufacturing and sale of school buses and related parts.
The average four-quarter earnings surprise of BLBD is 49.64%.
Dycom Industries: The Zacks Rank #2 Dycom Industries Inc. is a specialty contracting firm operating in the telecom industry.
The average four-quarter earnings surprise of DY is 26.99%.
Leidos: The Zacks Rank #2 company is a global science and technology leader that serves the defense, intelligence, civil and health markets. Its core capabilities include providing solutions in the fields of cybersecurity; data analytics; enterprise IT modernization; operations and logistics; sensors, collection and phenomenology; software development; and systems engineering.
The average four-quarter earnings surprise of LDOS is 28.34%.
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