Zacks
Zacks.com featured highlights include Stryve Foods, Nevro, Canoo, MSA Safety and VTEX
Zacks Equity Research
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For Immediate Release

Chicago, IL – December 11, 2024 – Stocks in this week’s article are Stryve Foods SNAX, Nevro NVRO, Canoo GOEV, MSA Safety Inc. MSA and VTEX VTEX.

Bet on 5 Top-Ranked Stocks with Rising P/E Ratios

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 Stryve Foods, Nevro, Canoo, MSA Safety Inc.  and VTEX.

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, astock'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.

Just these few criteria narrowed down the universe from over 7,700 stocks to just 38.

Here are five out of the 38 stocks:

Stryve Foods: The Zacks Rank #2 company is an emerging healthy snacking company that manufactures, markets and sells healthy snacking products. You can see the complete list of today’s Zacks #1 Rank stocks here.

The average four-quarter earnings surprise of SNAX is 15.71%.

Nevro: The Zacks Rank #2 company is a medical device company that engages in developing and commercializing a neuromodulation platform for the treatment of chronic pain, primarily in the leg.

The average four-quarter earnings surprise of NVRO is 42.73%.

Canoo: The Zacks Rank #2 company is engaged in developing breakthrough electric vehicles with a proprietary and highly versatile EV platform for personal and business use.

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