Chicago, IL – September 19, 2024 – Stocks in this week’s article are TAL Education Group TAL, The RealReal REAL, DarioHealth DRIO, HealthEquity HQY and Energous WATT.
Bet on 5 Top-Ranked Stocks with Rising P/Es for Stellar Gains
Investors often opt for an approach that involves picking 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 TAL Education Group, The RealReal, DarioHealth, HealthEquity and Energous
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 52.
Here are five out of the 52 stocks:
TAL Education Group: The Zacks Rank #2 company provides K-12 after-school tutoring service in China. You can see the complete list of today’s Zacks #1 Rank stocks here.
The average four-quarter earnings surprise of TAL is 66.67%.
The RealReal: The Zacks Rank #2 company operates an online marketplace for consigned luxury goods. It offers resale product categories, including women's, men's, kids', jewelry and watches, as well as home and art products.
The average four-quarter earnings surprise of REAL is 26.57%.
DarioHealth: The Zacks Rank #2 company creates mobile and digital tools.
The average four-quarter earnings surprise of DRIO is 53.22%.
HealthEquity: The Zacks Rank #2 company HealthEquity provides integrated solutions for healthcare account management, health reimbursement arrangement and flexible spending accounts for health plans, insurance companies and third-party administrators in the United States.
The average four-quarter earnings surprise of HQY is 19.76%.
Energous: The Zacks Rank #2 company is a developer of a disruptive wire-free charging technology.
The average four-quarter earnings surprise of WATT is 10.30%.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2337607/bet-on-5-top-ranked-stocks-with-rising-pe-for-stellar-gains
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