5 Stocks With Recent Price Strength Buoyed by a Strong August

U.S. stock markets ended August on a positive note after a mixed June and July. The Dow was up more than 1%, marking its fifth consecutive monthly winning streak. The S&P 500 and the Nasdaq Composite advanced 2.6% and 3.9%, respectively. 

Both the S&P 500 and the Nasdaq Composite posted their first monthly advance since May. Moreover, the Dow and the S&P 500 recorded their new all-time highs both on an intraday and closing basis, early last month.

As a result, a few stocks have shown price strength. We have primarily targeted stocks that have recently been on a bull run. These stocks have a high chance of carrying the momentum forward.

Five such stocks are — EuroDry Ltd. EDRY, RCM Technologies Inc. RCMT, Assembly Biosciences Inc. ASMB, Delcath Systems Inc. DCTH and National Energy Services Reunited Corp. NESR.

If a stock is continuously witnessing an uptrend, there must be a solid reason, or it would probably have 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.

Screening Parameters:

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: 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 12.

Let’s discuss five out of those 12 stocks here:

EuroDry is an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes. EDRY owns and operates drybulk carriers that transport major bulks, such as iron ore, coal, and grains, and minor bulks, including bauxite, phosphate, and fertilizers.

The stock price of EDRY has soared 109.3% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 35.1% over the last 30 days.

RCM Technologies is a national provider of business, technology and resource solutions in information technology and professional engineering to customers in the corporate and government sectors. 

RCMT has grown its information technology competencies in the areas of resource augmentation, e-business, Enterprise Resource Planning support, network and infrastructure support and knowledge management. RCMT's engineering expertise is in the form of technical design, field engineering, field support, procedures development and project and program management. 

The stock price of RCM Technologies has jumped 42.9% over the past four weeks. The company has an expected earnings growth rate of 22.8% for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 13.3% over the last 30 days.

Assembly Biosciences is a biopharmaceutical company that develops therapies for infectious diseases and other disorders of the gastrointestinal (GI) system. ASMB’s product portfolio consists of two late-stage assets: VEN 307 for relief from pain associated with anal fissures and VEN 308 for the treatment of fecal incontinence. 

ASMB is also developing novel microbiome-based technology for targeted oral delivery of therapeutic bacteria, complex proteins, viral antigens and small molecules to treat intractable infectious diseases of the GI tract, such as C. difficile infections. 

The stock price of Assembly Biosciences has surged 38.4% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 20% over the last 30 days.

Delcath Systems is an interventional oncology company focused on the treatment of primary and metastatic liver cancers in the United States and Europe. DCTH’s lead product candidate is HEPZATO KIT, a melphalan for injection/hepatic delivery system to administer high-dose chemotherapy to the liver while controlling systemic exposure and associated side effects. 

DCTH’s clinical development program for HEPZATO is the FOCUS clinical trial for patients with metastatic hepatic-dominant uveal melanoma to investigate objective response rate in metastatic uveal melanoma.

The stock price of Delcath Systems has climbed 31.3% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved more than 100% over the last 30 days.

National Energy Services is one of the largest national oilfield services providers in the MENA and Asia Pacific regions. NESR helps its customers unlock the full potential of their reservoirs by providing production services such as cementing, coiled tubing, filtration, completions, stimulation and fracturing, and nitrogen services. 

NESR also helps its customers to access the reservoirs in a smarter and faster manner by providing drilling and evaluation services like drilling downhole tools, directional drilling, fishing tools, testing services, wireline, slickline, fluids and rig services.

The stock price of NESR has rallied 23.4% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 4.6% over the last 30 days.

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This article originally published on Zacks Investment Research (zacks.com).

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