Stocks experienced an up and down session that saw the Nasdaq close 1% higher Tuesday. The chaotic day marks the continuation of a tumultuous run since the end of March that included the Nasdaq’s largest monthly decline since October of 2008 in April. The S&P 500, meanwhile, suffered its worst drop since the initial covid lockdowns in March 2020.
Wall Street has been selling all things remotely growth related and really most other stocks outside of oil and energy as investors prepare for higher interest rates to help combat 40-year high inflation. Investors are also increasingly focused on the ongoing Russian invasion and strict Chinese covid lockdowns that could keep lifting energy prices and clogging up supply chains even more.
Many investors have likely sold during the downturn and others could be waiting on the sidelines until the dust settles before they start diving back in. But trying to call the bottom is really only possibly in retrospect, which makes market-timing so difficult and potentially dangerous.
Plus, it is worth remembering that Wall Street must put money to work in order to beat 8.5% inflation, and bond yields are still historically low. Therefore, investors with long-term horizons might start buying some of their favorite stocks at discounts, even if they keep falling in the near-term because history has shown that markets eventually recover and post new highs.
Let’s use our Filtered Zacks Rank 5 Stock Screen to help investors find potential winners in order to better navigate the current market downturn.
Zacks Rank #1 (Strong Buy) stocks outperform the market in both good and bad times. However, there are over 200 stocks that earn a Zacks Rank #1 at any given time. Therefore, it’s helpful to understand how to apply filters to the Zacks Rank in order to narrow the list down to a more manageable and tradable set of stocks.
Clearly, there are only three items on this screen. But together, these three filters can result in some impressive returns.
• Zacks Rank equal to 1
Starting with a Zacks Rank #1 is often a strong jumping off point because it boasts an average annual return of roughly 24.4% per year since 1988.
• % Change (Q1) Est. over 4 Weeks greater than 0
Positive current quarter estimate revisions over the last four weeks.
• % Broker Rating Change over 4 Week equal to Top # 5
Top 5 stocks with the best average broker rating changes over the last four weeks.
This strategy comes loaded with the Research Wizard and is called bt_sow_filtered zacks rank5. It can be found in the SoW (Screen of the Week) folder.
Here are two of the five stocks that qualified for the Filtered Zacks Rank 5 strategy today…
Carlisle Companies Incorporated CSL
Carlisle Companies is a leading supplier of innovative building envelope products. These are essentially all things that separate the interior and exterior of a building such as windows, doors, roof, floor, foundations, and insulation. Carlisle is heavily focused on energy-efficient solutions that aim to help “drive lower GHG emissions, improve energy savings for building owners and operators, and increase a building’s resiliency to the elements.”
Carlisle topped our Q1 earnings and revenue estimates on April 28, having pulled in record quarterly sales that soared 45% organically YoY to $1.5 billion. Carlisle said that its acquisition of Henry “continues to exceed” its “expectations.” Carlisle upped its outlook as it successfully navigates rising costs and supply chain issues. The firm is benefitting from “pent-up demand in re-roofing backlogs” and beyond. CSL shares have surged 115% in the last two years and are up 2% in 2022 vs. its industry’s 20% decline. The recent strength is part of a much longer run of market and industry outperformance.
Griffon Corporation is a diversified management and holding company that conducts business through wholly-owned subsidiaries. GFF operates within two broader reportable segments. Griffon’s Consumer and Professional Products unit includes branded consumer and professional tools, as well as residential, industrial and commercial fans, home storage and organization products, and much more. Meanwhile, its Home and Building Products division features garage doors, rolling steel doors, and beyond.
Griffon topped our Q2 financial estimates in late April, crushing our adjusted EPS estimate by 200% for the second quarter in a row. GFF stock soared after its release on the back of strong guidance. Zacks estimates call for its revenue to climb 19% this year and another 8% next year. Meanwhile, its adjusted earnings are projected to jump 69% and 10%, respectively during this stretch. And GFF pays a dividend.
See the rest of the stocks on this list and start trading the Filtered Zacks Rank 5 (or any of our other strategies) in your own account. Remember, the key to successful screening is finding screens that have produced profitable results in the past. And that’s exactly what you get with the Research Wizard stock picking and backtesting program.
Get the rest of the stocks on this list and start looking for the newest companies that fit these criteria. It’s easy to do. And it could help you find your next big winner. Start screening for these companies today with a free trial to the Research Wizard. You can do it.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
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/
Today’s Stocks from Zacks’ Best Screens
Now would you like to screen for the latest stocks from Zacks’ most successful strategies? In 2021, while the market gained an impressive +28.8%, we saw results like these: Technical Analysis & Fundamental Analysis Winners +67.6%, Momentum Method 1 +94.4%, and Value Method 1 +95.3%.
You’re invited to screen the latest stocks in seconds by trying Zacks’ Research Wizard stock-picking program. Or use the Wizard to create your own market-beating strategies. No credit card needed, no cost or obligation.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.