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Stocks on the Move With Price Momentum

by John Bajkowski

Stocks On The Move With Price Momentum Splash image

An elementary principle of physics teaches that objects in motion stay in motion, unless acted upon by other forces. An increasing number of investors believe that Newton’s Laws of Motion apply to stocks as well.

Price momentum is often used as a signal that the market is taking notice of a stock’s underlying fundamental strength and that the stock price will continue to grow until fundamentals change. Technicians do not typically concern themselves with the underlying reason for a stock’s price strength, while fundamental investors look at relative strength as a marker for stocks worthy of further analysis.

This issue’s First Cut starts with exchange-listed stocks with a price above $3 per share that have positive earnings for the most recent 12 months. To capture price movement, the First Cut Screen looks for stocks with improving relative strength percentage rank from 52 weeks, to 26 weeks, to 13 weeks, and to four weeks. The relative strength rank indicates how a company’s stock price has performed relative to all other stocks. A rank of 84% indicates that a stock has outperformed 84% of all stocks over that timeframe. Momentum investors look for short-term relative strength to be greater than long-term relative strength. The stocks are then ranked by another popular price momentum measure—current price as a percent of 52-week high. The 30 stocks with the highest price as a percent of 52-week high made the First Cut.

Investors look for stocks with prices above their moving averages as a sign that the price is in an upward trend. It is also common to compare a short-term moving average to a longer-term moving average to measure the trend. The First Cut table provides both a shorter-term 50-day and a longer-term 200-day moving average. The market cap (share price times number of shares) provides an indication of size, while a basic sense of valuation is provided by the price-earnings ratio (share price divided by earnings per share).

Company (Exchange: Ticker) Price as a
% of High
Share
Price
(9/18)
($)
Moving Avg Relative Strength % Rank P/E
Ratio
(X)
Market
Cap
($ Mil)
 
50-
Day
($)
200-
Day
($)
 
52-Wk 2-Yr 4-Wk
(%)
13-Wk
(%)
26-Wk
(%)
52-Wk
(%)
 
(%) (%) Description
Blackbaud, Inc. (M: BLKB) 100 78 23.48 18.50 14.38 84 83 82 77 41.2 1,030 software for non-profit co
Ulta Salon, Cosmetics & Frag (M: ULTA) 100 na  15.95 12.01 8.90 92 90 85 79 33.9 924 beauty retailer
Stepan Company (N: SCL) 98 98 62.03 49.16 40.48 90 85 80 79 12.4 601 specialty chemicals
AeroCentury Corp. (A: ACY) 91 66 17.65 11.82 8.94 95 94 93 90 6.8 27 aircraft lease
Dell Inc. (M: DELL) 91 54 16.69 14.41 11.68 79 66 64 64 17.8 32,639 PCs & software
Parker-Hannifin Corporation (N: PH) 91 63 55.18 48.09 41.89 71 71 66 65 17.8 8,857 fluid power systems
Guess?, Inc. (N: GES) 88 66 37.66 30.99 22.77 86 85 79 62 17.0 3,470 contemporary apparel
Arrhythmia Research Technology (A: HRT) 86 31 4.00 3.38 2.63 90 82 70 58 44.4 11 medical software
Tiffany & Co. (N: TIF) 86 68 38.76 32.01 25.89 84 83 73 69 30.3 4,811 jeweler holding co
BJ Services Company (N: BJS) 85 57 19.82 15.22 12.96 89 81 73 60 17.9 5,790 oilfield services
Interpublic Group of Companies (N: IPG) 85 67 7.47 6.05 4.89 79 75 71 60 21.3 3,631 ads & marketing servs
RPM International Inc. (N: RPM) 84 72 18.24 16.02 13.94 75 64 58 53 19.6 2,351 specialty chemicals
Airgas, Inc. (N: ARG) 83 76 49.84 44.24 39.41 64 60 55 55 16.8 4,078 specialty gases
Ark Restaurants Corp. (M: ARKR) 83 43 16.20 13.46 11.60 79 71 63 53 15.3 57 restaurants & bars
National Instruments Corp. (M: NATI) 83 79 28.55 25.40 22.12 67 66 57 53 47.6 2,216 measure prods
Esterline Technologies Corp. (N: ESL) 82 62 38.88 30.87 29.82 88 79 74 56 10.5 1,157 mfr for aerospace
Agree Realty Corporation (N: ADC) 81 71 24.02 19.91 16.71 80 76 74 51 11.7 197 retail property REIT
Brookfield Asset Management (N: BAM) 81 59 23.70 20.15 16.71 73 71 69 54 25.2 13,556 property & power invest
Finish Line, Inc., The (M: FINL) 81 75 9.34 8.56 6.83 79 76 63 51 233.5 513 specialty retailer
MSC Industrial Direct Co., Inc (N: MSM) 81 80 43.52 39.83 36.11 69 64 57 53 18.2 2,725 industrial prods
Canadian Natural Resource Ltd (N: CNQ) 80 63 69.20 59.19 47.14 79 75 66 57 7.9 37,514 oil & natural gas
Cooper Industries Plc (N: CBE) 80 66 37.71 33.49 29.90 79 62 58 54 13.5 6,289 electrical prods & tools
Perrigo Company (M: PRGO) 80 74 31.88 28.64 26.94 69 58 48 47 21.1 2,941 pharmaceuticals
Volcom, Inc. (M: VLCM) 80 36 16.12 13.51 11.51 84 72 70 49 31.0 393 young adult clothing
Genesis Lease Limited (N: GLS) 79 35 8.82 5.88 4.15 95 94 89 49 8.6 303 aircraft lease
Harsco Corporation (N: HSC) 79 53 35.29 30.94 27.13 73 66 63 48 18.2 2,834 industrial services
Invesco Ltd. (N: IVZ) 78 70 22.56 20.06 15.65 71 70 69 60 33.7 9,386 investment mgmt co
bebe stores, inc. (M: BEBE) 77 54 8.51 7.09 6.89 85 71 56 47 60.8 738 women's apparel
Graco Inc. (N: GGG) 77 73 30.66 25.15 22.02 84 79 75 45 32.3 1,837 fluid handling solutions
COMSCORE, Inc. (M: SCOR) 76 41 17.01 14.68 12.28 81 72 69 43 23.0 513 digital marketing




 

John Bajkowski is president of AAII.


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