5 Relative Price Strength Stocks to Manage Market Volatility

Market Overview - Recent market sell-offs are attributed to a combination of factors, leading to a pullback and correction in major indexes, with investors concerned about an economic slowdown and recession due to disappointing economic indicators [1] - Weak jobs data for July, including lower-than-expected job additions and a rise in the unemployment rate, have negatively impacted the U.S. economy's outlook, raising fears about the Federal Reserve's ability to achieve a "soft landing" [2] Geopolitical Factors - Geopolitical tensions, particularly the ongoing conflict between Ukraine and Russia and escalating tensions between Israel and Iran, are contributing to market volatility [3] Investment Strategies - In light of market uncertainty, investors are reassessing their positions and strategies, with a focus on a "relative price strength" strategy to identify stocks outperforming their peers despite broader market weakness [4] - The relative price strength strategy emphasizes the importance of earnings growth and valuation multiples to determine a stock's performance relative to its peers [5] Screening Parameters - Key screening parameters for identifying potential investment opportunities include: - Relative % Price change over 12 weeks, 4 weeks, and 1 week greater than 0 [9] - Positive current-quarter estimate revisions over the last four weeks [9] - Zacks Rank equal to 1 (Strong Buy) for stocks that have historically outperformed the S&P 500 [10] - Current price greater than or equal to $5 and average 20-day volume greater than or equal to 50,000 for liquidity [11] Company Highlights - Spotify Technology S.A. (SPOT): Expected 2024 earnings growth of 314.2% year-over-year, with a market capitalization of $64.4 billion and shares up 143.2% in a year [12] - Interface, Inc. (TILE): Projected 2024 earnings growth of 28%, with a market capitalization of $946.5 million and shares up 58.8% in a year [13] - Tenet Healthcare Corporation (THC): Expected EPS growth rate of 18.3% over three to five years, with shares up 105.1% in a year [15] - Dorman Products (DORM): Projected 2024 earnings growth of 35.5%, with shares increasing by 21.1% in a year [16] - Matson, Inc. (MATX): Expected earnings growth of 18.5%, with shares up 37.4% in a year [17]