Bet on 5 Top-Ranked Stocks With Rising P/E to Boost Your Portfolio

Core Viewpoint - The article discusses the investment strategy of selecting stocks based on their price-to-earnings (P/E) ratios, emphasizing that both low and rising P/E stocks can yield strong returns [1][2]. Group 1: P/E Ratio Insights - A low P/E ratio suggests that a stock's market price does not reflect its earnings potential, indicating growth opportunities [1]. - Rising P/E ratios can also indicate strong demand for a stock as earnings expectations increase, leading to higher stock prices [3][4]. - Stocks can experience P/E ratio increases of over 100% from their breakout points, presenting significant investment opportunities if identified early [5]. Group 2: Stock Screening Criteria - The article outlines specific criteria for selecting stocks with increasing P/E ratios, including: - Current year EPS growth estimates should be greater than or equal to the previous year's actual growth [7]. - Price changes over shorter timeframes should exceed those over longer timeframes, indicating consistent price increases [7][8]. - A minimum 20% price increase from the breakout point is preferred, but should not exceed 100% to avoid potential reversals [8]. Group 3: Selected Stocks - The screening process narrowed down potential stocks to 53, with notable mentions including: - Constellation Brands (Zacks Rank 2) with an average four-quarter earnings surprise of 5.30% [9][10]. - Edgewell Personal Care (Zacks Rank 2) with an average four-quarter earnings surprise of 86.79% [10]. - Rent the Runway (Zacks Rank 2) with an average four-quarter earnings surprise of 9.20% [10]. - Medpace (Zacks Rank 2) with an average four-quarter earnings surprise of 14.68% [11]. - Canoo (Zacks Rank 2) with an average four-quarter earnings surprise of 14.76% [11].