Core Viewpoint - Investors often prefer stocks with a low price-to-earnings (P/E) ratio, believing that a lower P/E indicates higher stock value and potential for growth [1][2] Group 1: P/E Ratio Insights - Stocks with a rising P/E ratio can also yield strong returns, indicating that as earnings rise, stock prices should follow suit [2][3] - A rising P/E ratio suggests investor confidence in a company's fundamentals and expected future earnings growth [4] - Historical data shows that 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 screening parameters for identifying stocks with increasing P/E include: - Current year EPS growth estimate should be greater than or equal to last year's actual growth [7] - Price changes over four weeks should exceed those over 12 weeks, and similarly for 12 weeks over 24 weeks, indicating consistent price increases [7][8] - Price change for 12 weeks should be at least 20% higher than for 24 weeks but not exceed 100%, signaling potential uptrends without overvaluation [8] Group 3: Selected Stocks - Four stocks identified with a Zacks Rank of 2 (Buy) include: - Context Therapeutics (CNTX): Focuses on women's oncology with an average four-quarter earnings surprise of 22.37% [9][10] - Blue Bird (BLBD): Engaged in school bus manufacturing with an average four-quarter earnings surprise of 49.64% [10] - Dycom Industries (DY): A specialty contractor in the telecom sector with an average four-quarter earnings surprise of 26.99% [10] - Leidos (LDOS): A leader in science and technology serving various markets, with an average four-quarter earnings surprise of 28.34% [11]
Bet on 4 Top-Ranked Stocks With Rising P/E for Solid Gains