U.S. stock markets have been enduring severe volatility over the past month. Wall Street’s recent turmoil is broad-based. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are in the negative territory year to date. The S&P 500 and the Nasdaq Composite are in fact, in a correction zone. Moreover, the mid-cap-centric S&P 400 is in the red and the small-cap benchmark Russell 2000 is in the bear territory, year to date.
Market participants remained concerned about the Trump administration’s tariff and trade-related policies and their impact on U.S. economic growth, especially on the inflation rate. Recently released several key economic data have clearly shown that the U.S. economy is weakening.
The resilient labor market has shown softness. The last released data for retail sales, industrial production, manufacturing PMI, housing sector data and consumer confidence and sentiment indexes came in well below expectations.
Consequently, a handful of stocks have shown price strength. We have primarily targeted stocks that have recently been on a bull run. Such stocks have a high chance of carrying the momentum forward.
Five such stocks are — DRDGOLD Ltd. DRD, GeneDx Holdings Corp. WGS, EverQuote Inc. EVER, HCI Group Inc. HCI and Alibaba Group Holding Ltd. BABA.
If a stock is continuously witnessing an uptrend, there must be a solid reason or it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.
However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed to create a successful investment strategy.
Here’s how you should create the screen to shortlist the current as well as the potential winners.
Percentage Change in Price (4 Weeks) greater than zero: This criterion shows that the stock has moved higher in the last four weeks.
Percentage Change Price (12 Weeks) greater than 10: This indicates that the stock has seen momentum over the last three months. This lowers the risk of choosing stocks that may have drawn attention due to the overwhelming performance of the overall market in a very short period.
Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
Average Broker Rating 1 or 2: This indicates that brokers are also highly hopeful about the stock’s future performance.
Current Price greater than 5: The stocks must all be trading at a minimum of $5.
Current Price/ 52-Week High-Low Range more than 85%: This criterion filters stocks that are trading near their respective 52-week highs. It indicates that these are strong enough in terms of price.
Just these few criteria narrowed down the search from over 7,700 stocks to just 11.
Let’s discuss five out of these 11 stocks here:
DRDGOLD Is a gold mining company, engaged in the extraction of gold from the retreatment of surface mine tailings in South Africa. DRD sells gold and silver bullion. DRD is involved in provision care and maintenance services, and operation of training center. Incontrovertibly bullish about its product, DRD recently concluded the extensive refocusing of its gold interests.
The stock price of DRDGOLD has jumped 34.6% in the past four weeks. It has an expected earnings growth rate of 29.3% for the current year (ending June 2025). The Zacks Consensus Estimate for current-year earnings has improved 19.1% over the past 30 days.
GeneDx Holdings is a genomics company that provides genetic testing services. WGS primarily offers pediatric and rare disease diagnostics with a focus on whole exome and genome sequencing, as well as data and information services. WGS is at the forefront of transforming healthcare through its industry-leading exome and genome testing and interpretation, fueled by rare disease data sets.
The stock price of GeneDx Holdings has climbed 29% in the past four weeks. The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 86.5% over the past 30 days.
EverQuote should continue to benefit from its exclusive data asset and technology, intensified focus on core P&C markets, streamlined operations and a strong financial profile that poise it for long-term growth. Solid performances at automotive and other insurance verticals, given auto carrier recovery and growth in revenue per quote request, bode well.
EVER expects to benefit from the shift to online insurance sales. EVER remains focused on the growth of consumer traffic and the addition of channels. EVER expects revenues between $155 million and $160 million for the first quarter of 2025.
The stock price of EverQuote has surged 22.7% in the past four weeks. The company has expected earnings growth of 34.1% for the current year. The Zacks Consensus Estimate for the current year earnings has improved 45.7% over the past 30 days.
HCI Group is a holding company that conducts its business activities through its subsidiaries. HCI is engaged in diverse business activities, including property and casualty insurance, information technology, real estate and reinsurance.
HCI provides property and casualty insurance. HCI’s insurance product includes property and casualty homeowners’ insurance, condominium-owners' insurance and tenants’ insurance for individuals owning property.
HCI’s shares have rallied 16.9% in the past four weeks. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 12.4% over the past 30 days.
Alibaba Group Holding third-quarter fiscal 2025 results benefited from the monetization of Taobao and Tmall Group, cloud businesses and AI-integrated products. BABA is riding on strong momentum in its international commerce retail business, driven by strength in AliExpress’ Choice.
The growing international commerce wholesale business, thanks to strength in cross-border-related value-added services, is a tailwind. Expanding China's wholesale commerce business is a positive for BABA. Robust local consumer services and Cainiao logistics services are further driving the top-line growth of BABA.
The stock price of Alibaba advanced 13.1% in the past four weeks. The company has expected earnings growth of 23.1% for the next year (ending March 2026). The Zacks Consensus Estimate for next-year earnings has improved 5.8% over the past 30 days.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
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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.
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EverQuote, Inc. (EVER) : Free Stock Analysis Report
HCI Group, Inc. (HCI) : Free Stock Analysis Report
DRDGOLD Limited (DRD) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
GeneDx Holdings Corp. (WGS) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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