The astonishing rally of the artificial intelligence (AI) trade has been suffering from persistent volatility over the past month. Extremely overstretched valuation of these stocks, unabated inflationary pressure due to fluctuations in crude oil prices resulting from geopolitical conflicts in the Middle East and growing expectations of a 25-basis point hike in the benchmark interest rate by the Fed in September are the primary reasons for recent AI trade volatility.Â
As a result, several stocks have shown price strength. We have primarily targeted stocks that have recently been on a bull run. These stocks have a high chance of carrying the momentum forward.
Five such stocks are — American Outdoor Brands Inc. AOUT, Cimpress plc CMPR, National Energy Services Reunited Corp. NESR, CTO Realty Growth Inc. CTO and Kiniksa Pharmaceuticals International plc KNSA.
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.
Screening Parameters:
Percentage Change in Price (4 Weeks) greater than zero: This criterion shows that the stock has moved higher in the last four weeks.Â
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.Â
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: This indicates that brokers are also highly hopeful about the stock’s future performance.Â
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 seven.
Let’s discuss five out of those seven stocks here:
American Outdoor Brands is a provider of outdoor products and accessories, including hunting, fishing, camping, shooting and personal security and defense products, for rugged outdoor enthusiasts.Â
AOUT produces products under the Caldwell, Crimson Trace, Wheeler, Tipton, Frankford Arsenal, Lockdown, BOG, Hooyman, Smith & Wesson Accessories, M&P Accessories, Thompson/Center Arms Accessories, Performance Center Accessories, Schrade, Old Timer, Uncle Henry, Imperial, BUBBA, UST, LaserLyte, and MEAT! brands.
The stock price of AOUT has jumped 35.8% over the past four weeks. The company has expected earnings growth of more than 100% for the current year (ending April 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 27.5% over the last 30 days.
Cimpress has benefited from strength across the Vista, National Pen and Upload & Print segments. CMPR’s Vista segment is benefiting from strong demand for promotional products, apparel and gifts, packaging and labels.Â
Reduced advertising spending is aiding the National Pen segment, while increasing order rates are supporting the Upload & Print segment. CMPR’s investments in technology and product innovation, along with higher orders and average order values, bode well. CMPR’s focus on cost-control measures will likely support its margin performance.
The stock price of Cimpress has appreciated 14.4% in the past four weeks. It has an expected earnings growth rate of 18.6% for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 0.2% over the last 30 days.
National Energy is one of the largest national oilfield services providers in the MENA and Asia Pacific regions. NESR helps its customers unlock the full potential of their reservoirs by providing Production Services such as Cementing, Coiled Tubing, Filtration, Completions, Stimulation and Fracturing, and Nitrogen Services.Â
NESR also helps its customers to access the reservoirs in a smarter and faster manner by providing Drilling and Evaluation services like Drilling Downhole Tools, Directional Drilling Fishing Tools, Testing Services, Wireline, Slickline, Fluids and Rig Services.
The stock price of National Energy has advanced 13.6% 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 the current year’s earnings has improved 1.8% over the last seven days.
CTO Realty is a real estate company, which owns income properties. CTO owns and operates a portfolio of high-quality, retail-based properties located primarily in higher growth markets in the United States. CTO also externally manages and owns a meaningful interest in Alpine Income Property Trust Inc., a publicly traded net lease REIT.
The stock price of CTO Realty has gained 8.2% in the past four weeks. It has an expected earnings growth rate of 13.7% for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 5.2% over the last 30 days.
Kiniksa Pharmaceuticals is a biopharmaceutical company developing and commercializing novel therapies for diseases with unmet need, with a focus on cardiovascular indications. KNSA develops and commercializes medical therapies in the United States, the United Kingdom, and internationally. KNSA offers ARCALYST, an interleukin-1alpha and 1beta cytokine trap for the treatment of recurrent pericarditis, a chronic autoinflammatory cardiovascular disease and cardiac sarcoidosis.
The stock price of Kiniksa Pharmaceuticals has increased 6.8% in the past four weeks. It has an expected earnings growth rate of 66.7% for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.8% over the last 30 days.
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