When stocks reach new highs and have improved earnings outlooks, they often continue to climb even higher. Investors can take advantage of this bullish trend by targeting stocks that are breaking out or nearing fresh highs.
Stock 1: Abercrombie & Fitch
Abercrombie & Fitch is a specialty retailer that offers premium casual apparel for men, women, and kids. Analysts have significantly raised their earnings expectations for the company, resulting in a Zacks Rank #1 (Strong Buy) rating. The upcoming release in late November shows a particularly bullish trend in earnings revisions.
The company posted impressive results in its latest quarter, with earnings exceeding the Zacks Consensus EPS Estimate by nearly 750%. The market responded positively to this, driving a surge in ANF shares post-earnings. This trend has been observed in back-to-back releases.
Stock 2: Consolidated Water Co.
Consolidated Water is a company involved in developing and operating sea-water desalination plants and water distribution systems. The company’s earnings outlook has significantly improved, resulting in a favorable Zacks Rank #1 (Strong Buy). The most recent quarter saw a huge 110% earnings per share beat and nearly 50% higher revenue than expected.
CWCO shares also offer a passive income stream, currently yielding a respectable 1.2% annually.
Stock 3: The Andersons
The Andersons is a regional grain merchandiser with diversified businesses in agriculture and plant nutrient formulation. The company’s earnings outlook has improved, earning it a favorable Zacks Rank #1 (Strong Buy). ANDE shares are undervalued and trade at a small 0.1X forward price-to-sales ratio.
Income-seeking investors will also find ANDE shares attractive, with a current annual yield of 1.4% and a sustainable payout ratio of 23%.
Stocks that are nearing or breaking 52-week highs often have significant momentum. Positive earnings estimates from analysts provide additional fuel for further growth. The Andersons ANDE, Abercrombie & Fitch ANF, and Consolidated Water Co. CWCO are three stocks that fit these criteria, offering both favorable price action and positive earnings outlooks.
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Disclaimer: The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.