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3 Top-Ranked Stocks Defying Market Challenges

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Relative strength is a key metric for investors seeking stocks that have outperformed the market or a relevant benchmark. By identifying stocks with favorable price action, investors can position themselves in strong market trends where buyers are dominant.

For investors interested in recent momentum, there are three stocks that stand out: HSBC Holdings (HSBC), Live Nation Entertainment (LYV), and Super Micro Computer (SMCI). Let’s take a closer look at each of these stocks.

Live Nation Entertainment

Live Nation Entertainment is currently ranked #1 (Strong Buy) by Zacks. The company has seen positive earnings estimate revisions across various timeframes, with its current fiscal year showing a notable 16% increase in the past two months.

Live Nation Entertainment has successfully recovered its revenue from pandemic lows and has experienced recent growth. In its latest quarterly report, the company reported $5.6 billion in sales, marking a 27% improvement compared to the same period last year.

Zacks Investment Research
Image Source: Zacks Investment Research

The growth trajectory is expected to continue, with earnings forecasted to increase by 57% in the current year, accompanied by a 21% rise in sales. Looking ahead to FY24, earnings are projected to jump by 70%, accompanied by a 7% increase in revenue.

HSBC Holdings

HSBC Holdings is a global banking and financial services firm with a strong presence in Europe, North America, the Middle East, and other regions. HSBC is ranked #2 (Buy) by Zacks, with increasing earnings expectations for its current and next fiscal years.

HSBC’s dividend metrics make it an attractive option for investors, with its shares currently yielding 4.9%, nearly double the Zacks Finance Sector average. Additionally, the company maintains a sustainable payout ratio, representing 37% of its earnings.

Zacks Investment Research
Image Source: Zacks Investment Research

Value-conscious investors may also be drawn to HSBC, as reflected in its β€œA” Value Style Score. Currently trading at a forward 12-month earnings multiple of 5.2X, which is half its five-year median of 10.2X, HSBC shares present an appealing valuation.

Super Micro Computer

Super Micro Computer specializes in the design, development, manufacturing, and sale of energy-efficient, application-optimized server solutions. The company holds a favorable Zacks Rank #1 (Strong Buy), with significant increases in earnings expectations.

Zacks Investment Research
Image Source: Zacks Investment Research

Super Micro Computer has shown impressive growth, with sales reaching $7.1 billion in FY23, which is 113% higher than FY20. Its latest quarterly revenue of $2.2 billion marks a 33% YoY increase and a 70% sequential increase.

Considering the company’s growth trajectory, its current forward 12-month earnings multiple of 17.8X appears reasonable. The company is expected to achieve 31% EPS growth and a 50% increase in revenue in its current year (FY24).

Bottom Line

Investors who seek stocks with relative strength often aim to ride momentum and benefit from favorable market trends. In the past month, all three stocks mentioned above – HSBC Holdings, Live Nation Entertainment, and Super Micro Computer – have delivered market-beating returns.

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