Home Most Popular Investing This Retailer’s Unexpected Rise into Bullish Territory

This Retailer’s Unexpected Rise into Bullish Territory

0
This Retailer’s Unexpected Rise into Bullish Territory

In today’s volatile market, finding stocks that outperform can be a challenge. While there are countless indicators to choose from, the key is to keep things simple. More often than not, complex strategies fail to deliver consistent results. Instead, let’s explore a three-step process to narrow down our options and identify stocks with the best profit potential.

The Zacks Industry Rank: Uncovering Leading Industry Groups

At Zacks, we provide the tools to help investors identify market leaders. Our Zacks Industry Rank highlights the top industry groups that contain these leading stocks. By tracking the earnings estimate revisions of the underlying stocks within each group, we can determine which industries are experiencing positive momentum. Take, for example, the Zacks Retail – Home Furnishings industry, which is currently ranked in the top 39% out of approximately 250 industries. Not only has this industry outperformed the market with a 15.6% return this year, but it also holds favorable valuation characteristics. This makes it a promising candidate to consider for potential investment.

Rising Earnings Estimates: A Powerhouse Indicator

Among the most influential factors impacting stock prices are rising earnings estimates. Our research shows that stocks experiencing significant upward revisions are the ones that perform the best. In the case of the Zacks Retail – Home Furnishings industry, Williams-Sonoma (WSM) stands out as a Zacks Rank #2 (Buy) stock. Williams-Sonoma, known for its specialty retail brands like Pottery Barn and West Elm, has been consistently exceeding earnings expectations. With analysts increasing their EPS estimates for the company, it’s a clear sign of its potential for future growth.

Relative Strength: The Measure of Outperformance

To outperform the market, we must invest in stocks that are already outperforming. Relative strength analysis is a valuable tool that helps us gauge how well an investment has fared against a benchmark like the S&P 500. Looking at the performance of Williams-Sonoma (WSM) vis-à-vis the S&P 500, we can see a pattern of consistent outperformance over the past several months. This further strengthens the case for considering WSM as a potential investment.

By focusing on stocks within leading industry groups, tracking rising earnings estimates, and identifying relative strength, we can narrow down our list of stocks to those with the greatest profit potential. With earnings season heating up, it’s crucial to leverage tools like those provided by Zacks Investment Research to uncover market leaders like Williams-Sonoma (WSM). Don’t miss out on this opportunity to potentially profit from their continued success.