5 Stocks With Recent Price Strength to Tap Market Rally

By Nalak Das –

The U.S. stock market has performed fairly well year to date despite the coronavirus onslaught over the last few months. Wall Street has performed fairly well so far in 2020 after recovering impressively from the pandemic-led bear market. At present, all the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are in positive territory year to date.

The Dow slipped to bear territory on Mar 11 and was joined by the S&P 500 and the Nasdaq Composite a day later. The downtrend continued till Mar 23 when all the three major stock indexes slumped. Wall Street has witnessed a V-shaped recovery since Mar 23 barring fluctuations in September and October, which helped it to exit the coronavirus-induced short bear market and form a new bull market.

On Dec 4, the three above-mentioned large-cap centric indexes along with the mid-cap specific S&P 400 and small-cap centric Russell 2000 and S&P 600 indexes recorded all-time highs. This impressive turnaround was predominantly driven by the astonishing growth of large-cap technology stocks together with the cyclical reopening stocks on COVID-19 vaccine hopes.

At this stage, wouldn’t it be a safer strategy to look for stocks that are winners and have the potential to gain further?

Sounds Good? Here’s How to Execute It:

One should primarily target stocks that have freshly been on a bull run. Actually, stocks seeing price strength recently have a high chance of carrying the momentum forward.

If a stock is continuously witnessing an uptrend, there must be a solid reason or else it would have probably crashed. So, looking at stocks that are capable of beating the benchmark that they have set for themselves seems rational.

However, recent price strength alone cannot create magic. Therefore, you need to set other relevant parameters 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.

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.

Average Broker Rating 1: 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 have narrowed down the search from over 7,700 stocks to just 14.

Here we present five out of those 14 stocks:

Aviat Networks Inc. AVNW designs, manufactures and sells an array of wireless networking products, solutions, and services in North America, Africa, the Middle East, Europe, Russia, Latin America, and the Asia Pacific.

The stock price has soared 61% in the past four weeks. The company has expected earnings growth of 95.4% for the current year (ending June 2021). The Zacks Consensus Estimate for the current year has improved 18% over the last 30 days.

Merchants Bancorp MBIN operates as a diversified bank holding company in the United States. It operates through the Multi-family Mortgage Banking, Mortgage Warehousing, and Banking segments.

The stock price has jumped 27.1% 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 has improved 33% over the last 60 days.

Honda Motor Co. Ltd. HMC develops, manufactures, and distributes motorcycles, automobiles, power products, and other products in Japan, North America, Europe, Asia, and internationally. It operates through four segments: Motorcycle Business, Automobile Business, Financial Services Business, and Life creation and Other Businesses.

The stock price has climbed 14.5% in the past four weeks. The company has expected earnings growth of 97.4% for the current year. The Zacks Consensus Estimate for the current year has improved by 25.3% over the last 30 days.

APi Group Corp. APG provides commercial life safety solutions and industrial specialty services primarily in the United States. It operates through three segments: Safety Services, Specialty Services, and Industrial Services.

The stock price has surged 11.9% in the past four weeks. The company has expected earnings growth of 26.3% for next year. The Zacks Consensus Estimate for the current year has improved by 11.8% over the last 30 days.

Matson Inc. MATX provides ocean transportation and logistics services. Its Ocean Transportation segment offers ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Alaska, and Guam, as well as to other island economies in Micronesia.

The stock price has gained 4.7% in the past four weeks. The company has expected earnings growth of 94.8% for the current year. The Zacks Consensus Estimate for the current year has improved 24% over the last 30 days.

Get ready for blowout Q3 results in container shipping

American Shipper
by Greg Miller

Preliminary Matson numbers point to big gains for larger carriers

“We knew it was going to be good, but dadgum …,” exclaimed Stifel analyst Ben Nolan upon seeing the preliminary third-quarter 2020 results from Matson (NYSE: MATX).

Matson’s disclosures offer the first signals of how solid Q3 2020 earnings will be for container lines across the board. Container-line profits exceeded expectations in Q2 2020, a period when volumes were weak. In the third quarter, volumes and rates surged — and not just in the trans-Pacific trade.

“The stars are aligning for container shipping: historic consolidation, rational capacity management and now a fast bounce-back in demand post-lockdown,” wrote Jefferies analyst David Kerstens in report published this week.

Matson’s upside surprise

Matson is primarily in the Hawaii and Alaska Jones Act trades, but also runs China-U.S. services called CLX and CLX+. After market close on Thursday, Matson said it expected Q3 2020 earnings of $1.55-$1.60 per share, far exceeding the Wall Street consensus for 96 cents. Expected ocean transport operating income of $84.5 million-$86.5 million is double last year’s number.

Matson’s China volumes spiked 125% year-on-year, which the company attributed to a shift from air freight to premium ocean service, e-commerce demand and tight U.S. inventories.

“While rates may not be able to hold their current levels … volumes remain very high. Thus, we are expecting continued strength in the fourth quarter,” said Nolan.

Matson’s shares jumped 15% on Friday. The stock price has doubled since mid-May.

Exposure to trans-Pacific upside

Matson’s exposure to the trans-Pacific route was around 5,800 twenty-foot equivalent units (TEUs) per week in Q3 2020. This pales in comparison to the larger carriers.

Alphaliner analyzed the top carriers’ capacity on the trans-Pacific route as of Sept. 30. It found that the COSCO Group ranked highest in terms of volume, with an average weekly capacity of 89,050 TEUs. The group includes COSCO Shipping and OOCL, both listed in Hong Kong.

France’s CMA CGM — which has publicly traded U.S.-dollar-denominated bonds — came in second, with 74,200 TEUs. Japan’s ONE took third with 61,200 TEUs. And Denmark-listed giant Maersk — which has American depository receipts trading in the U.S. (OTC: AMKBY) — had the fourth-highest exposure, 59,000 TEUs per week.

Interestingly, when looking at the top 10 carriers in terms of volume, Israel’s ZIM, the company that ranked 10th, had the highest exposure as a percentage of total deployments. It deploys 52% of its global fleet in the trans-Pacific.

ZIM is planning an IPO and is in the midst of buying back outstanding bond debt, according to Alphaliner. “ZIM may not find a better time in the cycle to attempt an IPO,” said Alphaliner, which noted that ZIM failed at three previous IPO attempts in 2008, 2011 and 2016, respectively.

Q3 customs data: bullish

Inbound volumes to the U.S. West Coast were exceptionally strong in the third quarter. According to investment bank Jefferies, the upside from a historic inventory restocking phase has just begun.

FreightWaves’ SONAR platform features data collected from U.S. Customs on the number of maritime import shipment customs filings per day (regardless of volume), calculated as a seven-day moving average.

The countrywide data (SONAR: CSTM.USA) shows the number of filings exceeded levels seen in the past two years for about two-thirds of Q3 2020. In contrast, the number of customs filings in Q2 2020 exceeded the prior two years’ levels for only about a quarter of that reporting period.

Q3 rate data: even more bullish

Asia-West Coast spot rates remain near record highs, despite the recent Golden Week holiday in China.

The Freightos Baltic Daily Index assessed Thursday’s rate from China to the West Coast (SONAR: FBXD.CNAW) at $3,841 per forty-foot equivalent unit (FEU), very close to the high. The Shanghai Containerized Freight Index (SCFI) puts this week’s Shanghai-Los Angeles rate at $3,848 per FEU, essentially flat week-on-week (down 0.3%).

SeaIntelligence Consulting CEO Lars Jensen pointed out in an online post that if one takes normal Golden Week seasonality into account, “the spot market actually strengthened slightly.”

Looking at the third-quarter rates as a whole, the data shows that spot China-West Coast rates were roughly double Q2 2020 levels and almost triple rates in Q3 2019. Furthermore, rate strength is not limited Asia-U.S. trade.

“The trans-Pacific is not the only trade that witnessed hefty rate increases,” said Alphaliner. “The evolution is even more spectacular between Shanghai and Santos [Brazil]. Unexpectedly high cargo demand has also pushed up spot rates on other North-South routes” including Shanghai to Durban, South Africa, and to Lagos, Nigeria, it added.

According to the SCFI, rates from Shanghai to Santos were $3,952 per TEU this week, seven times the rate in late August. Last week, Shanghai-Durban hit a record high of $1,737 per TEU and Shanghai-Lagos hit a record high of $3,293 per TEU.

Alexander & Baldwin, Inc. Q1 2010 Earnings Call Transcript — Seeking Alpha

The Last Sugar Mill in Hawaii
HC&S Puunene Maui
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Alexander & Baldwin, Inc. (ALEX)

Q1 2010 Earnings Call Transcript

May 4, 2010 5:00 pm ET


Suzy Hollinger – Director, IR

Stan Kuriyama – President & CEO

Matt Cox – President, Matson Navigation Company, Inc.

Norb Buelsing – President, A&B Properties, Inc.

Chris Benjamin – SVP, CFO & Treasurer; General Manager, HC&S


William Horner – Stephens Incorporated

Sloan Bohlen – Goldman Sachs

Sheila McGrath – KBW

Brendan Maiorana – Wells Fargo

Tom Wilson – Wilson Capital Management

Tom Spiro – Spiro Capital Management



Good day, ladies and gentlemen. Welcome to the first quarter Alexander & Baldwin earnings conference call. My name is O'Meara and I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will be conducting a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn this conference over to your host for today’s call, Ms. Suzy Hollinger, Director of Investor Relations. Please proceed.

Suzy Hollinger

Thank you, operator. Aloha and welcome to Alexander & Baldwin's first quarter 2010 earnings call. On the call with me today are Stan Kuriyama, A&B's President and CEO; Chris Benjamin, A&B's CFO and also General Manager of HC&S; Norb Buelsing, President of A&B Properties; and joining us from Matson's headquarters in Oakland is Matt Cox, President of Matson Navigation Company.

Before we commence, please note that statements in this call and presentation that set forth expectations or predictions are based on facts and situations that are known to us as of today, May 04, 2010. Actual results may differ materially due to risks and uncertainties such as those described on pages 17 through 26 of our 2009 Form 10-K and our other subsequent filings with the SEC. Statements in this call and presentation are not guarantees of future performance.

Slides from this presentation are available for download at our website www.alexanderbaldwin.com. You will see an icon at the top of the website to direct you to the appropriate section for download.

This slide provides an agenda for our presentation, after which we will take your questions. We will start with Stan who will comment on the performance for the quarter.

Stan Kuriyama

Thank you, Suzy. I'm pleased to report that A&B posted a solid first quarter and a positive start to 2010. Net income was significantly higher in the first quarter at $17 million or $0.42 per share compared to earnings in the first quarter of 2009 of $3 million or $0.07 a share.

As you'll note from this chart, operating results for all segments improved in the first quarter of 2010 with the exception of real estate leasing. Consolidated operating profit was $42 million in the quarter compared to $17 million a year ago. However, our first quarter '09 operating profit was impacted by a $6 million workforce reduction charge that did not recur in the first quarter of 2010.

Let me now brief you on the quarter highlights from each of our business units. In ocean transportation, our China service is benefitting from the recovery in both volume and rates. Volumes in particular were significantly higher than a year ago and rates are higher on a sequential basis. Matt will have more details for you later in the presentation.

Hawaii container volumes and rates were relatively flat in the quarter compared to last year. While we believe that material increases in volumes and rates are unlikely for the rest of the year, we are pleased that the Hawaii trade seems to have bottomed. Guam's performance was also stable for the quarter. Overall, operating profits in our ocean transportation business continue to benefit from the vessel deployment changes, workforce reduction, and other cost cutting and operating efficiencies implemented over the past two years.

First quarter operating results for MIL benefitted from a large movement for the Department of Defense, as well as from prior year's cost cutting measures. Some stabilization in MIL's intermodal business also occurred in the quarter. In real estate, we continue to observe demand and favorable pricing for quality commercial properties as evidenced by our sales of Mililani Shopping Center in January. This sale drove quarter results for this segment, as well as for the overall company.

Leasing, however, was challenged by several factors; the downward reset of market rents, lower occupancies in our Mainland portfolio, and the time lag between sales and acquisitions of properties in our 1031 exchange program. Norbert would be addressing this further in our presentation.

Agribusiness results improved in the quarter with losses declining by $800,000. However, we didn’t plan on harvesting any sugar in the first quarter, meaningful performance comparisons can't be made until the second quarter. As Chris will describe later, we continue to expect significant improvement for the full year and we recently learned federal grant monies will be made available to help us accelerate our bioenergy research at HC&S.