Chicago, IL – October 3, 2024 – Stocks in this week’s article are Adverum Biotechnologies ADVM, IceCure Medical ICCM, DarioHealth DRIO, Energous WATT and Virgin Galactic SPCE.
Bet on 5 Top-Ranked Stocks with Rising P/E
Investors often opt for the stock-picking approach that involves stocks with a low price-to-earnings (P/E) ratio. This strategy is based on the notion that the lower the P/E ratio, the higher the stock value. The reasoning behind this is straightforward — when a stock's current market price does not adequately reflect its higher earnings, it suggests potential for growth.
But there is more to this whole P/E story. Because not only low P/E, stocks with a rising P/E can also fetch strong returns. In this regard, investors can bet on the likes of Adverum Biotechnologies, IceCure Medical, DarioHealth, Energous and Virgin Galactic.
Rising P/E: A Useful Tool
The concept is that as earnings rise, so should the price of the stock. As forecasts for expected earnings come in higher, strong demand for the stock should continue to push up its prices. After all, astock's P/E gives an indication of how much investors are ready to shell out per dollar of earnings.
Suppose an investor wants to buy a stock with a P/E ratio of 30. This means that he is willing to shell out $30 for only $1 worth of earnings as he expects earnings of the company to rise at a faster pace in the future owing to strong fundamentals.
So, if the P/E of a stock is rising steadily, it means that investors are assured of its inherent strength and expect some strong positives out of it.
Also, studies have revealed that stocks have seen their P/E ratios jump over 100% from their breakout point in the cycle. So, if you can pick stocks early in their breakout cycle, you can end up seeing considerable gains.
Here are five out of the 45 stocks:
Adverum Biotechnologies: The Zacks Rank #2 company is a clinical-stage gene therapy company targeting unmet medical needs in ocular and rare diseases. You can see the complete list of today’s Zacks #1 Rank stocks here.
The average four-quarter earnings surprise of ADVM is 5.15%.
IceCure Medical: The Zacks Rank #2 company develops and markets an advanced liquid-nitrogen-based cryoablation therapy for the treatment of tumors by freezing, with the primary focus areas being breast, kidney, bone and lung cancer.
The average four-quarter earnings surprise of ICCM is 4.76%.
DarioHealth: The Zacks Rank #2 company creates mobile and digital tools. The company's product, the Dario Smart Diabetes Management Solution, is a platform for diabetes management, which combines the blood glucose meter, the native smartphone app, website portal and treatment tools to users living with diabetes, their doctors and healthcare systems.
The average four-quarter earnings surprise of DRIO is 53.22%.
Energous: The Zacks Rank #2 company is a developer of a disruptive wire-free charging technology.
The average four-quarter earnings surprise of WATT is 10.30%.
Virgin Galactic: The Zacks Rank #2 company is a vertically integrated aerospace company pioneering human spaceflight for private individuals and researchers.
The average four-quarter earnings surprise of SPCE is 18.28%.
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