The U.S. stock market continues to ride a strong bull run, fueled by economic resilience and growing confidence among business leaders. CEO confidence surged to an index of 60 in first-quarter 2025, signaling a shift toward “confident optimism.” The economy expanded at a healthy 2.8% in fourth-quarter 2024, supported by a robust labor market. Meanwhile, the Federal Reserve’s 1% rate cut last year has eased borrowing costs, encouraging both business expansions and consumer spending—key drivers of market growth. With inflation trending toward the Fed’s 2% target, investors remain optimistic about further monetary easing in 2025.
Amid this favorable backdrop, the momentum in stocks is expected to continue, albeit with some fluctuations. Several stocks have posted impressive gains over the past year, and investors are eager to capitalize on new opportunities. One of the best strategies in this environment is focusing on relative price strength—identifying stocks that outperform their peers. As market trends strengthen, investing in high-performing stocks with strong relative price momentum can offer an edge in navigating this ongoing bull market.
At this stage, investors would be wise to consider stocks like Pitney Bowes PBI, The Hanover Insurance Group THG, EnerSys (ENSENS) and First Financial Corporation THFF based on their relative price strength.
Relative Price Strength Strategy
Earnings growth and valuation multiples are indeed important for investors to determine a stock's ability to offer considerable returns. However, these are also essential for determining whether a stock’s price performance is better than its peers or the industry average.
If a stock’s performance is lacking that of the broader groups, despite impressive earnings growth or valuation multiples, then something must be wrong.
It’s always advisable to stay away from these stocks and bet on those that are outperforming their respective industry or benchmark. This is because betting on a winner always proves to be lucrative.
Then again, it is imperative that you determine whether or not an investment has relevant upside potential when considering stocks with significant relative price strength. Stocks delivering better than the S&P 500 for 1 to 3 months, at least, and having solid fundamentals indicate room for growth and are the best ways to go about this strategy.
Finally, it is crucial to find out whether analysts are optimistic about the upcoming earnings of these companies. In order to do this, we have added positive estimate revisions for the current quarter’s (Q1) earnings to our screen. When a stock undergoes an upward revision, it leads to additional price gains.
Screening Parameters
Relative % Price change – 12 weeks greater than 0
Relative % Price change – 4 weeks greater than 0
Relative % Price change – 1 week greater than 0
(We have considered those stocks that have been outperforming the S&P 500 over the last 12 weeks, four weeks and one week.)
% Change (Q1) Est. over 4 Weeks greater than 0: Positive current-quarter estimate revisions over the last four weeks.
Zacks Rank equal to 1: Only Zacks Rank #1 (Strong Buy) stocks — that have returned more than 26% annually over the last 26 years and surpassed the S&P 500 in 23 of the last 26 years — can get through. You can see the complete list of today’s Zacks #1 Rank stocks here.
Current Price greater than or equal to $5 and Average 20-day Volume greater than or equal to 50,000: A minimum price of $5 is a good standard to screen low-priced stocks, while a high trading volume would imply adequate liquidity.
VGM Score less than or equal to B: Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential.
Here are the four stocks that made it through the screen
Pitney Bowes: Based in Stamford, CT, this global technology company provides SaaS shipping solutions, mailing innovations, financial services and e-commerce solutions. The Zacks Consensus Estimate for 2025 earnings of Pitney Bowes indicates 47.6% growth. PBI has a VGM Score of A.
Pitney Bowes beat the Zacks Consensus Estimate for earnings in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 96.6%, on average. PBI shares have surged 177.4% in a year.
The Hanover Insurance Group, Inc.: Founded in 1852 and based in Worcester, MA, it is a property-casualty insurance provider offering personal, commercial and specialty coverage through its core segments, including standard lines and specialty units. The Zacks Consensus Estimate for 2025 earnings of The Hanover Insurance Group indicates 7.7% growth. THG has a VGM Score of B.
The Hanover Insurance Group beat the Zacks Consensus Estimate for earnings in three of the last four quarters and met in the other. It has a trailing four-quarter earnings surprise of roughly 21.7%, on average. THG shares have risen 20.2% in a year.
EnerSys: Based in Reading, PA, the company manufactures, markets and distributes various industrial batteries. ENS’ expected EPS growth rate for three to five years is currently 18%, which compares favorably with the industry's growth rate of 12.4%. The company has a VGM Score of B.
The Zacks Consensus Estimate for EnerSys’ fiscal 2025 earnings per share indicates 19.8% year-over-year growth. Over the past 60 days, the Zacks Consensus Estimate for its fiscal 2025 earnings has moved up 4.5%. ENS shares have gained 12.8% in a year.
First Financial Corporation: Based in Terre Haute, IN, it is a financial holding company with around $5 billion in assets. Operating more than 65 branches, it provides banking, lending, trust and insurance services across Illinois, Indiana, Kentucky and Tennessee. The Zacks Consensus Estimate for 2025 earnings of First Financial Corporation indicates 39% growth. The company has a VGM Score of B.
Over the past 30 days, the Zacks Consensus Estimate for First Financial Corporation’s 2025 earnings has moved up 7.1%. The company has a market capitalization of $601.3 million. THFF shares have gone up 38.6% in a year.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpPitney Bowes Inc. (PBI) : Free Stock Analysis Report
The Hanover Insurance Group, Inc. (THG) : Free Stock Analysis Report
Enersys (ENS) : Free Stock Analysis Report
First Financial Corporation Indiana (THFF) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
