GM and 4 Stocks With Relative Price Strength to Buy Now

Zacks highlights five Zacks Rank #1 stocks showing relative price strength amid easing inflation and hopes for further monetary easing: Agnico Eagle (AEM, market cap $87.5B; 2025 EPS estimate +8.8% over 60 days; shares up ~100% Y/Y), General Motors (GM, market cap ~ $70B; 2025 EPS estimate +9.9% over 60 days; shares +36% Y/Y), Great Lakes Dredge & Dock (GLDD, market cap $868.4M; 2025 EPS estimate +7.8%; Zacks sees 31% 2025 EPS growth; shares +2.1% Y/Y), BrightSpring Health Services (BTSG; 3–5 year EPS growth 53.3%; 2025 EPS est rose from $0.90 to $1.12 in 60 days; shares +89.1% Y/Y) and Everus Construction (ECG, market cap $4.7B; 2025 EPS est +23% over 60 days; shares +38.7% Y/Y). The screen requires positive 1-, 4- and 12-week relative performance vs. the S&P 500, positive Q1 estimate revisions, Zacks Rank #1 and VGM Score A/B, signaling analyst-driven upward revisions and leadership stocks that may attract flows in a constructive macro backdrop.

Analysis

Market structure: The current momentum favors rate-sensitive, defensive commodities (AEM) and niche service contractors (GLDD, ECG) plus high-growth healthcare services (BTSG) because easing Fed expectations should lower real yields and the USD over the next 1–3 months, lifting gold and commodity-linked names. Auto leader GM benefits from pricing power and positive estimate revisions, but faces secular capex (EV) that will keep capital intensity high; relative winners are cash-generative miners and project contractors with backlog visibility. Cross-asset: a 25–50bp implied easing priced into swaps would likely push 2‑yr yields down ~10–25bp, compress implied equity vols 10–20% and weaken the USD, supportive for AEM and commodity-linked equities.

Risk assessment: Tail risks include a Fed hawkish surprise (no cut) that would spike real yields and slam gold (-10–20% downside on AEM if real yields rise 50bp), regulatory/Medicaid audit risk for BTSG, and project execution or vessel downtime for GLDD/ECG. Time horizons: momentum trade window is immediate (days–6 weeks), earnings/estimate revisions matter in the short-term (1–3 months), structural exposures (EV capex for GM, aging demographics for BTSG) play out over 6–24 months. Hidden dependencies: names with small free-float (GLDD) amplify flows and can gap 20%+ on single contracts or misses.

Trade implications: Direct plays — establish modest longs in AEM and selective GLDD exposure using defined-risk options: AEM 2–3% position or 3‑6 month call spreads (buy Aug 2026 1.10–1.30x ATM spread) sized to 2% NAV; GLDD 1–1.5% via 3‑6 month call spreads or stock with 15% stop. BTSG: buy 1.5% equity and hedge with 60‑day puts (cost <1% NAV) given binary reimbursement risk. GM: accumulate 1–2% on pullbacks below the 50‑day MA or on continued positive EPS revisions and sell 30‑60 day covered calls to monetize theta. ECG: tactical 1% exposure to transmission backlog, scale on >20% contract wins.

Contrarian angles: The crowd is long momentum — downside if real yields reflate; AEM has doubled and is vulnerable if gold slips under $2,050 (-15% threshold). BTSG’s 100% y/y EPS call is already priced; a single reimbursement swing would be punitive (stock could fall 30–40%). GLDD’s low liquidity creates asymmetric risk/reward — use options, not large outright positions. Historical parallel: 2019–21 showed gold and small-resource names rally into Fed easing then correct sharply on yield surprises; plan exits at specific macro triggers (Fed dot or CPI prints).

Key Decisions for Investors

• Establish a 2–3% NAV long position in AEM via stock or staggered 3–6 month call spreads; add another 1% if spot gold breaks above $2,200/oz; trim to breakeven if gold closes below $2,050 on a weekly basis.
• Buy a 1–1.5% NAV exposure to GLDD using a 3–6 month call-spread (defined risk) rather than large equity exposure; set a hard stop-loss at 15% mark-to-market or reduce if a material offshore contract is delayed beyond 60 days.
• Take a 1.5% long position in BTSG but simultaneously buy 60‑day OTM puts (cost target <1% NAV) to protect against reimbursement/regulatory shocks; increase only after a confirmed beat and guidance raise on next quarterly report (within 30–90 days).
• Accumulate GM up to 1–2% NAV on pullbacks to the 50‑day MA or if next two quarterly EPS revisions continue upward (>5% cumulative raise); sell 30–60 day covered calls to generate income (target 3–5% annualized premium capture).
• Avoid large outright positions in ECG (>1% NAV) and use event-driven sizing: add up to 1% if company reports >20% uplift in transmission/distribution backlog or wins contracts covering >12 months of revenue; otherwise prefer short-dated options/arbitrage instruments due to liquidity risk.