5 Names With Relative Price Strength to Ride the Rally Now

The equity market is extending its rally, with the S&P 500 hitting a new record high, driven by positive trade news, including a US-Japan deal unlocking $550 billion in investments, and robust economic data such as stronger-than-expected retail sales and declining jobless claims. Amid this favorable backdrop and ongoing earnings season momentum, investors are advised to focus on stocks exhibiting relative price strength, specifically those outperforming the S&P 500 for 1-3 months with positive earnings estimate revisions. Five such stocks identified are Western Digital (WDC), Flowserve (FLS), OPENLANE (KAR), AngloGold Ashanti (AU), and Jabil (JBL), all demonstrating strong growth prospects and market outperformance.

Analysis

The equity market is demonstrating significant upward momentum, with the S&P 500 reaching new record highs. This rally is underpinned by tangible macroeconomic catalysts, including a major US-Japan trade agreement projected to unlock $550 billion in new investments and favorable progress on trade with other key partners. The bullish sentiment is further supported by strong domestic economic data, specifically a better-than-expected rise in retail sales and a decline in jobless claims, suggesting robust consumer health. In this environment, the analysis advocates for a strategy centered on relative price strength, identifying companies that are outperforming the broader market and show positive forward-looking indicators. The article screens for stocks with consistent price outperformance, a Zacks Rank #1, and upward earnings estimate revisions, yielding five specific names. Among them, AngloGold Ashanti (AU) and Western Digital (WDC) stand out for their exceptional fiscal 2025 earnings growth forecasts of 125.8% and 2,465%, respectively. Jabil (JBL) and OPENLANE (KAR) exhibit strong year-over-year share price gains of 108% and 44%, while Flowserve (FLS) and Jabil both show projected multi-year EPS growth rates (14.2% and 16.6%) that exceed their industry averages. The positive estimate revisions for AU, FLS, and JBL in the last 60 days add a layer of fundamental support to their price momentum.

Key Decisions for Investors

• Given the strong market momentum fueled by positive trade and economic data, investors should consider prioritizing stocks exhibiting high relative price strength combined with positive earnings estimate revisions.
• Evaluate long positions in Jabil (JBL) and AngloGold Ashanti (AU), as they demonstrate a potent combination of significant year-over-year share price appreciation and recent upward revisions to their 2025 earnings estimates.
• For a higher-risk, catalyst-driven opportunity, assess Western Digital (WDC), whose extraordinary 2,465% forward EPS growth forecast could drive significant share price upside if its recent earnings beat momentum continues.
• Investors should remain vigilant regarding macroeconomic indicators, as any reversal in trade negotiation sentiment or weakening in consumer data could rapidly undermine the current momentum-driven market leadership.