5 Relative Price Strength Stocks With Momentum on Their Side

U.S. stocks ended August on a softer note, but the S&P 500 still rose 2.6% in August and stayed near its recent record high as renewed U.S.-Iran tensions lifted oil prices while Treasury yields remained elevated. The article argues the uptrend looks intact and highlights potential broadening into cyclical/AI beneficiaries if growth and business investment continue. It also screens for relative strength names with positive earnings estimate revisions, citing Q1/Q2 support from analyst upward revisions—e.g., Paycom 2026 EPS growth estimate at 28.8% (+10.9% over 60 days), Invesco at 38.9% (+8.9%), and Valero at 283.6% (+37.1%).

Analysis

The screen is basically a momentum checklist, but the macro overlay matters more than the Zacks labels. In a market where oil and yields are both drifting higher, the cleaner winners are balance-sheet-light businesses with pricing power or direct commodity leverage; the more fragile names are long-duration software and anything depending on cheap discount rates. That makes VLO and IVZ more tradable than PAYC on a near-term basis, while RCMT is mostly a high-beta capex proxy rather than a true fundamental compounder.

Second-order effects matter: if crude stays bid, the immediate beneficiaries are upstream energy and select refiners, but airlines, parcel/logistics, and consumer discretionary margins get hit before equities fully re-rate. For VLO, the key question is whether product cracks widen enough to offset higher feedstock costs; if not, the move can reverse quickly even as the stock screens strong. For IVZ, the real driver is not rates alone but AUM beta plus cash/yield inflows; if equities keep grinding up, operating leverage can surprise to the upside over 1-3 months.

Contrarianly, the consensus may be over-indexing on recent relative strength and underestimating mean reversion in a crowded factor basket. PAYC’s estimate upgrades are helpful, but elevated Treasury yields cap multiple expansion; that trade needs rates to stop rising. RELY is the cleanest structural story in the group, but it is also the least helped by the current oil/yield backdrop, so it is more of a secular hold than a catalyst-driven long unless volume data re-accelerates.

Key Decisions for Investors

• Tactically long VLO for 2-4 weeks only if Brent holds above the recent shock level and refining cracks do not compress; use a tight stop if crude retraces or product spreads soften. This is a relative-strength trade, not a core energy thesis.
• Pair long IVZ / short TROW over 1-3 months as a risk-on AUM beta trade: IVZ has more operating leverage if equities remain firm, while TROW is more vulnerable to fee pressure and slow net flows. Falsify if market breadth rolls over or net outflows accelerate at IVZ.
• Avoid chasing PAYC here; wait for a pullback or a yield peak. Long-duration software usually needs Treasury yields to stabilize before estimate revisions translate into multiple expansion, so the reward/risk is poor if the 10Y keeps grinding higher.
• Treat RCMT as a small-cap capex momentum trade only on confirmation from volume and backlog commentary; otherwise leave it alone. Illiquidity can amplify downside if the business-investment cycle pauses.
• Watch RELY for a deeper pullback entry rather than buying into strength; it has the best secular profile in the group, but the near-term catalyst path is weaker than VLO/IVZ unless remittance volumes or take rates re-accelerate.