The age-old adage, “the trend is your friend,” is a guiding principle for many short-term investors and traders. However, identifying and capitalizing on sustainable trends can be a challenge. Often, trends reverse before investors can exit their positions, resulting in short-term losses. To mitigate this risk and ensure profitable trades, it’s essential to consider factors like strong fundamentals, positive earnings estimates, and other indicators that suggest continued momentum in a stock.
Investors looking to capitalize on stocks currently on the move may find the “Recent Price Strength” screen particularly helpful. This screen is designed to identify stocks that are experiencing an upward trend backed by robust fundamentals, and trading near the upper end of their 52-week high-low range, a sign of bullish sentiment.
Terumo Corp. (TRUMY) is one such stock that has passed this screen, showcasing compelling reasons for consideration as a “trend” investment. Over the past 12 weeks, TRUMY has experienced a significant price increase, demonstrating investors’ sustained willingness to pay a premium for its potential upside. This upward momentum is further supported by a 9.7% price increase over the past four weeks, solidifying the stock’s ongoing trend.
Moreover, TRUMY is currently trading at 91.2% of its 52-week high-low range, suggesting it may be on the verge of a breakout.
Looking beyond the price action, TRUMY boasts a strong fundamental foundation. It currently holds a Zacks Rank #2 (Buy), placing it within the top 20% of the over 4,000 stocks ranked by Zacks based on trends in earnings estimate revisions and earnings per share (EPS) surprises – key indicators of a stock’s near-term price movement. The Zacks Rank system, which classifies stocks into five groups (from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell)), has a proven track record, with Zacks Rank #1 stocks achieving an average annual return of +25% since 1988.
Adding further weight to TRUMY’s fundamental strength is its Average Broker Recommendation of #1 (Strong Buy), signifying the brokerage community’s high optimism regarding the stock’s near-term performance. This confluence of positive price action and strong fundamentals suggests that the upward trend in TRUMY may persist for some time.
While this analysis provides insights into TRUMY’s current standing, it’s crucial to remember that investing involves inherent risks. Before making any investment decisions, thorough research, due diligence, and seeking professional financial advice are essential.
