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Zacks.com featured highlights: Summit Therapeutics, Commercial Vehicle Group, DragonWave, Townsquare Media and CONSOL Energy

Zacks Equity Research
Updated

For Immediate Release

Chicago, IL –July 25, 2017 - Stocks in this week’s article include Summit Therapeutics plc (OTCMKTS: SMMT – Free Report), Commercial Vehicle Group, Inc. (NASDAQ: CVGI – Free Report), DragonWave Inc. (NASDAQ: DRWI – Free Report), Townsquare Media, Inc. (NYSE: TSQ – Free Report) and CONSOL Energy Inc. (NYSE: CNX – Free Report).

5 Great Breakout Stocks Offering Excellent Returns

Investors with an active approach often utilize a breakout investment strategy in their quest for appreciably high returns. This involves zeroing in on stocks trading within a tight band and buying them when they move out of this band. In keeping with this approach, such stocks are sold whenever they move below this narrow band. If properly implemented, such a strategy has the ability to deliver impressive returns.

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Identifying Breakout Stocks

The essence of this strategy lies in calculating the support and resistance levels of a stock. The lower bound of a stock’s trading channel is its support level and it should be sold as soon as it threatens to fall lower. On the other hand, the ceiling is a stock's breakout level and it can gain substantially if it breaks the resistance level.

When a stock is close to its support level, demand is literally hitting the floor. On the other hand, demand rises when it is breaching its resistance level, signaling the right time to make a lucrative addition to your portfolio. The idea is to pick stocks which have just broken above their resistance barriers or are very closing to doing so.

Has a Breakout Really Occurred?

The primary risk associated with such a strategy is that the decision to buy an apparent breakout candidate has been incorrectly timed. When a stock moves above the resistance level, it should be a highly prized commodity for traders. However, whether such a breakout is at all genuine is another matter altogether.

For a bona fide breakout, the stock’s earlier resistance barrier should become its new support level. This only happens if the trading channel that has been established is tested by observing long-term price trends. The strength of the support and resistance levels can be ascertained only through such a study. Despite the risk of misidentification, correctly identifying such stocks can yield considerable returns, even at a price which may not seem attractive at first glance.

Screening Parameters

• Percentage price change over four weeks between 10% and 20% (Stocks which are showing considerable price increases, but whose gains are not excessive.)

• Current Price /52-Week High greater than or equal to 0.9 (Stocks which are trading 90% close to their 52-week highs.)

• Zacks Rank less than or equal to #2 (Only Strong Buy and Buy rated stocks can get through.)

• Beta for 60 months less than or equal to 2
(Stocks which move by a greater degree than the broader market but within a reasonable limit.)

• Current price less than or equal to $20 (Stocks which are reasonably priced.)

These criteria narrow down the universe of over 7877 stocks to only 11.

Here are the top five stocks that meet these criteria:

Summit Therapeutics plc (OTCMKTS: SMMT – Free Report ) is a biopharmaceutical company which discovers, develops and brings to the market unique medicines designed to treat genetic and infectious diseases. Summit Therapeutics has a Zacks Rank #1 (Strong Buy) and its expected earnings growth for the current year is 88%.

Commercial Vehicle Group, Inc. (NASDAQ: CVGI – Free Report) supplies interior systems, vision safety solutions and other cab-related products for the global commercial vehicle market. The company's expected earnings growth for the current year is 51.7%. It carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here .

DragonWave Inc. (NASDAQ: DRWI – Free Report) is a leading provider of high-capacity packet microwave solutions that drive next-generation IP networks. DragonWave has a Zacks Rank #2 (Buy) and its expected earnings growth for the current year is 47.7%.

Townsquare Media, Inc. (NYSE: TSQ – Free Report) is a local media and entertainment company. Townsquare Media has a Zacks Rank #2 and its expected earnings growth for the current year is 6.2%.

CONSOL Energy Inc. (NYSE: CNX – Free Report) is a multi-fuel energy producer and an energy services provider, primarily catering to the U.S. power producers. CONSOL Energy has a Zacks Rank #2 and its expected earnings growth for the current year is more than 100%.

You can get the rest of the stocks meeting these criteria by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and backtest them first before taking the investment plunge.

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 .

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here https://at.zacks.com/?id=112

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Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros .

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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer .

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Summit Therapeutics PLC (SMMT) : Free Stock Analysis Report
 
Commercial Vehicle Group, Inc. (CVGI) : Free Stock Analysis Report
 
DragonWave Inc (DRWI) : Free Stock Analysis Report
 
Townsquare Media, Inc. (TSQ) : Free Stock Analysis Report
 
CONSOL Energy Inc. (CNX) : Free Stock Analysis Report
 
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