Zacks.com featured highlights Lancaster Colony, On Holding, Rent the Runway, 5E Advanced Materials and Motus GI

Zacks.com featured highlights Lancaster Colony, On Holding, Rent the Runway, 5E Advanced Materials and Motus GI

Zacks Equity Research
5 min read

For Immediate Release

Chicago, IL – February 6, 2024 – Stocks in this week’s article are Lancaster Colony LANC, On Holding ONON, Rent the Runway RENT, 5E Advanced Materials FEAM and Motus GI MOTS.

Why You Should Bet on 5 Top-Ranked Stocks with Rising P/E

Investors often opt for the approach that involves stocks with a low price-to-earnings (P/E) ratio. This strategy is based on the notion that the lower the P/E ratio is, the higher the stock value. The reasoning behind this is straightforward — when a stock's current market price does not adequately reflect its higher earnings, it suggests potential for growth.

But there is more to this whole P/E story. Because not only low P/E, stocks with a rising P/E can also fetch strong returns. In this regard, investors can bet on the likes of Lancaster Colony, On Holding, Rent the Runway, 5E Advanced Materials and Motus GI.

Rising P/E: A Useful Tool

The concept is that as earnings rise, so should the price of the stock. As forecasts for expected earnings come in higher, strong demand for the stock should continue to push up its prices. After all, a stock's P/E gives an indication of how much investors are ready to shell out per dollar of earnings.

Suppose an investor wants to buy a stock with a P/E ratio of 30. This means that he is willing to shell out $30 for only $1 worth of earnings as he expects earnings of the company to rise at a faster pace in the future owing to strong fundamentals.

So, if the P/E of a stock is rising steadily, it means that investors are assured of its inherent strength and expect some strong positives out of it.

Also, studies have revealed that stocks have seen their P/E ratios jump over 100% from their breakout point in the cycle. So, if you can pick stocks early in their breakout cycle, you can end up seeing considerable gains.

Here are five out of the 19 stocks:

Lancaster Colony: The Zacks Rank #2 company is a manufacturer and marketer of specialty food products for the retail and foodservice markets. You can see the complete list of today’s Zacks #1 Rank stocks here.

The year-over-year earnings growth estimate of LANC for the upcoming quarter is 49.44%.

On Holding: The Zacks Rank #2 holding company operates through its subsidiaries. It provides footwear and sports apparel that include ultralight and stretchable fabrics and accessories.

The year-over-year earnings growth estimate of ONON for the upcoming quarter is 450.0%.

Rent the Runway: This Zacks Rank #2 company provides a shared designer closet. It offers a wide assortment for every occasion, from evening wear and accessories to ready-to-wear, workwear, denim, casual, maternity, outerwear, blouses, knitwear, loungewear, jewelry, handbags, activewear, ski wear, home goods and kidswear.

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