Stocks soared on Tuesday morning  following the release of October CPI data that showcased cooling inflation. Prices were flat month-over-month, while core CPI edged 0.2% higher to come in below expectations.  

The bulls are now revving up their engines on bets that Jay Powell and the Fed are done raising rates. Wall Street is also growing more optimistic that the central bank will slowly start to cut interest rates in the back half of 2024.

More bears are likely getting flushed out of positions as the market continues to rip off its late October lows and higher above its 200-day and 50-day moving averages. Therefore, investors likely want to remain exposed to the upside potential to close out the year.

Now, of course, many investors might not want to ‘chase’ stocks at some lofty valuations. So today we show investors how to find stocks that offer a wonderful combination of strong value and improving earnings outlooks.

Screen Basics

The screen we are digging into today comes loaded with the Research Wizard and aims to sort through highly-ranked Zacks stocks to find some of the top value names.

This value-focused screen searches only for stocks that boast Zacks Rank #1 (Strong Buys) or #2 (Buys). It also focuses on stocks with price-to-earnings (P/E) ratios under the median for its industry. The screen also looks for stocks with price-to-sales (P/S) ratios under the median for its industry to help lock in relative value compared to its peers, since basing it off the wider market is not always the most useful tool.

The screen then digs into quarterly earnings rates above the median for its industry. This particular Zacks screen also uses a special blend of upgrades and estimates revisions to select the best seven stocks in this list.

The screen basics are listed below…

·       Only Zacks Rank #1 (Strong Buy) or #2 (Buy) Stocks

·       P/E (using 12-month EPS) - Under the Median for its Industry

·       P/S - Under the Median for its Industry

·       Percentage Change Act. EPS Q(0)/Q(-1)

·       Rating Change and Revisions Factors (to help narrow the list to the 7 best stocks in this list)

This strategy comes loaded with the Research Wizard and it is called bt_sow_value_method1. It can be found in the SoW (Screen of the Week) folder.

The screen is pretty simple, yet powerful. Here are two of the seven stocks that made it through this week's screen…

ArcBest (ARCB)

ArcBest is a supply chain logistics firm that boasts it offers access to 90% of U.S. LTL (less-than-truckload) capacity with its easy-to-use quote tool. The Fort Smith, Arkansas-headquartered firm is actively expanding its network and it posted back-to-back years of over 30% revenue growth. ArcBest is projected to see its adjusted earnings and revenue slip in 2023 as it faces that tough-to-compete-against stretch.