3 Strong Value Stocks Riding Higher - And How to Find More

For those of us who prefer to invest with an edge grounded in fundamentals, the Piotroski F-Score has long been a reliable tool for separating the wheat from the chaff.

Developed by accounting professor Joseph Piotroski, the F-Score is a nine-point checklist designed to identify financially strong companies based on profitability, liquidity and operational efficiency.

While it’s a great way to find fundamentally sound stocks, the market is littered with cheap stocks that stay cheap. That’s where adding relative strength comes into play.

Relative strength is one of the simplest yet most effective tools in the trader’s arsenal. It measures how well a stock is performing relative to the broader market or a benchmark index.

High relative strength stocks are in demand, meaning the market is voting with its dollars in their favor.

The key is combining this with the deep value metrics of the Piotroski F-Score to find stocks that are not just fundamentally strong but also gaining momentum.

The beauty of this approach is that it weeds out value traps.

Here's how to do it yourself – and three great stocks that fit the criteria right now.

Too often, investors buy into stocks that look cheap on paper but continue declining because there's no catalyst for a turnaround. A company scoring an 8 or 9 on the Piotroski scale tells us the financial health is improving, but adding relative strength ensures that the stock is already catching a bid.

This is how we find winning stocks that are both fundamentally and technically positioned to outperform.

To put this into practice, start by screening for stocks with an F-Score of at least 7. This ensures we're looking at companies with solid fundamentals.

Then, sort by relative strength, favoring those in the top 20% of performers over the past six to twelve months.

The sweet spot is a high F-Score company that has already turned the corner and is seeing increasing demand from investors.

A perfect example of this strategy in action was the recovery of regional banks in the wake of 2024’s banking turmoil.

Many had strong balance sheets and improving fundamentals, yet their stocks languished for months. But once relative strength picked up, many of these names delivered triple-digit returns.

Investors who combined the Piotroski F-Score with relative strength were able to buy in just as the tide was turning.

Another great example right now is Republic Services RSG, a leading provider of waste collection, recycling and disposal services in the United States. As one of the largest players in the waste management industry, Republic Services operates a vast network of collection routes, transfer stations, landfills and recycling centers across the country. The company benefits from the essential nature of waste services, which ensures steady demand regardless of economic conditions.

With a focus on operational efficiency and sustainability initiatives, RSG has demonstrated consistent revenue growth, strong margins and disciplined capital allocation. These attributes contribute to its high Piotroski F-Score.

With a growing emphasis on renewable energy initiatives such as landfill gas-to-energy projects and advanced recycling capabilities, Republic Services continues to generate solid cash flow and maintain a strong financial position.

Coupled with its high relative strength, RSG has been a standout performer, reflecting both its fundamental strength and the market's recognition of its stability and growth potential.

Antero Midstream AM is another strong example.

As a leading natural gas midstream company, AM operates critical infrastructure that supports the transportation and processing of natural gas and natural gas liquids (NGLs). The company primarily serves Antero Resources, one of the largest natural gas producers in the Appalachian Basin.

Antero Midstream owns and operates a network of gathering pipelines, compression stations and water handling systems, providing essential services that ensure the efficient movement of natural gas from production sites to end markets. Its business model is underpinned by long-term, fee-based contracts, which provide stable cash flows and reduce exposure to commodity price fluctuations.

With a strong balance sheet, disciplined capital spending and a commitment to shareholder returns through dividends, AM has maintained a high Piotroski F-Score.

Additionally, its high relative strength suggests that investors recognize its resilience and attractive growth prospects, particularly as demand for natural gas infrastructure continues to rise in a transitioning energy market.

A final example is Howmet Aerospace HWM, a leading manufacturer of advanced engineered solutions for the aerospace and transportation industries.

Howmet specializes in high-performance aluminum and titanium components, fasteners and structural parts used in commercial and military aircraft, defense systems, and high-performance vehicles. With a robust presence in the growing aerospace sector, Howmet benefits from long-term contracts with major aircraft manufacturers like Boeing and Airbus.

The company has focused on operational efficiency, cost control and high-margin product lines, driving strong profitability and a high Piotroski F-Score.

Additionally, Howmet's emphasis on innovation in lightweight materials and precision manufacturing positions it well for continued industry demand.

Its strong financial health, coupled with a high relative strength, indicates that investors are recognizing its earnings potential and market leadership, making it a prime example of a winning stock using this strategy.

In markets that often punish fundamentals-only investors by keeping cheap stocks cheap, this strategy provides an edge.

It ensures that we're not just buying good businesses but also stocks that the market is willing to reward. In the long run, that's the combination that produces the best returns.

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