Oil prices surge to two-week winning streak as Iran supply fears grip markets
When it comes to evaluating stocks, there’s no shortage of indicators investors can turn to in the effort to determine fair market value, buy-sell signals, and future price movements.
Those include commonly referenced technical indicators, such as the Relative Strength Index and Bollinger Bands, in addition to fundamental indicators including price-to-earnings (P/E) ratios, free cash flow, and profitability metrics like return on equity.
No matter which ones investors prefer, they’re best used in combination with one another, thereby painting a more complete picture of a particular equity. Now MarketBeat users can add another to their arsenal: the TradeSmith Health Indicator, which assesses stocks’ health based on price action and volatility using the proprietary Volatility Quotient to set risk thresholds.
The result is a stoplight-based tool that classifies stocks as Green (financially healthy and in a strong uptrend), Yellow (hold or watch), or Red (financially unhealthy stock and in a downtrend).
Based on backtesting, the indicator is rather effective. Stocks that find themselves in the Green Zone have shown a more than 23% average annualized return, while those in the Red Zone have annualized losses of 2.5%.
Currently, the following three stocks are soundly within TradeSmith’s Green Zone, offering investors a chance to combine the indicator with others to determine if they’re a good fit for buy-and-hold portfolios.
1. ExxonMobil: +6 Months in the TradeSmith Green Zone
After years of lagging the market, the energy sector is outperforming the S&P 500, leading all 11 sectors with a year-to-date (YTD) gain of nearly 26% versus the index’s YTD loss of 0.4%. Part of that has been driven by oil major ExxonMobil, whose shares have gained nearly 23% YTD.
Its forward P/E ratio of roughly 20 is better than the broad S&P 500’s P/E ratio of 28 as well as an improvement upon its trailing 12-month (TTM) P/E ratio of 22, suggesting that, despite a nearly 43% gain over the past year, shareholders are likely to enjoy more earnings per dollar invested over the subsequent year.
That is an alluring value proposition for a company that has beat analyst expectations for earnings per share (EPS) in six out of the last seven quarters, with ExxonMobil’s earnings expected to grow more than 21% next year, from $7.43 to $9.02 per share.
Underpinning ExxonMobil’s financial health, over the past 10 years, the company has averaged stable gross margins of 32.75%. Over the same period, the company’s average annual debt-to-equity (D/E) ratio stands at just 0.22 (for context, a D/E below 1 suggests conservative financing and higher financial stability). Specifically in XOM’s case, over the past decade, for every dollar of equity invested by shareholders, the company has only carried 22 cents of debt.
2. Citigroup: +8 Months in the TradeSmith Green Zone
Global financial services firm Citigroup has found itself in TradeSmith’s Green Zone since last July. Its forward P/E ratio of 14.45 is also an improvement upon its TTM P/E ratio of 15.62, both of which are better multiples than presented by the broad market.
As of 3 days ago, C’s financial health entered the Yellow zone, according to TradeSmith.
The stock is down more than 8% in 2026 as the financials sector struggled with a nearly 6% YTD loss—the worst among all 11 sectors of the S&P 500.
But analysts see strong upside over the next year, with an average 12-month price target of $127.25, representing a gain of nearly 17% from today’s price. That notion is supported by the MarketRank™ analysis, with Citigroup scoring higher than 97% of the companies evaluated by MarketBeat and ranking second out of 62 stocks in the financial services sector.
That high regard stems from sound underlying financials, including a run of earnings beats that has seen the company surpass analyst expectations in 11 out of the past 12 quarters dating back to Q1 2023. Citigroup’s earnings are expected to grow 25.5% next year, from $7.53 to $9.45 per share.
Over the past 10 years, Citigroup has had only one year of net income contraction, while averaging annualized profits of $10.8 billion.
3. NextEra Energy: +5 Months in the TradeSmith Green Zone
With a nearly 13% YTD gain, NextEra Energy—a regulated utility operations and competitive renewable energy generation business—has been securely in TradeSmith’s Green Zone for financial health since late last year.
The company’s forward P/E ratio of 24.51 is an improvement upon its TTM P/E ratio of 27.42, and analysts rate the stock a Moderate Buy. NextEra Energy’s earnings are expected to grow 7.61% next year, from $3.68 to $3.96 per share.
But one factor that underscores the Tradesmith health indicator is NextEra’s dividend, which currently yields 2.73% but has undergone an annualized five-year growth rate of 10.15%.
The company has achieved that dividend growth through substantial cash flow growth. Over the past decade, NextEra has seen its net cash from operating activities grow from $6.36 billion in 2016 to $12.48 billion in 2025, good for an increase of more than 96%. Over the same period, net income has grown from $2.9 billion to $6.83 billion—an increase of more than 135%.