MEssentially, omentum investing is an exception to the “buy low and sell high” idea. Investors who follow this style of investing are generally not interested in betting on cheap stocks and waiting a long time for them to rally. Instead, they believe that “buying high and selling high” is the way to make a lot more money in less time.
Everyone likes to bet on fast trending stocks, but determining the right entry point is not easy. These stocks often lose momentum when their future growth potential doesn’t justify their inflated valuation. In this phase, investors find themselves invested in stocks that have little or no upside or even a downside. So betting on a stock just by looking at traditional momentum metrics can sometimes be risky.
A safer approach might be to invest in cheap stocks with recent price momentum. While the Zacks Momentum Style Score (which is part of the Zacks Style Sheet Music system) helps identify stocks with high momentum by paying close attention to trends in a stock’s price or earnings, our “Quick Momentum to Bargain” screen is handy for spotting fast-moving stocks that are still down. an attractive price.
Interface (TILE) is one of many great candidates who have crossed the screen. While there are many reasons why this stock is a great choice, here are the most important:
Growing investor interest in a stock is reflected in its recent price rally. A price change of 8.9% over the past four weeks positions this carpet tile company’s stock well in this regard.
While any stock can see a spike in price for a short period, it takes a real dynamic player to deliver positive returns over a longer period. TILE also meets this criterion, as the stock has gained 9.5% over the past 12 weeks.
Additionally, TILE’s momentum is fast, as the title currently has a beta of 1.78. This indicates that the stock is moving 78% higher than the market in both directions.
Given this price performance, it’s no surprise that TILE has a Momentum Score of B, indicating that now is a good time to enter the stock to take advantage of momentum with the highest probability of hit.
In addition to a favorable Momentum Score, an upward trend in earnings estimate revisions helped TILE earn a Zacks #1 (Strong Buy) ranking. Our research shows that the momentum effect is quite strong among Zacks Rank #1 and #2 stocks. This is because as hedge analysts increase their earnings estimates for a stock, more and more investors take interest in it, helping its price run to continue. You can see the full list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>
More importantly, despite its fast momentum characteristics, TILE is trading at a reasonable valuation. In terms of the price-to-sales ratio, which is considered one of the best valuation indicators, the stock looks quite cheap now. TILE is currently trading at 0.68 times its sales. In other words, investors only have to pay 68 cents for every dollar of sale.
So, TILE seems to have plenty of room to run, and that too at a brisk pace.
In addition to TILE, there are several other stocks currently running through our “Fast-Paced Momentum at a Bargain” screen. You can consider investing there and start looking for the newest stocks that meet these criteria.
It’s not the only screen that could help you find your next winning stock pick. Depending on your personal investing style, you can choose from over 45 Zacks Premium Screens that are strategically created to beat the market.
However, keep in mind that the key to a successful stock picking strategy is to ensure that it has produced profitable results in the past. You can easily do this with the help of Zacks search assistant. As well as allowing you to test the effectiveness of your strategy, the program comes with some of our most successful stock picking strategies.
Free: Top Actions for the $30 Trillion Metaverse Boom
The Metaverse is a leap forward for the internet as we know it now – and it will make some investors rich. Like the Internet, the metaverse is set to transform the way we live, work, and play. Zacks has written a new special report to help readers like you aim for big profits. Metaverse – What is it? And how to take advantage of these 5 pioneering actions reveals specific actions set to soar as this emerging technology grows and expands.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.