Singapore markets open in 6 hours 59 minutes
  • Straits Times Index

    3,041.29
    -79.29 (-2.54%)
     
  • S&P 500

    4,579.38
    -75.89 (-1.63%)
     
  • Dow

    34,523.20
    -612.74 (-1.74%)
     
  • Nasdaq

    15,514.73
    -268.11 (-1.70%)
     
  • BTC-USD

    57,434.60
    -1,193.76 (-2.04%)
     
  • CMC Crypto 200

    1,461.82
    +19.04 (+1.32%)
     
  • FTSE 100

    7,059.45
    -50.50 (-0.71%)
     
  • Gold

    1,775.50
    -9.70 (-0.54%)
     
  • Crude Oil

    65.87
    -4.08 (-5.83%)
     
  • 10-Yr Bond

    1.4580
    -0.0720 (-4.71%)
     
  • Nikkei

    27,821.76
    -462.16 (-1.63%)
     
  • Hang Seng

    23,475.26
    -376.98 (-1.58%)
     
  • FTSE Bursa Malaysia

    1,513.98
    +3.41 (+0.23%)
     
  • Jakarta Composite Index

    6,533.93
    -74.36 (-1.13%)
     
  • PSE Index

    7,200.88
    -77.56 (-1.07%)
     

Are You a Momentum Investor? This 1 Stock Could Be the Perfect Pick

  • Oops!
    Something went wrong.
    Please try again later.
·5-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores?

The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value Score

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth Score

While good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum Score

Momentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM Score

If you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank

The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +25.41% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.

As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Aptiv PLC (APTV)

Aptiv PLC is one of the leading global technology and mobility company which mainly serves the automotive sector. It is a designer and manufacturer of vehicle components as well as provider of electrical, electronic and safety technology solutions to the global automotive market. The company delivers end-to-end smart mobility solutions, active safety and autonomous driving technologies and provides enhanced user experience and connected services.

APTV is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Momentum investors should take note of this Business Services stock. APTV has a Momentum Style Score of B, and shares are up 5.5% over the past four weeks.

Two analysts revised their earnings estimate higher in the last 60 days for fiscal 2021, while the Zacks Consensus Estimate has increased -$0.01 to $3.72 per share. APTV also boasts an average earnings surprise of 21.4%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, APTV should be on investors' short list.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Aptiv PLC (APTV) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting