Momentum investors are all about capitalizing on the trend. They don’t focus on ‘buy low, sell high,’ instead opting for ‘buying high and selling higher.’ The key is to identify stocks with strong upward momentum, but it can be tricky to find the right entry point. These fast-moving stocks can quickly lose their steam when their growth potential can’t justify their inflated valuations. That’s why focusing solely on traditional momentum parameters can be risky.
However, there’s a way to find fast-moving stocks that are still reasonably priced. By combining the Zacks Momentum Style Score, which tracks price and earnings trends, with a ‘Fast-Paced Momentum at a Bargain’ screen, we can uncover gems like Angi (ANGI).
Angi stands out for several reasons. First, it reflects strong investor interest with a 16% price increase over the past four weeks. While short-term price spikes are common, it takes a truly strong momentum player to sustain positive returns over a longer period. Angi has done just that, gaining 4.5% over the past 12 weeks.
Further emphasizing its momentum, Angi has a beta of 2. This means the stock moves twice as much as the market in either direction, highlighting its fast-paced nature. These positive factors have earned Angi a Momentum Score of B, suggesting a favorable entry point to capitalize on its momentum.
Adding to its appeal, Angi has a Zacks Rank #1 (Strong Buy), driven by upward revisions in earnings estimates. Our research shows a strong correlation between momentum and Zacks Rank #1 and #2 stocks. As analysts increase their earnings forecasts, more investors take notice, driving the stock’s price upward.
Despite its strong momentum, Angi is still attractively priced. Its Price-to-Sales ratio, a key valuation metric, indicates that it’s currently trading at 0.90 times its sales. This means investors are paying just 90 cents for each dollar of revenue, making it a very compelling buy.
Overall, Angi presents a compelling investment opportunity, combining fast-paced momentum with a reasonable valuation. This suggests the stock has significant potential for continued growth, making it an attractive addition to any momentum investor’s portfolio.
