Momentum investing is all about capitalizing on a stock’s recent trend, whether it’s moving upwards or downwards. In the case of ‘long’ investments, this essentially means ‘buying high, but hoping to sell even higher.’ For investors following this strategy, identifying and riding the wave of a stock’s price trend is crucial. Once a stock establishes a clear direction, it’s more likely to continue moving in that direction, potentially leading to timely and profitable trades.
While many investors are attracted to momentum stocks, defining it precisely can be challenging. There’s a lot of debate about which metrics are the most reliable indicators of future performance. The Zacks Momentum Style Score helps to address this issue by providing a clear assessment of a stock’s momentum potential.
Let’s take a closer look at Ball Corporation (BALL), a company that currently boasts a Zacks Momentum Style Score of A. We’ll delve into the key aspects of this score: price change and earnings estimate revisions. It’s important to note that Style Scores complement the Zacks Rank, our stock rating system with a proven track record of outperformance. Currently, Ball holds a Zacks Rank of #2 (Buy). Our research shows that stocks with a Zacks Rank of #1 (Strong Buy) or #2 (Buy) and a Style Score of A or B consistently outperform the market over the next month.
Is Ball Poised to Outperform the Market?
To determine if BALL is a promising momentum pick, let’s examine some key Momentum Style elements. Analyzing a stock’s short-term price activity is a good starting point, as it reflects current interest and whether buyers or sellers hold the upper hand. It’s also insightful to compare a stock’s performance to its industry, revealing the top performers in a particular sector.
For BALL, shares have climbed 2.64% over the past week, while the Zacks Containers – Metal and Glass industry has gained 0.1% in the same timeframe. Looking at the longer picture, BALL’s monthly price change of 4.02% compares favorably to the industry’s 4.02% performance. Considering longer-term price metrics, such as performance over the last three months or year, can provide valuable insights. Ball’s shares have risen 9.66% over the past quarter and have gained 28.02% in the last year. In comparison, the S&P 500 has only moved 2.71% and 27.66%, respectively.
Investors should also pay close attention to BALL’s average 20-day trading volume. Volume is a valuable metric in various ways, and the 20-day average establishes a solid price-to-volume baseline. A rising stock with above-average volume is generally a bullish sign, while a declining stock with above-average volume is typically bearish. BALL currently averages 1,265,351 shares traded over the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Importantly, estimate revision trends are also central to the Zacks Rank. A positive trajectory here can be a promising sign, and we’ve recently observed this with BALL. Over the past two months, 4 earnings estimates have been revised upwards for the full year, compared to none being revised downwards. These revisions have helped boost BALL’s consensus estimate, increasing from $3.09 to $3.12 in the past 60 days.
Looking ahead to the next fiscal year, 5 estimates have been revised upwards, while no downward revisions have occurred during the same period.
Bottom Line
Considering all these elements, it’s no surprise that BALL is a #2 (Buy) stock with a Momentum Score of A. If you’re searching for a promising stock with the potential for near-term growth, make sure to keep Ball on your shortlist.
