Momentum investing, a strategy that encourages buying high and selling even higher, stands in contrast to the traditional Wall Street mantra of ‘buy low and sell high.’ While tempting, chasing after fast-moving stocks can be risky, as their momentum can quickly fade if future growth doesn’t justify their inflated valuation. This is where a strategy like ‘Fast-Paced Momentum at a Bargain’ comes in handy. This screen identifies stocks exhibiting strong momentum while still maintaining attractive valuations.
Century Communities (CCS), a single-family homebuilder, is one such stock. The company’s recent price momentum reflects growing investor interest. With a 6.2% four-week price change, CCS is certainly attracting attention. More importantly, its momentum extends beyond short-term fluctuations. Over the past 12 weeks, CCS has gained 15.6%, highlighting its potential for sustained growth. This strong momentum is further emphasized by its beta of 1.86, indicating that the stock moves 86% higher than the market in either direction.
Given CCS’s impressive price performance, it’s no surprise that it boasts a Zacks Momentum Score of A, indicating a high probability of success for those entering the stock now. This positive momentum is further complemented by a Zacks Rank #2 (Buy), driven by upward revisions in earnings estimates.
The combination of momentum and positive earnings revisions is a powerful indicator. As analysts raise their earnings estimates, more investors become interested in the stock, fueling further price growth.
Crucially, despite exhibiting strong momentum, CCS remains reasonably valued. Its Price-to-Sales ratio, a key valuation metric, indicates that investors are only paying 73 cents for each dollar of sales, highlighting its potential for further growth.
Century Communities (CCS) appears to be a compelling momentum play at a bargain price. Its strong price performance, favorable Zacks scores, and reasonable valuation suggest that this stock has ample room to run, making it an attractive investment opportunity.
