The principle behind momentum investing is to follow a stock’s recent trend in either direction. Investors will essentially be “buying high, but intending to sell even higher” in the ‘long’ context. Taking advantage of price patterns in a company is critical with this practice; once a stock establishes a route, it is more than likely to stay on that path. The idea is for a stock to follow a set route, which will result in timely and lucrative trades.
Even while momentum is a well-known stock attribute, defining it can be difficult. The debate over which metrics to focus on is lengthy, but the Zacks Momentum Style Score, which is part of the Zacks Style Scores, helps us handle this issue.
We’ll look at W.P. Carey (WPC), which has a Momentum Style Score of B right now. We also go over some of the Momentum Style Score’s primary factors, such as price changes and earnings forecast revisions.
It’s also worth noting that Style Scores can be used in conjunction with the Zacks Rank, our stock ranking methodology with a proven track record of outperformance. W.P. Carey is presently ranked #2 by Zacks Investment Research (Buy). Stocks with Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market for one month, according to our research.
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Let’s take a look at some of the components of WPC’s Momentum Style Score to see why this real estate investment trust could be a good momentum selection.
Looking at a stock’s short-term price action is a good approach to see if it has momentum since it can represent both current interests in the stock and whether buyers or sellers now have the upper hand. Comparing security to its industry can also be beneficial; this can show investors which companies are the finest in a certain field.
WPC shares have increased by 0.56 percent in the last week, while the Zacks REIT and Equity Trust – Another industry has decreased by 0.17 percent. Shares are also looking well over a longer time horizon, with a monthly price change of 6.47 percent that compares favorably to the industry’s 2.07 percent.
While every stock can experience a price increase, it takes a true winner to outperform the market regularly. W.P. Carey’s stock has risen 13.49 per cent in the last quarter and 15.77 percent in the last year. In comparison, the S& P 500 has only moved 0.36 percent and the Dow has only moved 6.78 percent.
WPC’s average 20-day trading volume is also worth noting for investors. The 20-day average offers a decent price-to-volume baseline; a rising stock with above-average volume is normally bullish, whereas a decreasing stock with above-average volume is typically bearish. WPC has an average of 825,374 shares over the previous 20 days.
Earnings Prospects
The Zacks Momentum Style Score takes into account a variety of factors, including estimate revisions and price movement. Earnings estimates are also important to the Zacks Rank, and a nice path here can be optimistic for investors. This is something we’ve lately noticed with WPC.
For the whole year, only one earnings forecast has moved higher in the last two months, while none has moved down. WPC’s consensus estimate increased from $5.07 to $5.21 in the last 60 days as a result of these revisions. In the coming fiscal year, one estimate has been revised upwards, while no downward revisions have been made in the same time frame.
Conclusion
With all of these factors in mind, it’s no surprise that WPC is rated a #2 (Buy) stock with a B Momentum Score. W.P. Carey should be on your shortlist if you’re looking for a new pick that’s poised to rise shortly.
“Single Best Pick to Double” is named by Zacks.
Five Zacks analysts have chosen their favourite stock among many to surge +100% or more in the months ahead. Sheraz Mian, Director of Research, chooses one of the five to have the most explosive upside of all.
It’s a little-known chemical company that’s increasing 65 per cent year over year while being extremely inexpensive. Retail investors might leap in at any time, given the unwavering demand, climbing 2022 earnings projections, and $1.5 billion set aside for repurchasing shares.
This firm could match or even outperform other recent Zacks’ Stocks Set to Double, such as Boston Beer Company, which soared +143.0% in less than 9 months, and NVIDIA, which soared +175.9% in a year.
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