Momentum investing is all about the idea of following a stock’s recent trend, which can be in either direction. In the “long context,” investors will essentially be “buying high, but hoping to sell even higher.” And for investors following this methodology, taking advantage of trends in a stock’s price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at Sphere Entertainment (SPHR), which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.
It’s also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Sphere Entertainment currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of “A or B” outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
In order to see if SPHR is a promising momentum pick, let’s examine some Momentum Style elements to see if this company holds up.
A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It’s also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For SPHR, shares are up 0.2% over the past week while the Zacks Media Conglomerates industry is flat over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 12.09% compares favorably with the industry’s 2.37% performance as well.
Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Over the past quarter, shares of Sphere Entertainment have risen 46.92%, and are up 132.1% in the last year. In comparison, the S&P 500 has only moved 3.98% and 16.97%, respectively.
‘ The preceding article may include information circulated by third parties ’
‘ Some details of this article were extracted from the following source finance.yahoo.com ’
