3 Momentum Anomaly Stocks to Buy as Election Frenzy Hits Market

Market Overview - The U.S. equity markets have experienced significant volatility recently, driven by strong earnings from blue-chip technology stocks and a tight Presidential election race, leading to a stock market rally followed by a sharp decline [1] - Concerns regarding a potential rate cut by the Federal Reserve have also contributed to the market downtrend [1] Labor Market and Economic Conditions - The labor market showed soft conditions, with only 12,000 jobs added in October, significantly below the estimated 100,000 [2] - Escalating geopolitical tensions in the Middle East present a latent threat to market stability [2] Investment Strategies - In uncertain times, investors are turning to momentum stocks as a strategy to achieve sustained profits, particularly when traditional value or growth investing fails [2] - Momentum investing is based on the principle of "buying high and selling higher," capitalizing on established trends [3] Momentum Strategy Implementation - Momentum strategies have historically been alpha-generative across various market stages, though they can be challenging to implement due to the difficulty in detecting trends [4] - A screening strategy has been developed to identify fast-moving stocks that can yield significant gains [4] Screening Parameters for Momentum Stocks - The screening process includes selecting the top 50 stocks with the best percentage price change over the last 52 weeks to ensure steady appreciation [5] - From these, the bottom 10 performers over the past week are chosen to identify those experiencing short-term pullbacks [6] - Stocks with a Zacks Rank 1 (Strong Buy) are included, as they have a proven history of outperformance [6] - A Momentum Style Score of B or better is required, indicating optimal timing for stock acquisition [7] - Stocks must have a current price greater than $5 and be among the top 3000 by market capitalization to ensure stability [8] Featured Momentum Stocks - CAVA Group, Inc. has seen a stock surge of 286.5% over the past year but a decline of 4.6% in the past week, with a Momentum Score of A [8] - Carpenter Technology Corporation has rallied 129.3% in the past year but declined 7.2% in the past week, also holding a Momentum Score of A [9] - The Greenbrier Companies has experienced a 59.6% increase in stock price over the past year, with a recent decline of 4.8% and a Momentum Score of A [10]