Why Webster Financial (WBS) is a Top Momentum Stock for the Long-Term

Core Insights - Zacks Premium offers various tools to help investors make informed decisions and enhance their confidence in the stock market [1] - The Zacks Style Scores provide a unique rating system for stocks based on value, growth, and momentum characteristics, aiding investors in selecting securities with high potential for market outperformance [2][3] Zacks Style Scores - Stocks are rated from A to F based on their value, growth, and momentum characteristics, with A indicating the highest potential for outperformance [3] - The Value Score identifies attractive stocks using ratios like P/E, PEG, and Price/Sales, focusing on undervalued stocks [3] - The Growth Score evaluates stocks based on projected and historical earnings, sales, and cash flow to find those with sustainable growth [4] - The Momentum Score helps investors capitalize on price trends, using factors like one-week price change and monthly earnings estimate changes [5] - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors seeking value, growth, and momentum [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to simplify portfolio building [7] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +23.62% since 1988, significantly outperforming the S&P 500 [8] - There are over 800 stocks rated 1 or 2, making it essential for investors to utilize Style Scores to narrow down choices [9] Investment Strategy - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] - Stocks with a 3 (Hold) rank should also have A or B Scores to maximize upside potential [10] - The direction of earnings estimate revisions is crucial; stocks with lower ranks and declining forecasts pose higher risks [11] Company Spotlight: Webster Financial (WBS) - Webster Financial Corporation, based in Stanford, CT, operates through three segments, providing various banking and financial services [12] - Currently rated 3 (Hold) with a VGM Score of B, WBS has a Momentum Style Score of A and has seen a 17% increase in shares over the past four weeks [12][13] - Recent earnings estimates for fiscal 2025 have been revised upward, with the Zacks Consensus Estimate increasing by $0.07 to $5.78 per share, alongside an average earnings surprise of +1.6% [13]