Despite Fast-paced Momentum, Sally Beauty (SBH) Is Still a Bargain Stock

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum if their valuations exceed future growth potential, leading to potential losses for investors [2] - A safer approach may involve investing in bargain stocks that have recently shown price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Case Study - Sally Beauty (SBH) - Sally Beauty (SBH) has shown a significant price increase of 30.9% over the past four weeks, indicating growing investor interest [4] - Over the past 12 weeks, SBH's stock gained 55.8%, with a beta of 1.3, suggesting it moves 30% more than the market [5] - SBH has a Momentum Score of B, indicating a favorable time to invest based on its momentum [6] Group 3: Earnings Estimates and Valuation - SBH has received upward revisions in earnings estimates, earning a Zacks Rank 2 (Buy), which is associated with strong momentum effects [7] - The stock is currently trading at a Price-to-Sales ratio of 0.36, suggesting it is undervalued at 36 cents for each dollar of sales [7] Group 4: Additional Opportunities - Besides SBH, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]