Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [1] - Identifying the right entry point for momentum stocks is challenging, and investors may end up with expensive shares that have limited upside [1] Group 2: Bargain Stocks with Momentum - Investing in bargain stocks that have recently shown price momentum may be a safer strategy [2] - The Zacks Momentum Style Score is useful for identifying strong momentum stocks, while the 'Fast-Paced Momentum at a Bargain' screen helps find attractively priced fast-moving stocks [2] Group 3: Case Study - Gap (GAP) - Gap (GAP) has shown a four-week price change of 3.7%, indicating growing investor interest [3] - Over the past 12 weeks, GAP's stock gained 12.5%, and it has a beta of 2.17, suggesting it moves 117% higher than the market [4] - GAP has a Momentum Score of B, indicating a favorable time to invest [5] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [6] - GAP is trading at a Price-to-Sales ratio of 0.60, meaning investors pay 60 cents for each dollar of sales, indicating a reasonable valuation [6] Group 4: Additional Opportunities - Besides GAP, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [7] - Zacks offers over 45 Premium Screens tailored to different investing styles, which can help identify winning stock picks [8]
Despite Fast-paced Momentum, Gap (GAP) Is Still a Bargain Stock