Buy 3 Momentum Anomaly Stocks as Markets Fall in the Last Leg of 2025
ZACKS·2025-12-18 15:56

Market Overview - The U.S. equity markets have experienced a downtrend, marked by a four-day losing streak due to concerns over economic health and high valuations of AI firms [1] - Job additions in November were better than expected at 64,000, surpassing the forecast of 45,000, yet the unemployment rate rose to a four-year high of 4.6%, raising doubts about the economy's state [1] Oil Market Impact - Crude oil prices in the U.S. have fallen to their lowest levels since 2021, influenced by a looming surplus in the market, adding to investor concerns [2] Investment Strategies - Investors are advised to consider momentum stocks as a strategy to navigate current market volatility, with examples including Dillard's, Inc. (DDS), Sanmina Corporation (SANM), and CommScope Holding Company, Inc. (COMM) [2] - Momentum investing is characterized by the principle of "buying high and selling higher," capitalizing on established trends [3] Momentum Stock Screening - A screening strategy has been developed to identify momentum anomaly stocks, focusing on the top 50 stocks with the best percentage price change over the last 52 weeks [5] - From these, the bottom 10 performers over the past week are selected to identify those experiencing short-term pullbacks [6] - Stocks with a Zacks Rank 1 (Strong Buy) and a Momentum Style Score of B or better are prioritized, indicating a higher probability of success [7] Selected Stocks - Dillard's, Inc. has seen a price increase of 49.1% over the past year but has declined by 11.4% in the past week, holding a Momentum Score of B [10] - Sanmina Corporation's stock has jumped 82.4% in the past year but fell by 15.6% in the past week, also with a Momentum Score of B [12] - CommScope has surged 189.9% over the past year but lost 11.8% in the past week, maintaining a Momentum Score of B [14]