Dynamic investing is essentially the opposite of the tried and tested Wall Street adage – “buy low and sell high”. Investors who follow this style of investing generally avoid betting on cheap stocks and waiting a long time for them to rally. Rather, they believe that one could make a lot more money in less time by “buying high and selling high”.
Everyone likes to bet on fast trending stocks, but determining the right entry point is not easy. These stocks often lose momentum when their future growth potential doesn’t justify their inflated valuation. In this phase, investors find themselves invested in stocks that have little or no upside or even a downside. So betting on a stock just by looking at traditional momentum metrics can sometimes be risky.
A safer approach might be to invest in cheap stocks with recent price momentum. While the Zacks Momentum Style Score (part of the Zacks Style Scores system) helps identify momentum stocks by paying close attention to trends in a stock’s price or earnings, our “Fast Momentum at a Bargain” screen ” is useful for spotting quick actions. moving stocks whose price remains attractive.
There are several stocks currently going through the screen and Sports and Outdoors Academy, Inc. (ASO) is one of them. Here are the main reasons why this stock is a great candidate.
Growing investor interest in a stock is reflected in its recent price rally. A price change of 28.9% over the past four weeks positions this company’s stock well in this regard.
While any stock can see a spike in price for a short period, it takes a real dynamic player to deliver positive returns over a longer period. ASO also meets this criteria, with the stock gaining 0.1% over the past 12 weeks.
Additionally, ASO’s momentum is fast, as the title currently has a beta of 1.81. This indicates that the stock is moving 81% higher than the market in either direction.
Given this price performance, it’s no surprise that ASO has a Momentum Score of A, indicating that now is the right time to enter the stock to take advantage of momentum with the highest probability. of success.
In addition to a favorable Momentum score, an upward trend in earnings estimate revisions helped ASO earn a Zacks No. 1 ranking (Strong Buy). Our research shows that the momentum effect is quite strong among Zacks Rank #1 and #2 stocks. This is because as hedge analysts increase their earnings estimates for a stock, more and more investors take interest in it, helping its price run to continue. You can see the full list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>
More importantly, despite its fast momentum characteristics, ASO is trading at a reasonable valuation. In terms of the price-to-sales ratio, which is considered one of the best valuation metrics, the stock looks pretty cheap now. ASO is currently trading at 0.50 times its sales. In other words, investors only have to pay 50 cents for every dollar of sale.
So ASO seems to have plenty of room to run, and that too at a fast pace.
In addition to ASO, there are several other stocks currently running through our “Fast-Paced Momentum at a Bargain” screen. You can consider investing there and start looking for the newest stocks that meet these criteria.
It’s not the only screen that could help you find your next winning stock pick. Depending on your personal investing style, you can choose from over 45 Zacks Premium screens that are strategically created to beat the market.
However, keep in mind that the key to a successful stock picking strategy is to ensure that it has produced profitable results in the past. You can easily do this with the help of Zacks search assistant. As well as allowing you to test the effectiveness of your strategy, the program comes with some of our most successful stock picking strategies.
Click here to sign up for a free trial of Research Assistant today.
Want the latest recommendations from Zacks Investment Research? Today you can download 7 best stocks for the next 30 days. Click to get this free report
Academy Sports and Outdoors, Inc. (ASO): Free Stock Analysis Report
To read this article on Zacks.com, click here.