Do You Like Momentum Stocks?
As Isaac Newton famously said “a body in motion stays in motion”.
That is as true in physics as it is in the stock market. That is why I am glad to share that we uncovered 22 different factors of momentum that are now inside the Zen Ratings model.
My goal is not to bore you by spelling out all 22 momentum indicators. Instead I have 3 key aspects to share with you:
1) Short Term & Long Term Momentum
Academic studies show how shaky it is to just focus on short term momentum as it may be nothing more than a quick sector rotation that reverses course leading to losses.
It is much better to be riding long term momentum that is typically based on improvements in the fundamentals of the company (in particular better than expected earnings growth).
This consistent momentum over time leads to much greater odds of share price gains in the near term making them very timely trades.
2) ONLY Profitable Indicators
The data science team that created the Zen Ratings investigated over 2,000 different indicators before narrowing down to the 115 remaining in the model.
The decision of which indicators to keep (and which to reject) was very simple.
Does this factor help to consistently beat the stock market?
Yes = In the Model
No = Rejected
The point being that the 22 momentum factors inside the Zen Ratings model were the ONLY momentum factors that consistently led to market beating stocks. And thus the ONLY momentum factors that matter.
3) The Proof is in the Pudding
The famed +32.52% average annual return for the Zen Ratings is certainly eye-catching. But it doesn't prove how good the system is at finding timely momentum stocks ready to bolt higher right now.
So today I conducted a quick study of all the A rated stocks since the start of 2023 that produced the most impressive gains in three months or less. Here are the top 5:
+215.7% QXO
+111.7% APP
+99.9% SHC (gains actually took place in just 27 days)
+70.2% POWL
+62.9% INSG
(Note none of the above stocks are currently A rated. More details further below on how to find the best momentum stocks now).
Of course it’s fairly easy to produce a list of just 5 big winners. But the cool thing is that, in this same time frame, we have had 221 A rated stocks produce double digit gains in 3 months or less.
It is this consistent outperformance that is the hallmark of the Zen Ratings model. And the 22 factors of Momentum play a large part in making it the place to find the best stocks to own now.
What to Do Next?
- Review all of your stocks to make sure they make the grade with the Zen Ratings.
Just go to WallStreetZen.com and use the search box to review your stocks 1 by 1.
- Find Better Stocks. Continue your search of stock tickers on WallStreetZen.com to add more with the best overall Zen Ratings. Especially those sporting A & B for Momentum.
Note that VERY SOON we will launch a suite of new tools to help make it easier to find the best stocks based upon the Zen Ratings.
Not just the ability to screen with the ratings, but daily upgrades/downgrades, portfolio tracking with ratings, and even an industry rank showing the best stocks inside each industry.
More details on these new Premium features will soon be in your inbox. Until then please consider #3 below…
- Discover my Zen Investor portfolio where I hand pick the best stocks based on their Zen Ratings and my 44 years of investing experience.
Currently there are 17 top Zen Rated stocks in my portfolio.
4 of them just had tremendous earnings reports leading to immediate gains between 8% and 20% on the news!.
Leaning on the Zen Ratings has helped the Zen Investor portfolio strongly outpace the market to start the new year and expect to keep increasing that lead in the months ahead.
Discover the Zen Investor & My Top Stock Recommendations >
Wishing you a world of investment success!
Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)
Editor-in-Chief of WallStreetZen
What to Do Next?
Want to get in touch? Email us at news@wallstreetzen.com.
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