Why You Should Get THIS Stock Before the Next Surge

Trading against a trend is hard — trading with a trend, while still sometimes tough to execute, is much more doable.

That doesn’t mean that you’re dealing with no-brainers when a stock has plenty of momentum — but it can be a good place to start. 

Where there’s smoke, there’s fire — when a ticker has legs and sees significant gains in a short span, there’s usually a reason as to why it happened. However, we’re still left with a few questions — is the newfound price right, is there more growth to be had, and has the train already left the station?

Fortunately for us, every once in a while, the proverbial train stops at another station, before resuming its journey. Stocks with momentum see pullbacks or periods of rangebound trading — and if the underlying growth trajectory hasn’t shifted, and if the valuation hasn’t become too frothy, that can be a great place to hop on.

That’s exactly what’s happening with THIS company…

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Taylor Devices (NASDAQ: TAYD) is a $225 million market-cap company that builds industrial components designed to protect buildings and equipment from shock, vibration, and extreme forces.

Our quant rating system uses 115 unique factors to evaluate 4,600 stocks each day. Those insights are distilled into a single metric, the Zen Rating — with only the top 5% of stocks being given a Zen Rating of A, equivalent to a Strong Buy.

These Strong Buy stocks have provided an average annual return of 32.52% since the early 2000s. Right now, TAYD ranks in the very top of the top 1% — in fact, this is the 9th highest-rated stock overall as of the time of writing.

Each Zen Rating consists of 7 Component Grade ratings, which can give us a better overview of a stock’s particular strengths and weaknesses. 

We’re going to start with Momentum. Taylor Devices shares have been on a roll for some time now — marking a 20.61% gain over the past 30 days, a 72.4% gain over the past 3 months, and a 108.32% gain compared to this time a year ago.

Right now, we’re at one of those stops that we mentioned earlier — over the past week, the stock has lost 1.23% in value. That doesn’t qualify as a dip — but it is a temporary pause.

Those market-beating gains put TAYD in the top 3% of stocks in terms of Momentum. But here’s the kicker — the growth trajectory is still strong , and the valuation is still attractive.

When it comes to the Growth Component Grade rating, Taylor Devices ranks in the 81st percentile of stocks — equivalent to or better than 81% of stocks, or, in other words, in the top 19%. But at a price-to-earnings ratio of just 22.65x, far below the market average of 47.89x, it also ranks in the top 9% for Value.

TAYD is also the top-rated stock in the Specialty Industrial Machinery industry, which has an Industry Rating of A.

This gives us a good opportunity to highlight Taylor Devices’ strengths by contrasting the stock to the second highest-rated stock in the industry — Theremon Group (NYSE: THR).

THR also ranks in the top 1% of stocks, and is rated 32nd overall — but the differences between the two are significant. While Theremon Group has a slightly better Growth rating — 83rd percentile compared to TAYD’s 81st, the difference is negligible — while the difference in valuation is stark. THR ranks in the 73rd percentile for Value, and is trading at a price-to-earnings growth (PEG) ratio of 1.62x, indicating that it might be overvalued.

Don’t get us wrong — THR is also a great ticker, but in the big picture, TAYD still prevails.

Alright — back to some more metrics. TAYD also ranks in the top 12% of stocks for Sentiment. There seems to be a great deal of bullishness among key company personnel and insiders — with 68.75% of the insider trades tied to the stock in the past 12 months being purchases.

Lastly, we have a pretty strong balance sheet here. The debt-to-equity ratio stands at just 0.09 — Taylor Devices has a negligible amount of debt, and has seen margins improve over the past year.

Right now, TAYD is cheap — and the company has notched three earnings beats in a row. There’s plenty of insider enthusiasm, a streak of short-term outperformance, and solid growth metrics. The next earnings call is due in late March — so now is the perfect time to get in before the upward trajectory continues.

—> Click here to research TAYD

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