Momentum investors typically do not time the market or “buy low and sell high”. In other words, they avoid betting on cheap stocks and waiting a long time for their recovery. Instead, they believe that “buying and selling for more” is the way to make a lot more money in less time.
Who doesn’t like to bet on fast trending stocks? But determining the right entry point is not easy. Often, these stocks lose momentum once their valuation exceeds their potential for future growth. In such a situation, investors find themselves loaded on expensive stocks with little or no benefit or even a downside. So going all-in on the momentum could be risky at times.
It might be safer to invest in value-priced stocks that have recently seen price momentum. While the Zacks Momentum Style Score (which is part of the Zacks Style Scores system), which pays close attention to a stock’s price or earnings trends, is quite useful in identifying high momentum stocks, our screen ” Fast-Paced Momentum at a Bargain ” appears. handy for spotting fast moving stocks whose prices are still attractive.
UFP industries (UFPI) is one of the many great contenders who have made it across the screen. While there are many reasons why this stock is a great choice, here are the most important:
Recent price momentum reflects growing investor interest in a stock. With a price change of 3.5% over four weeks, the inventory of this supplier of lumber and materials for the construction industry is certainly well positioned in this regard.
While any stock can experience a price spike for a short time, it takes a real momentum player to deliver positive returns for a longer time. UFPI also meets this criterion, with the stock having gained 38.7% over the past 12 weeks.
Additionally, the momentum for UFPI is rapid, as the stock currently has a beta of 1.53. This indicates that the stock is moving 53% higher than the market in either direction.
Given this price performance, it is no surprise that UFPI has a Momentum Score of B, which indicates that now is the right time to go public to take advantage of the momentum with the greatest likelihood of success. .
In addition to a favorable Momentum Score, an upward trend in earnings estimate revisions helped UFPI achieve a Zacks # 1 (strong buy) rank. Our research shows that the dynamic effect is quite strong among Zacks Tier 1 and 2 stocks. Indeed, as hedge analysts increase their earnings estimates for a stock, more and more investors are taking an interest in it, helping its price run to hold up. You can see the full list of current Zacks Rank # 1 (Strong Buy) stocks here >>>>
More importantly, despite its rapid momentum characteristics, UFPI is trading at a reasonable valuation. In terms of the price-to-sell ratio, which is considered one of the best indicators of valuation, the stock looks pretty cheap now. UFPI is currently trading at 0.86 times its sales. In other words, investors only have to pay 86 cents for every dollar in sales.
So the UFPI seems to have a lot of space to function, and that too at a rapid pace.
In addition to UFPI, there are several other actions currently going through our “Fast-Paced Momentum at a Bargain” screen. You can consider investing in it and start looking for the most recent stocks that meet these criteria.
This isn’t 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 displays that are strategically created to beat the market.
However, keep in mind that the key to a successful stock selection 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. In addition to allowing you to re-test the effectiveness of your strategy, the program includes some of our most successful stock selection strategies.
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