Momentum investors typically do not time the market or “buy low and sell high.” In other words, they avoid betting on cheap stocks and wait for them to recover. Instead, they believe that “buy high, sell high” is the way to make more money in less time.
Who doesn’t love betting on fast-moving trending stocks? But determining the right entry point isn’t easy. Typically, these stocks lose momentum once their valuation exceeds their future growth potential. In this case, investors find themselves buying expensive stocks with limited upside or even no downside. So going all out can sometimes be risky.
It may be safer to invest in cheap stocks that have seen recent price increases. While the Zacks Momentum Style Scores (part of the Zacks Style Scores system), which closely follows trends in a stock’s price or earnings, can be useful for identifying stocks with strong momentum, our Bargain Fast-Paced Momentum screen comes in handy to find out if prices still have Attractive fast-moving stocks.
invite (NVTA) is one of several outstanding candidates passing through the screen. While there are many reasons why this stock is a great choice, here are the top ones:
Investors’ growing interest in the stock is reflected in its recent price gains. With a price change of 20.3% over the past four weeks, the genetic testing company’s stock is well-positioned on this front.
While any stock can experience a price surge in the short term, it takes a true momentum player to achieve positive returns over the longer term. NVTA also meets this criteria, with the stock up 7.5% in the past 12 weeks.
Additionally, NVTA is gaining momentum quickly, and the stock currently has a beta of 1.65. This shows that the stock moves 65% more than the market in either direction.
Given this price performance, it’s no surprise that NVTA has a Momentum Score of A, suggesting now is the perfect time to enter the stock to capitalize on momentum with the highest likelihood of success.
In addition to a favorable Momentum Score, an upward trend in earnings estimate revisions has helped NVTA earn a Zacks Rank #2 (Buy). Our research shows that the momentum effect is quite strong among Zacks Rank #1 and #2 stocks. That’s because as analysts raise profit expectations for a stock, more investors become interested in it, helping its price race to keep up. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here >>>>
The bottom line is that despite its fast-paced momentum, NVTA’s valuation remains reasonable. On a price-to-sales ratio, considered one of the best valuation metrics, the stock looks quite cheap right now. NVTA currently trades at 0.39 times its sales. In other words, investors only pay 39 cents for every dollar of sales.
So NVTA seems to have plenty of room to run, and it does so very quickly.
In addition to NVTA, there are several other stocks currently passing through our Fast-Paced Low Price Momentum screen. You can consider investing in them and start looking for the latest stocks that meet these criteria.
This isn’t the only screen that can help you find your next winning stock. Depending on your personal investing style, you can choose from more than 45 Zacks Premium Screens, which are designed 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 do this easily with the help of the Zacks Research Wizard. In addition to allowing you to backtest the effectiveness of your strategies, the program is also loaded with some of our most successful stock picking strategies.
Click here to sign up for a free trial of Research Wizard now.
Want the latest recommendations from Zacks Investment Research? Today you can download the 7 best stocks for the next 30 days.Click to get this free report
Invitae Corporation (NVTA): Free Stock Analysis Report
To read this article on Zacks.com, click here.
Zacks Investment Research
#Momentum #Invitae #NVTA #Cheap #Stock
Image Source : finance.yahoo.com