Unlock APAM’s Surging Momentum: Is It Time to Buy This Top Stock?
Momentum Investing: A Comprehensive Guide to Following Stock Trends
Momentum investing is a popular and widely used stock characteristic that involves following the recent trend of a stock’s price movement. This methodology, which can be applied in either direction (up or down), relies on the idea that once a stock establishes a course, it will continue moving in that direction for an extended period.
Investors who practice momentum investing are essentially "buying high and hoping to sell even higher." The key to successful momentum investing lies in identifying stocks with strong upward trends, as these are more likely to lead to timely and profitable trades. However, determining the best metrics to focus on is often a contentious issue among investors.
To address this concern, Zacks Investment Research has developed the Zacks Momentum Style Score (part of the Zacks Style Scores) as a useful tool for identifying momentum stocks. This score helps investors like us evaluate the strength and consistency of a stock’s price movement over time.
Artisan Partners Asset Management: A Momentum Stock with a Strong Track Record
In this article, we will delve into the world of momentum investing by examining Artisan Partners Asset Management (APAM), a company that currently holds a Zacks Momentum Style Score of B. We will analyze its price change and earnings estimate revisions to determine whether APAM is a promising pick for momentum investors.
To begin with, let’s take a closer look at the short-term price activity of APAM shares. Over the past week, the stock has seen a notable increase of 4.35%, outperforming the Zacks Financial – Investment Management industry, which has risen by only 1.91% over the same time period. This trend is also evident from a longer-term perspective, as the monthly price change of 11.96% compares favorably with the industry’s 4.59% performance.
Moreover, when we consider the stock’s performance over the last three months or year, we find that APAM has consistently outperformed the S&P 500 index. Over the past quarter, shares have risen by 37.33%, while in the last year they have gained 16.85%. In contrast, the S&P 500 has only moved 19.67% and 12.87%, respectively.
Analyzing Earnings Estimate Revisions: A Key Factor in Momentum Investing
The Zacks Momentum Style Score encompasses various metrics, including estimate revisions and a stock’s price movement. One of the essential components is earnings estimates, which play a significant role in determining the Zacks Rank. APAM has recently seen an increase in its consensus estimate due to a notable revision by 1 analyst over the past two months.
This upward revision helped boost APAM’s consensus estimate from $3.33 to $3.61 in the last 60 days, while the next fiscal year saw 1 upward and no downward revisions in the same time period. This trend suggests that investors should continue to monitor earnings estimates closely for momentum stocks like APAM.
Conclusion
Given its impressive performance over the past few months, it is not surprising that APAM holds a Zacks Rank of #1 (Strong Buy) and boasts a Momentum Score of B. If you are looking for a fresh pick with potential for significant growth in the near-term, make sure to keep Artisan Partners Asset Management on your short list.
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