Fast-paced Momentum Stock Lithia Motors (LAD) Is Still Trading at a Bargain - April 26, 2021
Momentum investors typically don't measure the market or "buy low and sell high". In other words, they avoid betting on cheap stocks and waiting long periods for them to recover. Instead, they believe that "buy high and sell higher" is the way to make a lot more money in less time.
Everyone likes to bet on fast-moving trending stocks, but pinpointing the right entry point isn't easy. These stocks often lose momentum when their future growth potential does not justify their increased valuation. In this phase, investors are invested in stocks that have not restricted themselves to any upward or downward trend. Betting on a stock, just looking at traditional momentum parameters, can be risky at times.
A safer approach might be to invest in bargain stocks with the latest price momentum. While the Zacks Momentum Style Score (part of the Zacks Style Scores system) helps identify large momentum stocks by accurately looking at trends in the price or earnings of a stock, our Quick Momentum on a Bargain screen is helpful to recognize quickly. movable stocks that are still attractively valued.
There are several stocks currently running through the screen and Lithia Motors (LAD Quick Quote)BOY - - Free Report) is one of them. Here are the top reasons this stock is a great candidate.
Investors' growing interest in a stock is reflected in the recent price hike. A price change of 4.8% over the past four weeks positions the stock of this dealership chain well in this regard.
While any stock can surge in price for a short period of time, it takes a real momentum player to generate positive returns over a longer period of time. LAD also meets this criterion as the stock gained 22.2% over the past 12 weeks.
Additionally, the momentum is fast for LAD as the stock currently has a beta of 1.87. This indicates that the stock is moving 87% higher than the market in either direction.
Given this performance, it's no surprise that LAD has a Momentum Score of A, indicating that this is the right time to get into the stock and capitalize on the momentum with the highest probability of success.
In addition to a favorable momentum score, an upward trend in earnings estimate revisions helped LAD achieve a Zacks Rank 1 (Strong Buy). Our research shows that the momentum effect is quite strong on Zacks ranked 1 and 2 stocks. This is because more and more investors are interested in seeing covering analysts increase their earnings estimates on a stock, which helps keep the price race up. The full list of today's Zacks Rank # 1 (Strong Buy) stocks can be found here >>>>
Most importantly, despite its rapid momentum characteristics, LAD is trading at a reasonable valuation. In terms of value for money, which is considered one of the top valuation metrics, the stock looks pretty cheap right now. LAD is currently trading 0.71 times its sales. In other words, investors only pay 71 cents for every dollar of sales.
So LAD seems to have a lot of room to run, and at a fast pace too.
In addition to LAD, there are several other stocks that are currently scrolling through our "Fast swing for a bargain price" screen. You can invest in them and look for the latest stocks that match those criteria.
This isn't the only screen that can help you find your next winning stock pick. Based on your personal investment style, you can choose from over 45 Zacks premium screens strategically designed to beat the market.
Keep in mind, however, that the key to a successful stock selection strategy is to ensure that you have had profitable results in the past. You can easily do this with the Zacks Research Wizard. Not only does the program allow you to test the effectiveness of your strategy, it also includes some of our most successful stock selection strategies.
Click here to sign up for a free trial of the Research Wizard today.
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