Do You Like Momentum Stocks?

As Isaac Newton famously said “a body in motion stays in motion”. 

That is as true in physics as it is in the stock market. That is why I am glad to share that we uncovered 22 different factors of momentum that are now inside the Zen Ratings model.

My goal is not to bore you by spelling out all 22 momentum indicators. Instead I have 3 key aspects to share with you: 

1) Short Term & Long Term Momentum

Academic studies show how shaky it is to just focus on short term momentum as it may be nothing more than a quick sector rotation that reverses course leading to losses. 

It is much better to be riding long term momentum that is typically based on improvements in the fundamentals of the company (in particular better than expected earnings growth). 

This consistent momentum over time leads to much greater odds of share price gains in the near term making them very timely trades. 

2) ONLY Profitable Indicators

The data science team that created the Zen Ratings investigated over 2,000 different indicators before narrowing down to the 115 remaining in the model. 

The decision of which indicators to keep (and which to reject) was very simple.

Does this factor help to consistently beat the stock market? 

Yes = In the Model

No = Rejected

The point being that the 22 momentum factors inside the Zen Ratings model were the ONLY momentum factors that consistently led to market beating stocks. And thus the ONLY momentum factors that matter. 

3) The Proof is in the Pudding

The famed +32.52% average annual return for the Zen Ratings is certainly eye-catching. But it doesn't prove how good the system is at finding timely momentum stocks ready to bolt higher right now.

So today I conducted a quick study of all the A rated stocks since the start of 2023 that produced the most impressive gains in three months or less. Here are the top 5:

+215.7% QXO

+163.5% TSSI

+127.7% NUTX

+94.4% IMGN (gains actually took place in just 28 days)

+79.8% NINE

(Note none of the above stocks are currently A rated. More details further below on how to find the best momentum stocks now). 

Of course it’s fairly easy to produce a list of just 5 big winners. But the cool thing is that since 2023 we have enjoyed 271 double digit winners in three months or less. 

It is this consistent outperformance that is the hallmark of the Zen Ratings model. And the 22 factors of Momentum play a large part in making it the place to find the best stocks to own now.  

What to Do Next? 

The best starting point for your momentum stock journey is with our popular Stock Ideas screen:

Short Term Momentum Stocks

This Premium screen starts broadly with over 200 stocks that are A or B rated overall with A or B for the Momentum score. 

In just 2 clicks you can narrow it down to just 15 stocks that score A for both these vital criteria. 

Want even more great stocks? 

Then check out this article listing 9 Special Stock Lists You Need Now.

Wishing you a world of investment success!

Steve Reitmeister…but everyone calls me Reity (pronounced “Righty”)

Editor-in-Chief of WallStreetZen

What to Do Next?

• 9 Special Stock Lists You Need Now >
• See All “A” Rated Stocks with +32.52% Average Annual Return >
• 2 New Stocks to Buy from Steve Reitmeister >

Want to get in touch? Email us at news@wallstreetzen.com.