Interested in momentum investing? If so, then the following list may be of interest to you.
To create this list of momentum stocks, we searched for companies that met the following requirements:
- Rallying above their 20, 50, and 200 day moving averages (MA) When a stock is rallying it means it has been performing above its market average for a given time period. Data is presented as a % of performance relative to the average. When a stock is performing above its 20-day market average as well as its 50 and 200-day market averages, it signals bullish momentum.
- Have a market cap above $300 Million – larger companies tend to have more reliable price inputs.
- Average trading volume over 50,000 – the more a stock is trading, the more investors are essentially “voting” on the stock’s worth. Rallying stocks that also see high trading volume signals the shares have more momentum to price in.
- Price above $1
The stocks market has been relatively upbeat, and it’s becoming easier to find stocks in rally mode. At the time of this writing 1,150 stocks meet the above criteria. So to separate those riding the overall market swings from those that might really have more to price in, we chose to apply an undervaluation screens to the rallying stocks.
Specifically: Are these names trading below their lowest analyst target price? The target price is a price level set by analysts that, based on their data and estimates, represents their predictions for that company in the upcoming year. And because analysts often have different opinions, and tend to be overly optimistic, we use the lowest analyst target price.
When a company’s current market price is deeply lagging to the target price, it may signal that the company has more value to price in (the stock price may rise).
This left us with 36 candidates. We then looked for significant levels of net institutional buying in the current quarter. It’s a signal Wall street investors, like hedge funds, are feeling optimistic about their prospects.
Our final 7 stocks are listed below. List sorted alphabetically.
Interactive Chart: Use the Compar-O-Matic to compare analyst ratings for the stocks mentioned below:
1. American Equity Investment Life Holding Co. (AEL, Earnings, Analysts, Financials): Through its subsidiaries, underwrites fixed annuity and life insurance products in the United States and the District of Columbia. Market cap at $707.61M, most recent closing price at $11.30. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $13.50. This implies a potential upside of 20.64% from current levels around $11.19. The stock is currently trading 1.27% above its 20-day MA, 3.61% above its 50-day MA, and 0.34% above its 200-day MA. Net institutional purchases in the current quarter at 2.8M shares, which represents about 5.06% of the company’s float of 55.29M shares.
2. BroadSoft, Inc. (BSFT, Earnings, Analysts, Financials): Provides software that enables fixed-line, mobile, and cable service providers to deliver voice and multimedia services over Internet protocol (IP) based networks. Market cap at $1.06B, most recent closing price at $38.27. Of the 10 analysts that have set a target price on the stock, the lowest price target stands at $31.00. This implies a potential upside of 17.03% from current levels around $26.49. The stock is currently trading 37.5% above its 20-day MA, 40.62% above its 50-day MA, and 14.61% above its 200-day MA. Net institutional purchases in the current quarter at 3.8M shares, which represents about 13.99% of the company’s float of 27.16M shares.
3. Echo Global Logistics, Inc. (ECHO, Earnings, Analysts, Financials): Provides technology enabled transportation and supply chain management services in the United States. Market cap at $421.91M, most recent closing price at $18.44. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $22.00. This implies a potential upside of 17.52% from current levels around $18.72. The stock is currently trading 3.6% above its 20-day MA, 2.47% above its 50-day MA, and 8.91% above its 200-day MA. Net institutional purchases in the current quarter at 719.8K shares, which represents about 5.8% of the company’s float of 12.41M shares.
4. G-III Apparel Group, Ltd. (GIII, Earnings, Analysts, Financials): Designs, manufactures, imports, and markets a range of outerwear and sportswear apparel to retailers primarily in the United States. Market cap at $554.97M, most recent closing price at $27.79. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $31.00. This implies a potential upside of 27.41% from current levels around $24.33. The stock is currently trading 5.92% above its 20-day MA, 8.33% above its 50-day MA, and 8.93% above its 200-day MA. Net institutional purchases in the current quarter at 883.9K shares, which represents about 5.53% of the company’s float of 15.98M shares.
5. Glu Mobile, Inc. (GLUU, Earnings, Analysts, Financials): Engages in the design, marketing, and sale of casual and traditional mobile games worldwide. Market cap at $334.92M, most recent closing price at $5.14. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $6.00. This implies a potential upside of 32.45% from current levels around $4.53. The stock is currently trading 1.15% above its 20-day MA, 1.19% above its 50-day MA, and 23.41% above its 200-day MA. Net institutional purchases in the current quarter at 5.9M shares, which represents about 11.32% of the company’s float of 52.11M shares.
6. Skullcandy, Inc. (SKUL, Earnings, Analysts, Financials): Develops and distributes headphones and other audio accessories to retailers in the United States and to distributors in various countries worldwide. Market cap at $448.49M, most recent closing price at $16.41. Of the 11 analysts that have set a target price on the stock, the lowest price target stands at $17.00. This implies a potential upside of 15.88% from current levels around $14.67. The stock is currently trading 7.12% above its 20-day MA, 11.83% above its 50-day MA, and 8.63% above its 200-day MA. Net institutional purchases in the current quarter at 4.3M shares, which represents about 28.53% of the company’s float of 15.07M shares.
7. Tangoe, Inc. (TNGO, Earnings, Analysts, Financials): Provides on-demand communications lifecycle management (CLM) software and related services to enterprises, including large and medium-sized businesses and other organizations. Market cap at $774.46M, most recent closing price at $20.83. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $23.00. This implies a potential upside of 16.28% from current levels around $19.78. The stock is currently trading 4.43% above its 20-day MA, 2.3% above its 50-day MA, and 17.79% above its 200-day MA. Net institutional purchases in the current quarter at 11.3M shares, which represents about 34.77% of the company’s float of 32.50M shares.
Written by Rebecca Lipman. Target price data sourced from Yahoo! Finance. Institutional data sourced from Fidelity. All other data sourced from Finviz.
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Analyze These Ideas: Getting Started
Dig Deeper: Access Company Snapshots, Charts, Filings
- American Equity Investment Life Holding Co. (AEL, Chart, Download SEC Filings)
- BroadSoft, Inc. (BSFT, Chart, Download SEC Filings)
- Echo Global Logistics, Inc. (ECHO, Chart, Download SEC Filings)
- G-III Apparel Group, Ltd. (GIII, Chart, Download SEC Filings)
- Glu Mobile, Inc. (GLUU, Chart, Download SEC Filings)
- Skullcandy, Inc. (SKUL, Chart, Download SEC Filings)
- Tangoe, Inc. (TNGO, Chart, Download SEC Filings)
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