MOmentum investors typically do not synchronize the market or âbuy low and sell highâ. In other words, they avoid betting on cheap stocks and waiting a long time for them to recover. Instead, they believe that âbuying high and selling higherâ is the way to make a lot more money in less time.
Who doesn’t like to bet on fast trending stocks? But determining the right entry point is not easy. Often, these stocks lose momentum once their valuation exceeds their potential for future growth. In such a situation, investors find themselves overloaded with expensive stocks with little or no upside or even downside. So going all-in on the swing can be risky at times.
It might be safer to invest in low priced stocks that have recently seen price momentum. While the Zacks Momentum Style Score (which is part of the Zacks’ style scores system), which pays close attention to trends in a stock’s price or earnings, is very useful for identifying high-momentum stocks, our âFast momentum at a great priceâ screen is handy for spotting fast-moving stocks which are always at an attractive price.
Ranger Energy (RNGR) is one of the many great contenders who have come to the screen. While there are many reasons why this stock is a great choice, here are the most important:
The growing interest of investors in a stock is reflected in its recent price increase. A price change of 4.4% over the past four weeks positions this company’s stock well in this regard.
While any stock can experience a price rise for a short period of time, it takes a real dynamic player to generate positive returns over a longer period. RNGR also meets this criterion, as the stock has gained 0.8% in the past 12 weeks.
Additionally, the momentum for RNGR is fast, as the title currently has a beta of 2.09. This indicates that the stock is moving 109% higher than the market in both directions.
Given this price performance, it is no surprise that RNGR has a Momentum Score of A, indicating that now is the right time to enter the stock to take advantage of the momentum with the greatest likelihood of success.
In addition to a favorable Momentum Score, an upward trend in earnings estimate revisions helped RNGR achieve a Zacks Rank # 2 (Buy). Our research shows that the dynamic effect is quite strong among Zacks Tier 1 and 2 stocks. Indeed, as hedge analysts increase their earnings estimates for a stock, more and more investors are interested, helping its price race to follow. You can see the full list of today’s Zacks Rank # 1 (strong buy) stocks here >>>>
More importantly, despite its rapid momentum characteristics, RNGR is trading at a reasonable valuation. In terms of the price-to-sell ratio, which is considered one of the best indicators of valuation, the stock looks pretty cheap now. RNGR is currently trading at 0.86 times its sales. In other words, investors only have to pay 86 cents for every dollar sold.
So, RNGR seems to have plenty of room to run, and that too at a fast pace.
In addition to RNGR, several other actions are currently going through our âFast Momentum at a Great Priceâ screen. You can consider investing in them and start looking for the most recent stocks that match these criteria.
This isn’t the only screen that might help you find your next winning stock pick. Depending on your personal investing style, you can choose from over 45 Zacks Premium Displays which are strategically created to beat the market.
However, keep in mind that the key to a successful stock selection strategy is to ensure that it has produced profitable results in the past. You can easily do this with the help of Zacks’ research assistant. In addition to allowing you to check the effectiveness of your strategy, the program contains some of our most successful stock selection strategies.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.