Momentum investing is essentially the opposite of the tried and true Wall Street adage: “buy low and sell high.” Investors who follow this investment style typically avoid betting on cheap stocks and waiting a long time for them to recover. Instead, they believe that you can make a lot more money in less time by “buying high and selling higher.”
Who doesn’t like betting on fast-moving trend stocks? But determining the right access point is not easy. Often these stocks lose momentum once their valuation exceeds their future growth potential. In such a situation, investors are showered with expensive stocks with little to no upside or even downside. So going all-in on momentum can sometimes be risky.
It may be safer to invest in bargain stocks that have seen price momentum lately. While the Zacks Momentum Style Score (part of the Zacks Style Scores system), which looks closely at trends in a stock’s price or earnings, is quite useful in identifying stocks with great momentum, our “Fast- Paced Momentum at a Bargain’. useful for spotting fast-moving stocks that are still attractively priced.
There are several stocks that are currently going through the screen and Upland Software (UPLD) is one of them. Here are the top reasons why this stock is a great candidate.
Investors’ growing interest in a stock is reflected in its recent price increase. A 39.6% price change over the past four weeks positions shares of this maker of cloud-based enterprise work management software well in this regard.
While any stock can see a price spike for a short period of time, it takes a true momentum player to deliver positive returns over the longer term. UPLD also meets this criterion, as the stock is up 79.6% over the past twelve weeks.
Moreover, momentum for UPLD is fast, as the stock currently has a beta of 1.32. This indicates that the stock is moving 32% higher than the market in either direction.
Given this price performance, it’s no surprise that UPLD has a Momentum Score of B, indicating that now is the right time to get into the stock and take advantage of the momentum with the best chance of success.
In addition to a favorable Momentum Score, an upward trend in earnings estimate revisions has helped UPLD earn a Zacks Rank #1 (Strong Buy). Our research shows that the momentum effect is quite strong among Zacks Rank #1 and #2 stocks. That’s because as analysts raise their earnings estimates for a stock, more and more investors show interest in it, keeping the price race alive. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>
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