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Are You Looking for a Top Momentum Pick? Why Ralph Lauren (RL) is a Great Choice
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Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at Ralph Lauren (RL - Free Report) , which currently has a Momentum Style Score of A. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Ralph Lauren currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
In order to see if RL is a promising momentum pick, let's examine some Momentum Style elements to see if this upscale clothing company holds up.
A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For RL, shares are up 4.2% over the past week while the Zacks Textile - Apparel industry is up 0.53% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 24.68% compares favorably with the industry's 1.79% performance as well.
While any stock can see its price increase, it takes a real winner to consistently beat the market. That is why looking at longer term price metrics -- such as performance over the past three months or year -- can be useful as well. Over the past quarter, shares of Ralph Lauren have risen 41.44%, and are up 54.5% in the last year. On the other hand, the S&P 500 has only moved 11.97% and 29.22%, respectively.
Investors should also pay attention to RL's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. RL is currently averaging 1,133,656 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with RL.
Over the past two months, 6 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost RL's consensus estimate, increasing from $9.43 to $10.11 in the past 60 days. Looking at the next fiscal year, 5 estimates have moved upwards while there have been no downward revisions in the same time period.
Bottom Line
Taking into account all of these elements, it should come as no surprise that RL is a #1 (Strong Buy) stock with a Momentum Score of A. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep Ralph Lauren on your short list.
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Are You Looking for a Top Momentum Pick? Why Ralph Lauren (RL) is a Great Choice
Momentum investing revolves around the idea of following a stock's recent trend in either direction. In the 'long' context, investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at Ralph Lauren (RL - Free Report) , which currently has a Momentum Style Score of A. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Ralph Lauren currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?
In order to see if RL is a promising momentum pick, let's examine some Momentum Style elements to see if this upscale clothing company holds up.
A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For RL, shares are up 4.2% over the past week while the Zacks Textile - Apparel industry is up 0.53% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 24.68% compares favorably with the industry's 1.79% performance as well.
While any stock can see its price increase, it takes a real winner to consistently beat the market. That is why looking at longer term price metrics -- such as performance over the past three months or year -- can be useful as well. Over the past quarter, shares of Ralph Lauren have risen 41.44%, and are up 54.5% in the last year. On the other hand, the S&P 500 has only moved 11.97% and 29.22%, respectively.
Investors should also pay attention to RL's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. RL is currently averaging 1,133,656 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with RL.
Over the past two months, 6 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost RL's consensus estimate, increasing from $9.43 to $10.11 in the past 60 days. Looking at the next fiscal year, 5 estimates have moved upwards while there have been no downward revisions in the same time period.
Bottom Line
Taking into account all of these elements, it should come as no surprise that RL is a #1 (Strong Buy) stock with a Momentum Score of A. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep Ralph Lauren on your short list.