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Buy Momentum Stocks NVIDIA & Vistra as S&P 500 Aims for 7,000
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The S&P 500 surpassed 6,000 amid U.S. economic growth and a strong labor market. With the Trump administration expected to create a favorable stock market environment in a low interest rate scenario, the S&P 500 seems well-poised to scale upward.
Equity strategist Christopher Harvey of Wells Fargo & Company (WFC - Free Report) , thus, forecasted the S&P 500 to reach 7,007 by 2025, while Yardeni Research and Deutsche Bank predicted it to finish at 7,000 next year.
Hence, investors can capitalize on the present market uptrend by investing in sound S&P 500 momentum stocks using Richard Driehaus’ strategy of "buy high and sell higher" theory.
To that end, stocks like NVIDIA Corporation (NVDA - Free Report) and Vistra Corp. (VST - Free Report) have been selected as the momentum picks for the day using the Driehaus strategy.
A Detailed Look Into the Driehaus Strategy
Regarding the strategy, Driehaus once said, “I would much rather invest in a stock that’s increasing in price and take the risk that it may begin to decline than invest in a stock that’s already in decline and try to guess when it will turn around.” In line with this insight, the American.
The Association of Individual Investors (“AAII”) considered the percentage 50-day moving average as one of the key criteria before creating a portfolio following Driehaus’ philosophy.
It is calculated by dividing the numerator (month-end price minus 50-day moving average of month-end price) by the 50-day moving average of the month-end price. Another momentum indicator — positive relative strength — has also been included in this strategy. A positive percentage 50-day moving average indicates that the stock is trading at a price higher than its 50-day moving average level, indicating an uptrend.
Moreover, AAII found that Driehaus primarily focuses on strong earnings growth rates and impressive earnings projections to pick potential outperformers. Companies with a strong history of beating estimates are also given importance in this strategy, which was made to provide better returns over the long term.
We use that basis to determine our stock selections using Zack’s Research Wizard Tool.
Screening Parameters Using Research Wizard:
To make the strategy more profitable, we have considered only those stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Momentum Score of A or B. Our research shows that stocks with a Style Score of A or B, combined with a Zacks Rank #1 or 2, offer the best upside potential.
Strong EPS growth history ensures improving business
• Trailing 12-month EPS growth greater than 0 and industry median
Higher EPS growth compared to the industry average indicates superior earnings performance
• Last four-quarter average EPS surprise greater than 5%
Solid EPS surprise history indicates better price performance
• Positive percentage change in 50-day moving average and relative strength over 4 weeks
Positive percentage change in 50-day moving average and relative strength signal uptrend
• Momentum Score equal to or less than B
A favorable momentum score indicates that it is ideal for taking advantage of the momentum with the highest probability of success.
These few parameters have narrowed the universe of more than 7,743 stocks to only 51. Here are the best two:
NVIDIA
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. NVIDIA has a Zacks Rank #2 and a Momentum Score of B.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Image: Shutterstock
Buy Momentum Stocks NVIDIA & Vistra as S&P 500 Aims for 7,000
The S&P 500 surpassed 6,000 amid U.S. economic growth and a strong labor market. With the Trump administration expected to create a favorable stock market environment in a low interest rate scenario, the S&P 500 seems well-poised to scale upward.
Equity strategist Christopher Harvey of Wells Fargo & Company (WFC - Free Report) , thus, forecasted the S&P 500 to reach 7,007 by 2025, while Yardeni Research and Deutsche Bank predicted it to finish at 7,000 next year.
Hence, investors can capitalize on the present market uptrend by investing in sound S&P 500 momentum stocks using Richard Driehaus’ strategy of "buy high and sell higher" theory.
To that end, stocks like NVIDIA Corporation (NVDA - Free Report) and Vistra Corp. (VST - Free Report) have been selected as the momentum picks for the day using the Driehaus strategy.
A Detailed Look Into the Driehaus Strategy
Regarding the strategy, Driehaus once said, “I would much rather invest in a stock that’s increasing in price and take the risk that it may begin to decline than invest in a stock that’s already in decline and try to guess when it will turn around.” In line with this insight, the American.
The Association of Individual Investors (“AAII”) considered the percentage 50-day moving average as one of the key criteria before creating a portfolio following Driehaus’ philosophy.
It is calculated by dividing the numerator (month-end price minus 50-day moving average of month-end price) by the 50-day moving average of the month-end price. Another momentum indicator — positive relative strength — has also been included in this strategy. A positive percentage 50-day moving average indicates that the stock is trading at a price higher than its 50-day moving average level, indicating an uptrend.
Moreover, AAII found that Driehaus primarily focuses on strong earnings growth rates and impressive earnings projections to pick potential outperformers. Companies with a strong history of beating estimates are also given importance in this strategy, which was made to provide better returns over the long term.
We use that basis to determine our stock selections using Zack’s Research Wizard Tool.
Screening Parameters Using Research Wizard:
To make the strategy more profitable, we have considered only those stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Momentum Score of A or B. Our research shows that stocks with a Style Score of A or B, combined with a Zacks Rank #1 or 2, offer the best upside potential.
• Zacks Rank less than or equal to #2
Whether the market is good or bad, stocks with a Zacks Rank #1 or 2 have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
• Last 5-year average EPS growth rates above 2%
Strong EPS growth history ensures improving business
• Trailing 12-month EPS growth greater than 0 and industry median
Higher EPS growth compared to the industry average indicates superior earnings performance
• Last four-quarter average EPS surprise greater than 5%
Solid EPS surprise history indicates better price performance
• Positive percentage change in 50-day moving average and relative strength over 4 weeks
Positive percentage change in 50-day moving average and relative strength signal uptrend
• Momentum Score equal to or less than B
A favorable momentum score indicates that it is ideal for taking advantage of the momentum with the highest probability of success.
These few parameters have narrowed the universe of more than 7,743 stocks to only 51. Here are the best two:
NVIDIA
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. NVIDIA has a Zacks Rank #2 and a Momentum Score of B.
The trailing four-quarter earnings surprise for NVDA is 9.8%, on average (read more: 3 Reasons Besides Q3 Data Center Success to Buy NVIDIA Stock).
Vistra
Vistra operates as an integrated retail electricity and power generation company. Vistra has a Zacks Rank #1 and a Momentum Score of B.
The trailing four-quarter earnings surprise for VST is 7.1%, on average (read more: Vistra Surpasses NVIDIA as S&P 500's Top Stock in 2024: Buy Now?).
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.