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3 Momentum Anomaly Stocks to Buy as Markets Falter on AI Concerns
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The broader U.S. equity markets witnessed intense volatility over the past couple of trading days, hitting record highs on one hand and plummeting sharply on the other owing to concerns about an AI (artificial intelligence) stock bubble. While President Trump’s advocacy for lower interest rates and lower oil prices buoyed investor sentiments, the stock market was propelled by positive vibes about potential tax cuts and deregulation by the change of regime and signs of resilient economic growth.
However, apprehensions related to U.S. tech supremacy and innovation, with a China-based startup DeepSeek offering AI innovations at a fraction of the cost, have put an entire ecosystem built around massive AI investments in jeopardy. This forced blue-chip tech firms to go into a tailspin, rattling overall markets. Amid the uncertainty, investors often seek to employ time-tested winning strategies to fetch sustained profits. One of the most successful game plans to beat the blues is to bet on momentum stocks, like First Horizon Corporation (FHN - Free Report) , MasTec, Inc. (MTZ - Free Report) and Marvell Technology, Inc. (MRVL - Free Report) , when value or growth investing fails to generate the desired profits.
This approach primarily tends to follow the adage, “the trend is your friend.” At its core, momentum investing is “buying high and selling higher.” It is based on the idea that once a stock establishes a trend, it is more likely to continue in that direction because of the momentum that is already behind it. Momentum investing is a way to profit from the general human tendency to extrapolate current trends into the future. It is based on that gap in time before the mean reversion occurs, i.e., before prices become rational again.
Momentum strategies have been known to be alpha-generative over a long period and across market stages. So, this strategy is quite tricky to implement, as detecting these trends is no child’s play. Here, we have created a strategy to help investors get in on these fast movers and rake in handsome gains. Our screen will help you benefit from both long-term price momentum and a short-term pullback in price.
Screening Parameters for Momentum Anomaly Stocks
Percentage Change in Price (52 Weeks) = Top #50: This selects the top 50 stocks with the best percentage price change over the last 52 weeks. This parameter ensures we get the best stocks that have appreciated steadily over the past year.
Percentage Change in Price (1 Week) = Bottom #10: From the above 50 stocks, we then choose those that are also among the 10 worst performers over a short one-week period. This parameter picks the ones that have witnessed a short-term pullback in price.
Momentum Style Score of B or Better: A top Momentum Style Score knocks out a lot of the screening process as it takes into account several factors that include volume change and performance relative to its peers. It indicates when the timing is best to grab a stock and take advantage of its momentum with the highest probability of success. Stocks with a Momentum Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), handily outperform other stocks.
Current Price greater than $5: The stocks must all be trading at a minimum of $5.
Market Capitalization = Top #3000: We have chosen stocks that are among the top 3000 in terms of market value to ensure the stability of price.
Average 20-Day Volume greater than 100,000: A substantial trading volume ensures that these stocks are easily tradable.
Here are three stocks out of the six that made it through this screen:
Based in Memphis, TN, First Horizon is a financial services firm. The company offers regional banking, mortgage lending, title insurance, specialized commercial lending, commercial leasing and equipment financing, brokerage, wealth management and capital market services. The stock has surged 42.5% in the past year but declined 1.7% in the past week. First Horizon has a Momentum Score of B.
Headquartered in Coral Gables, FL, MasTec is a leading infrastructure construction firm operating mainly throughout North America. The company engages in the engineering, building, installation, maintenance and upgrade of energy, communication, utility and other infrastructure. The stock has rallied 95.3% in the past year but declined 15.6% in the past week. MasTec has a Momentum Score of A.
Wilmington, DE-based Marvell is a fabless designer, developer and marketer of analog, mixed-signal and digital signal-processing integrated circuits. The company operates in Bermuda, China, Germany, Japan, Korea, Taiwan, the United Kingdom, and the United States. The stock has surged 43% in the past year but declined 19.6% in the past week. Marvell has a Momentum Score of A.
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 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: Bigstock
3 Momentum Anomaly Stocks to Buy as Markets Falter on AI Concerns
The broader U.S. equity markets witnessed intense volatility over the past couple of trading days, hitting record highs on one hand and plummeting sharply on the other owing to concerns about an AI (artificial intelligence) stock bubble. While President Trump’s advocacy for lower interest rates and lower oil prices buoyed investor sentiments, the stock market was propelled by positive vibes about potential tax cuts and deregulation by the change of regime and signs of resilient economic growth.
However, apprehensions related to U.S. tech supremacy and innovation, with a China-based startup DeepSeek offering AI innovations at a fraction of the cost, have put an entire ecosystem built around massive AI investments in jeopardy. This forced blue-chip tech firms to go into a tailspin, rattling overall markets. Amid the uncertainty, investors often seek to employ time-tested winning strategies to fetch sustained profits. One of the most successful game plans to beat the blues is to bet on momentum stocks, like First Horizon Corporation (FHN - Free Report) , MasTec, Inc. (MTZ - Free Report) and Marvell Technology, Inc. (MRVL - Free Report) , when value or growth investing fails to generate the desired profits.
This approach primarily tends to follow the adage, “the trend is your friend.” At its core, momentum investing is “buying high and selling higher.” It is based on the idea that once a stock establishes a trend, it is more likely to continue in that direction because of the momentum that is already behind it. Momentum investing is a way to profit from the general human tendency to extrapolate current trends into the future. It is based on that gap in time before the mean reversion occurs, i.e., before prices become rational again.
Momentum strategies have been known to be alpha-generative over a long period and across market stages. So, this strategy is quite tricky to implement, as detecting these trends is no child’s play. Here, we have created a strategy to help investors get in on these fast movers and rake in handsome gains. Our screen will help you benefit from both long-term price momentum and a short-term pullback in price.
Screening Parameters for Momentum Anomaly Stocks
Percentage Change in Price (52 Weeks) = Top #50: This selects the top 50 stocks with the best percentage price change over the last 52 weeks. This parameter ensures we get the best stocks that have appreciated steadily over the past year.
Percentage Change in Price (1 Week) = Bottom #10: From the above 50 stocks, we then choose those that are also among the 10 worst performers over a short one-week period. This parameter picks the ones that have witnessed a short-term pullback in price.
Zacks Rank #1: Stocks sporting a Zacks Rank #1 (Strong Buy) have a proven history of outperformance irrespective of the market conditions. You can see the complete list of today’s Zacks #1 Rank stocks here.
Momentum Style Score of B or Better: A top Momentum Style Score knocks out a lot of the screening process as it takes into account several factors that include volume change and performance relative to its peers. It indicates when the timing is best to grab a stock and take advantage of its momentum with the highest probability of success. Stocks with a Momentum Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), handily outperform other stocks.
Current Price greater than $5: The stocks must all be trading at a minimum of $5.
Market Capitalization = Top #3000: We have chosen stocks that are among the top 3000 in terms of market value to ensure the stability of price.
Average 20-Day Volume greater than 100,000: A substantial trading volume ensures that these stocks are easily tradable.
Here are three stocks out of the six that made it through this screen:
Based in Memphis, TN, First Horizon is a financial services firm. The company offers regional banking, mortgage lending, title insurance, specialized commercial lending, commercial leasing and equipment financing, brokerage, wealth management and capital market services. The stock has surged 42.5% in the past year but declined 1.7% in the past week. First Horizon has a Momentum Score of B.
Headquartered in Coral Gables, FL, MasTec is a leading infrastructure construction firm operating mainly throughout North America. The company engages in the engineering, building, installation, maintenance and upgrade of energy, communication, utility and other infrastructure. The stock has rallied 95.3% in the past year but declined 15.6% in the past week. MasTec has a Momentum Score of A.
Wilmington, DE-based Marvell is a fabless designer, developer and marketer of analog, mixed-signal and digital signal-processing integrated circuits. The company operates in Bermuda, China, Germany, Japan, Korea, Taiwan, the United Kingdom, and the United States. The stock has surged 43% in the past year but declined 19.6% in the past week. Marvell has a Momentum Score of A.
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 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.