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Zacks.com featured highlights include: Arista Networks, Inc. , Occidental Petroleum Corp. and Houlihan Lokey, Inc
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For Immediate Release
Chicago, IL – March 1, 2022 – Stocks in this week’s article are Arista Networks, Inc. (ANET - Free Report) , Occidental Petroleum Corp. (OXY - Free Report) and Houlihan Lokey, Inc. (HLI - Free Report) .
3 Stocks Witnessing Momentum Anomalies for a Winning Portfolio
The geopolitical issue between Russia and Ukraine has weighed on stocks lately, as investors resorted to panic selling in the apprehension of escalating tensions.
The going will be choppier as long as the market is factoring-in uncertainty. Amidst the developments, one should remember that this is an opportunity to get your favorite stock at a discount.
We know, 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. But why does the momentum strategy work?
There could be several behavioral biases that most investors exhibit in their decision-making. These emotional responses, or rather mistakes, are the very reason that makes momentum strategy work.
For example, some investors are anxious about booking losses and hence hold on to losing stocks for too long, hopeful of a rebound in prices. On the other hand, a few investors sell their winners way too early.
Also, investors initially tend to underreact to news, events or data releases. However, once things become clear, they have a habit of going with the flow and overreacting, causing dramatic price reactions. These behavioral problems extend trends, thus opening up huge opportunities for momentum players.
So, it’s a way to profit from the general human tendency to extrapolate current trends into the future. Momentum investing 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. 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.
Here are three of the six stocks that made it through this screen:
Headquartered in Santa Clara, CA, Arista Networks, Inc. is a leader in data-driven, client to cloud networking for large data centers, campus and routing environments. Arista Networks benefits from strong momentum and diversification across its top verticals and product lines. The stock has gained 71.5% in the past year but declined 1.9% in the past week. It has a Momentum Score of B.
Headquartered in Houston, TX, Occidental Petroleum Corp. is a global energy company with assets primarily in the United States, the Middle East and North Africa. Occidental Petroleum’s focus on operational efficiency enables it to leverage the increase in commodity prices to improve its balance sheet and liquidity position. The stock has returned 40% in the past year but lost 2% in the past week. It has a Momentum Score of A.
Headquartered in Los Angeles, CA, Houlihan Lokey, Inc. is an investment bank with expertise in mergers and acquisitions, capital markets and financial restructuring. Houlihan Lokey serves corporations and governments worldwide with offices in the United States, Europe, the Middle East and the Asia-Pacific region. The stock has appreciated 58.2% in the past year but declined 5% in the past week. It has a Momentum Score of A.
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks.com featured highlights include: Arista Networks, Inc. , Occidental Petroleum Corp. and Houlihan Lokey, Inc
For Immediate Release
Chicago, IL – March 1, 2022 – Stocks in this week’s article are Arista Networks, Inc. (ANET - Free Report) , Occidental Petroleum Corp. (OXY - Free Report) and Houlihan Lokey, Inc. (HLI - Free Report) .
3 Stocks Witnessing Momentum Anomalies for a Winning Portfolio
The geopolitical issue between Russia and Ukraine has weighed on stocks lately, as investors resorted to panic selling in the apprehension of escalating tensions.
The going will be choppier as long as the market is factoring-in uncertainty. Amidst the developments, one should remember that this is an opportunity to get your favorite stock at a discount.
We know, 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. But why does the momentum strategy work?
There could be several behavioral biases that most investors exhibit in their decision-making. These emotional responses, or rather mistakes, are the very reason that makes momentum strategy work.
For example, some investors are anxious about booking losses and hence hold on to losing stocks for too long, hopeful of a rebound in prices. On the other hand, a few investors sell their winners way too early.
Also, investors initially tend to underreact to news, events or data releases. However, once things become clear, they have a habit of going with the flow and overreacting, causing dramatic price reactions. These behavioral problems extend trends, thus opening up huge opportunities for momentum players.
So, it’s a way to profit from the general human tendency to extrapolate current trends into the future. Momentum investing 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. 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.
Here are three of the six stocks that made it through this screen:
Headquartered in Santa Clara, CA, Arista Networks, Inc. is a leader in data-driven, client to cloud networking for large data centers, campus and routing environments. Arista Networks benefits from strong momentum and diversification across its top verticals and product lines. The stock has gained 71.5% in the past year but declined 1.9% in the past week. It has a Momentum Score of B.
Headquartered in Houston, TX, Occidental Petroleum Corp. is a global energy company with assets primarily in the United States, the Middle East and North Africa. Occidental Petroleum’s focus on operational efficiency enables it to leverage the increase in commodity prices to improve its balance sheet and liquidity position. The stock has returned 40% in the past year but lost 2% in the past week. It has a Momentum Score of A.
Headquartered in Los Angeles, CA, Houlihan Lokey, Inc. is an investment bank with expertise in mergers and acquisitions, capital markets and financial restructuring. Houlihan Lokey serves corporations and governments worldwide with offices in the United States, Europe, the Middle East and the Asia-Pacific region. The stock has appreciated 58.2% in the past year but declined 5% in the past week. It has a Momentum Score of A.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1874198/3-stocks-witnessing-momentum-anomaly-for-a-winning-portfolio
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.