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Momentum is one of the strongest and most profitable factors in markets. Simply buying what is going up and selling what is going down is one of the most robust investment strategies out there. Improving that simple strategy using the Zacks Rank and some technical measures of momentum helps identify stocks with promising expectations.
Utilizing one of the Zacks Premium screens, I have identified three stocks that have dramatically outperformed the market YTD, and have high rankings based on their positive earnings revisions. The screen I used was the Zacks #1 Rank Uptrends, which identifies stocks with upward price momentum, market beating relative price strength, trading in the top third of their 52-week price range.
Cadence Design Systems (CDNS - Free Report) offers products and tools that help customers design electronic products. CDNS offers software, hardware, services and reusable designs to electronic systems and semiconductor customers.
Cadence Design system is a Zacks Rank #1 (Strong Buy) stock, indicating upward trending earnings revisions. CDNS stock recently broke out of a weekly consolidation and is pushing near its all-time highs.
Image Source: TradingView
CDNS current quarter sales are expected to grow 11.5% YoY to $1 billion, and current year sales are projected to grow 13.4% YoY to $4 billion. Analysts expect current quarter earnings to grow 6.8% YoY to $1.25 per share, while current year earnings are projected to climb 16.4% to $4.97 per share.
Analysts are in unanimous agreement in revising CDNS earnings higher. In the current quarter analysts have raised earnings expectations by 25%.
Image Source: Zacks Investment Research
Today, CDNS is trading at a one-year forward earnings multiple of 52x. While this is quite high it is only just above its five-year median of 49x. It is also well above the industry average 29x, but CDNS has traded at a significant premium to the industry for most of its history.
Image Source: Zacks Investment Research
Taylor Morrison Home
Taylor Morrison Home (TMHC - Free Report) is a homebuilder and land developer. The company designs, builds, and sells single and multi-family detached and attached homes; and develops lifestyle and master-planned communities. TMHC also develops and constructs multi-use properties consisting of commercial space, retail, and multi-family properties. The company also offers title insurance, closing settlement services, and financial services.
TMHC boasts a Zacks Rank #1 (Strong Buy), indicating upward trending earnings revisions. TMHC is also just below its all-time highs, and looks ready to breakout soon. Analysts have boosted expectations, and earnings projections have been revised higher across timeframes.
Image Source: Zacks Investment Research
TMHC is trading at a one-year forward earnings multiple of 6x, which is considerably lower than the industry average of 10x, and below its five-year median of 7x. Over the last five years Taylor Morrison home stock has compounded at an average rate of 10% annually.
Image Source: Zacks Investment Research
Palo Alto Networks
Palo Alto Networks (PANW - Free Report) is a cybersecurity solutions company. The company offers an array of different products and services including firewalls, secure private cloud software, and DNS security among many other things. PANW sells its products to medium and large enterprises across all major industries.
Over the last one, three, and five years PANW has outperformed the broad market index, even after a challenging 2022 where it experienced a near -40% drawdown. Today, Palo Alto Networks is a Zacks Rank #1 (Strong Buy) stock, with tremendous price momentum propelling it higher.
Image Source: Zacks Investment Research
Palo Alto Networks has some extremely impressive sales and earnings estimates, as well as strong revisions higher over the last three months. Current quarter sales are expected to grow 24% YoY to $1.7 billion, and current year sales are expected to climb 25% to $6.9 billion. Current quarter earnings are projected to grow 53% YoY to $0.92 per share, while current year earnings are expected to expand 59% to $4.01 per share.
Additionally, analysts have unanimously upgraded PAWN earnings estimates over the past 60 days. Next quarter earnings have been revised higher by 20% over that time.
Image Source: Zacks Investment Research
Palo Alto Networks is trading at a one-year forward sales multiple of 8x, which is in line with its five-year median of 8x, and below the industry average of 10x. PANW has maintained a rich valuation its whole history as a public company, so while it is aggressively priced it isn’t unusual for the company or industry.
Image Source: Zacks Investment Research
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Looking for Momentum? Buy These 3 Stocks
Momentum is one of the strongest and most profitable factors in markets. Simply buying what is going up and selling what is going down is one of the most robust investment strategies out there. Improving that simple strategy using the Zacks Rank and some technical measures of momentum helps identify stocks with promising expectations.
Utilizing one of the Zacks Premium screens, I have identified three stocks that have dramatically outperformed the market YTD, and have high rankings based on their positive earnings revisions. The screen I used was the Zacks #1 Rank Uptrends, which identifies stocks with upward price momentum, market beating relative price strength, trading in the top third of their 52-week price range.
https://www.zacks.com/research/screening/tracks/details.php?track_id=32563&pg_id=3&adid=zp_definescreen_momentum&icid=screening-premium_screens-zp_internal-zacks_premium-premium_screens-momentum_
Image Source: Zacks Investment Research
Cadence Design Systems
Cadence Design Systems (CDNS - Free Report) offers products and tools that help customers design electronic products. CDNS offers software, hardware, services and reusable designs to electronic systems and semiconductor customers.
Cadence Design system is a Zacks Rank #1 (Strong Buy) stock, indicating upward trending earnings revisions. CDNS stock recently broke out of a weekly consolidation and is pushing near its all-time highs.
Image Source: TradingView
CDNS current quarter sales are expected to grow 11.5% YoY to $1 billion, and current year sales are projected to grow 13.4% YoY to $4 billion. Analysts expect current quarter earnings to grow 6.8% YoY to $1.25 per share, while current year earnings are projected to climb 16.4% to $4.97 per share.
Analysts are in unanimous agreement in revising CDNS earnings higher. In the current quarter analysts have raised earnings expectations by 25%.
Image Source: Zacks Investment Research
Today, CDNS is trading at a one-year forward earnings multiple of 52x. While this is quite high it is only just above its five-year median of 49x. It is also well above the industry average 29x, but CDNS has traded at a significant premium to the industry for most of its history.
Image Source: Zacks Investment Research
Taylor Morrison Home
Taylor Morrison Home (TMHC - Free Report) is a homebuilder and land developer. The company designs, builds, and sells single and multi-family detached and attached homes; and develops lifestyle and master-planned communities. TMHC also develops and constructs multi-use properties consisting of commercial space, retail, and multi-family properties. The company also offers title insurance, closing settlement services, and financial services.
TMHC boasts a Zacks Rank #1 (Strong Buy), indicating upward trending earnings revisions. TMHC is also just below its all-time highs, and looks ready to breakout soon. Analysts have boosted expectations, and earnings projections have been revised higher across timeframes.
Image Source: Zacks Investment Research
TMHC is trading at a one-year forward earnings multiple of 6x, which is considerably lower than the industry average of 10x, and below its five-year median of 7x. Over the last five years Taylor Morrison home stock has compounded at an average rate of 10% annually.
Image Source: Zacks Investment Research
Palo Alto Networks
Palo Alto Networks (PANW - Free Report) is a cybersecurity solutions company. The company offers an array of different products and services including firewalls, secure private cloud software, and DNS security among many other things. PANW sells its products to medium and large enterprises across all major industries.
Over the last one, three, and five years PANW has outperformed the broad market index, even after a challenging 2022 where it experienced a near -40% drawdown. Today, Palo Alto Networks is a Zacks Rank #1 (Strong Buy) stock, with tremendous price momentum propelling it higher.
Image Source: Zacks Investment Research
Palo Alto Networks has some extremely impressive sales and earnings estimates, as well as strong revisions higher over the last three months. Current quarter sales are expected to grow 24% YoY to $1.7 billion, and current year sales are expected to climb 25% to $6.9 billion. Current quarter earnings are projected to grow 53% YoY to $0.92 per share, while current year earnings are expected to expand 59% to $4.01 per share.
Additionally, analysts have unanimously upgraded PAWN earnings estimates over the past 60 days. Next quarter earnings have been revised higher by 20% over that time.
Image Source: Zacks Investment Research
Palo Alto Networks is trading at a one-year forward sales multiple of 8x, which is in line with its five-year median of 8x, and below the industry average of 10x. PANW has maintained a rich valuation its whole history as a public company, so while it is aggressively priced it isn’t unusual for the company or industry.
Image Source: Zacks Investment Research