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Are You Looking for a Top Momentum Pick? Why Columbus McKinnon (CMCO) 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 Columbus McKinnon (CMCO - 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. Columbus McKinnon currently has a Zacks Rank of #2 (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.
Let's discuss some of the components of the Momentum Style Score for CMCO that show why this maker of materials handling products and systems shows promise as a solid momentum pick.
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 is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For CMCO, shares are up 8.52% over the past week while the Zacks Manufacturing - Material Handling industry is up 8.37% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 15.74% compares favorably with the industry's 15.74% 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. Shares of Columbus McKinnon have increased 26.55% over the past quarter, and have gained 30.07% in the last year. On the other hand, the S&P 500 has only moved 10.64% and 18.22%, respectively.
Investors should also pay attention to CMCO'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. CMCO is currently averaging 101,214 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 CMCO.
Over the past two months, 4 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost CMCO's consensus estimate, increasing from $0.87 to $1.10 in the past 60 days. Looking at the next fiscal year, 3 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 CMCO is a #2 (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 Columbus McKinnon on your short list.
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Are You Looking for a Top Momentum Pick? Why Columbus McKinnon (CMCO) 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 Columbus McKinnon (CMCO - 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. Columbus McKinnon currently has a Zacks Rank of #2 (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?
Let's discuss some of the components of the Momentum Style Score for CMCO that show why this maker of materials handling products and systems shows promise as a solid momentum pick.
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 is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For CMCO, shares are up 8.52% over the past week while the Zacks Manufacturing - Material Handling industry is up 8.37% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 15.74% compares favorably with the industry's 15.74% 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. Shares of Columbus McKinnon have increased 26.55% over the past quarter, and have gained 30.07% in the last year. On the other hand, the S&P 500 has only moved 10.64% and 18.22%, respectively.
Investors should also pay attention to CMCO'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. CMCO is currently averaging 101,214 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 CMCO.
Over the past two months, 4 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost CMCO's consensus estimate, increasing from $0.87 to $1.10 in the past 60 days. Looking at the next fiscal year, 3 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 CMCO is a #2 (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 Columbus McKinnon on your short list.