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5 Momentum Stocks for Keeping Your Portfolio Warm This Winter
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U.S. stock markets continue to be plagued by inflationary pressure, supply chain snarls, geopolitical turmoil stemming from the Ukraine war and sweeping energy crisis in Europe. The aggressive rate hikes by the Federal Reserve amid the fears of a recession have made investors apprehensive.
Year to date, NASDAQ, Dow Jones Industrial Average and S&P 500 are down 28.6% 6.5% and 16.2%, respectively. Despite higher pent-up demand in the post-pandemic market conditions, the equity markets are likely to be affected in the near term owing to a challenging macroeconomic environment.
Amid such a market scenario, investing in stocks can become particularly challenging. However, investors can take into consideration momentum investing for good returns. Though quite risky, momentum investing can yield great results with proper planning. Momentum investors usually buy high on anticipation that a stock will only appreciate in the near term.
How to Identify Momentum Stocks?
Here the Zacks Style Score can prove beneficial. The Momentum Score indicates when the timing is favorable to enter a stock to gain from the momentum with the highest probability of success.
Therefore, stocks with a good Momentum score and a favorable Zacks Rank are likely to fetch solid returns.
We have shortlisted five such momentum stocks with solid upside potential based on their market capital (> $1 billion), favorable Zacks Rank of #1 (Strong Buy) and/or Zacks Rank #2 (Buy) and a Momentum Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Top Picks
Using the above parameters, we have zeroed on five stocks — DCP Midstream , Helmerich & Payne (HP - Free Report) , Caterpillar (CAT - Free Report) , Casey's General Stores (CASY - Free Report) , and O'Reilly Automotive (ORLY - Free Report) .
In addition to the above-mentioned parameters, these companies also have witnessed positive earnings estimate revisions in the last 30 days. This signifies that the market participants expect healthy growth opportunities for these companies in 2023.
Image Source: Zacks Investment Research
DCP Midstream: DCP Midstream is gaining from increased NGL pipeline throughput. The master limited partnership focuses on strengthening its balance sheet with the foremost priority of reducing debt load. In the third quarter, the partnership paid more than $300 million in absolute debt. The midstream player is benefiting from resilient earnings from its diversified portfolio, having low exposure to volatile commodity prices.
DCP Midstream sports a Zacks Rank #1 with a Momentum Score of B and has a market cap of $8.2 billion. The Zacks Consensus Estimate for current-year earnings has improved by 22 cents to $4.47 per share over the last 30 days indicating year over year increase of 181.2%. The stock price has appreciated 54.5% year to date.
Helmerich & Payne: The company is engaged in the contract drilling of oil and gas wells in the United States & internationally. Its technologically-advanced FlexRigs are much in demand and it has upgraded most of its drilling feet with the latest technology. Meanwhile, customer acceptance of Helmerich & Payne's digitization efforts has led to cost reduction, improvement in efficiency and higher profits. The contract driller's low debt levels, both on an absolute and relative basis, are also positive in this difficult operating environment.
Helmerich & Payne sports a Zacks Rank #1 with a Momentum Score of A and a market cap of $5.1 billion. The Zacks Consensus Estimate for current-year earnings has improved by 74 cents to $4.46 per share over the last 30 days indicating year over year increase of 4,360%. The stock price has appreciated 102.6% year to date.
Caterpillar: The company is one of the biggest global construction and mining equipment manufacturers. Caterpillar’s revenues and earnings performance is benefiting from its cost-saving efforts, robust end-market demand and pricing actions that offset the negative impact of the supply chain woes and inflationary pressures. The Construction Industries’ segment is expected to gain from the rising construction activities in the United States and other parts of the world. Backed by demand for commodities fueled by the energy-transition trend, a thriving mining sector will aid the Resource Industries segment.
Caterpillar carries a Zacks Rank #2 and a Momentum Score of A with a market cap of $122.6 billion. The Zacks Consensus Estimate for current-year earnings has improved by 12 cents to $13.85 per share over the last 30 days indicating year over year increase of 28.1%. The stock price has appreciated 13.7% year to date.
Casey's General Stores: The company is gaining from price and product optimization strategies, increased penetration of private brands, and digital engagements comprising mobile app and online ordering capabilities. Its self-distribution model, strength in the Inside category and store growth opportunities also bode well. Casey’s top and bottom lines grew year over year during first-quarter fiscal 2023. Management anticipates fiscal 2023 same-store Inside sales to increase 4-6% and expects to maintain an Inside margin of about 40%.
Casey's carries a Zacks Rank #2 and a Momentum Score of A with a market cap of $9.1 billion. The Zacks Consensus Estimate for current-year earnings has improved by 49 cents to $10.51 per share over the last 30 days indicating year over year increase of 15.5%. The stock price has appreciated 28.7% year to date.
O'Reilly Automotive: The company is a leading specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States. It is poised to benefit from store openings and distribution centers in profitable regions. O’Reilly’s diverse product portfolio catering to DIY and DIFM customers is driving comps growth.
O'Reilly carries a Zacks Rank #2 and a Momentum Score of A with a market cap of $51 billion. The Zacks Consensus Estimate for current-year earnings has improved by 12 cents to $32.70 per share over the last 30 days indicating year over year increase of 5.1%. The stock price has appreciated 18.5% year to date.
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5 Momentum Stocks for Keeping Your Portfolio Warm This Winter
U.S. stock markets continue to be plagued by inflationary pressure, supply chain snarls, geopolitical turmoil stemming from the Ukraine war and sweeping energy crisis in Europe. The aggressive rate hikes by the Federal Reserve amid the fears of a recession have made investors apprehensive.
Year to date, NASDAQ, Dow Jones Industrial Average and S&P 500 are down 28.6% 6.5% and 16.2%, respectively. Despite higher pent-up demand in the post-pandemic market conditions, the equity markets are likely to be affected in the near term owing to a challenging macroeconomic environment.
Amid such a market scenario, investing in stocks can become particularly challenging. However, investors can take into consideration momentum investing for good returns. Though quite risky, momentum investing can yield great results with proper planning. Momentum investors usually buy high on anticipation that a stock will only appreciate in the near term.
How to Identify Momentum Stocks?
Here the Zacks Style Score can prove beneficial. The Momentum Score indicates when the timing is favorable to enter a stock to gain from the momentum with the highest probability of success.
Therefore, stocks with a good Momentum score and a favorable Zacks Rank are likely to fetch solid returns.
We have shortlisted five such momentum stocks with solid upside potential based on their market capital (> $1 billion), favorable Zacks Rank of #1 (Strong Buy) and/or Zacks Rank #2 (Buy) and a Momentum Score of A or B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Top Picks
Using the above parameters, we have zeroed on five stocks — DCP Midstream , Helmerich & Payne (HP - Free Report) , Caterpillar (CAT - Free Report) , Casey's General Stores (CASY - Free Report) , and O'Reilly Automotive (ORLY - Free Report) .
In addition to the above-mentioned parameters, these companies also have witnessed positive earnings estimate revisions in the last 30 days. This signifies that the market participants expect healthy growth opportunities for these companies in 2023.
Image Source: Zacks Investment Research
DCP Midstream: DCP Midstream is gaining from increased NGL pipeline throughput. The master limited partnership focuses on strengthening its balance sheet with the foremost priority of reducing debt load. In the third quarter, the partnership paid more than $300 million in absolute debt. The midstream player is benefiting from resilient earnings from its diversified portfolio, having low exposure to volatile commodity prices.
DCP Midstream sports a Zacks Rank #1 with a Momentum Score of B and has a market cap of $8.2 billion. The Zacks Consensus Estimate for current-year earnings has improved by 22 cents to $4.47 per share over the last 30 days indicating year over year increase of 181.2%. The stock price has appreciated 54.5% year to date.
Helmerich & Payne: The company is engaged in the contract drilling of oil and gas wells in the United States & internationally. Its technologically-advanced FlexRigs are much in demand and it has upgraded most of its drilling feet with the latest technology. Meanwhile, customer acceptance of Helmerich & Payne's digitization efforts has led to cost reduction, improvement in efficiency and higher profits. The contract driller's low debt levels, both on an absolute and relative basis, are also positive in this difficult operating environment.
Helmerich & Payne sports a Zacks Rank #1 with a Momentum Score of A and a market cap of $5.1 billion. The Zacks Consensus Estimate for current-year earnings has improved by 74 cents to $4.46 per share over the last 30 days indicating year over year increase of 4,360%. The stock price has appreciated 102.6% year to date.
Caterpillar: The company is one of the biggest global construction and mining equipment manufacturers. Caterpillar’s revenues and earnings performance is benefiting from its cost-saving efforts, robust end-market demand and pricing actions that offset the negative impact of the supply chain woes and inflationary pressures. The Construction Industries’ segment is expected to gain from the rising construction activities in the United States and other parts of the world. Backed by demand for commodities fueled by the energy-transition trend, a thriving mining sector will aid the Resource Industries segment.
Caterpillar carries a Zacks Rank #2 and a Momentum Score of A with a market cap of $122.6 billion. The Zacks Consensus Estimate for current-year earnings has improved by 12 cents to $13.85 per share over the last 30 days indicating year over year increase of 28.1%. The stock price has appreciated 13.7% year to date.
Casey's General Stores: The company is gaining from price and product optimization strategies, increased penetration of private brands, and digital engagements comprising mobile app and online ordering capabilities. Its self-distribution model, strength in the Inside category and store growth opportunities also bode well. Casey’s top and bottom lines grew year over year during first-quarter fiscal 2023. Management anticipates fiscal 2023 same-store Inside sales to increase 4-6% and expects to maintain an Inside margin of about 40%.
Casey's carries a Zacks Rank #2 and a Momentum Score of A with a market cap of $9.1 billion. The Zacks Consensus Estimate for current-year earnings has improved by 49 cents to $10.51 per share over the last 30 days indicating year over year increase of 15.5%. The stock price has appreciated 28.7% year to date.
O'Reilly Automotive: The company is a leading specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States. It is poised to benefit from store openings and distribution centers in profitable regions. O’Reilly’s diverse product portfolio catering to DIY and DIFM customers is driving comps growth.
O'Reilly carries a Zacks Rank #2 and a Momentum Score of A with a market cap of $51 billion. The Zacks Consensus Estimate for current-year earnings has improved by 12 cents to $32.70 per share over the last 30 days indicating year over year increase of 5.1%. The stock price has appreciated 18.5% year to date.