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Analyst Blog

As markets continue to be influenced by speculations over an interest rate hike by the Fed, other factors such as U.S. presidential elections and strengthening of the greenback have induced volatility in the S&P 500 Index. Moreover, a rebound in oil prices is expected to spur volatility in the markets. Consumer spending, which declined in August, will give policymakers more reasons to be cautious about raising the rate.

In such a scenario, momentum investing is one of the most successful strategies to churn out profits for an investor. Although momentum investing is based on technical indicators rather than the fundamentals, and are generally deemed as too complex for an average investor, we at Zacks have crafted the perfect tool to identify momentum-based stocks. Using the ‘Momentum Score’ from our Zacks Style Score system, we have picked the top 5 momentum stocks that are trading cheap right now.

Here we pick the top stocks sporting a winning combination of a Momentum Score of ‘A’ and Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Additionally, to pick out those trading relatively cheap in the market, a forward P/E ratio below 14 is considered.

Apollo Commercial Real Estate Finance, Inc.(ARI - Free Report) is focused on investing, acquiring and managing real estate. After market close on Oct 4, the stock was trading at $15.89 with an attractive F1 P/E of 8.43.

Mitsui & Co. Ltd. (MITSY - Free Report) is a global empire with operations in chemicals, foodstuffs, general merchandise, iron and steel, machinery, nonferrous metals, textiles, energy, and real estate and service industries. After markets closed on Oct 4, the stock was trading at $269.61 with solid F1 P/E of 11.49.

Spark Energy, Inc. (SPKE - Free Report) is an independent retail energy services company. After market close on Oct 4, the stock was trading at $27.12 with a stellar F1 P/E of 11.04.

Jernigan Capital, Inc. (JCAP - Free Report) is a commercial real estate finance company. The stock was trading at $18.00 with an strong F1 P/E of 8.72 at the close of market on Oct 4.

Ultra Petroleum Corp. (UPLMQ - Free Report) is an independent, exploration and production company. After markets closed on Oct 4, the stock was trading at $4.97 with a compelling F1 P/E of 6.43.

Confidential from Zacks

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