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3 Stocks With Great Value & Momentum for Investors Right Now

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As we all know, the world of investment is not free from risks and thus investors equipped with thorough research and analysis are better prepared to face market vagaries.

Investors willing to gain in the short term can consider employing a momentum strategy. Momentum traders cash in on the upward trend in a stock's price or earnings. They believe that these stocks will continue to head in the same direction because of the momentum that is already driving them. However, this strategy is purely speculative in nature and would not be appealing to investors with a low risk appetite.

So along with excellent momentum, it would be quite rewarding to find stocks with low PEs, solid outlooks and decent returns. Here value investing comes into play which screens stocks that are currently trading at a discount but have tremendous upside left.

Value and momentum investing rarely go hand in hand, considering that these two strategies are largely different. Nonetheless, value stocks usually gain momentum when earnings estimates start moving north on bullish analyst sentiments, indicating robust fundamentals and expectations of outperformance in the near term. The increased optimism leads to an increase in the stock’s price as well.

3 Valuable Momentum Stocks

With the help of Zacks Style Score System, we have identified three stocks that look great from the Momentum and Value perspective, having a solid Zacks Rank, Momentum and Value Style Scores of A, P/E (F1) of less than 20, and an average price change of more than 5% over the last four weeks.

A Zacks Momentum Score of A or B serves as a good indicator to help you identify the ideal time to scoop up a stock and advantage from its momentum with the highest probability of success. Additionally, stocks with a Value Score of A or B coupled with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) are the best investment choices for value investors.

AeroCentury Corp. , an aircraft leasing company, currently carries a Zacks Rank #1 and has gained 7.8% over the last four weeks. The company has a P/E of 7.4x and P/S of 0.6x, reflecting a discount of 9.8% and 64.7% over the industry average of 8.2x and 1.7x, respectively.

Moreover, the company’s earnings estimates are trending up. Over the past two months, current-quarter estimates have increased from 27 cents to 56 cents per share, reflecting an improvement of 107.4%. For 2017, earnings estimates increased 9.9% in the same time period. Moreover, for 2017, EPS is expected to grow 13.5% and revenues 14.5%.

AeroCentury Corp. Price

 

Sanderson Farms, Inc. , a fully-integrated poultry processing company, currently carries a Zacks Rank #1 and has gained 11% over the last four weeks. That said, we have noticed that the company has outperformed its industry in 12-week and 52-week time frames. The company possesses a P/E of 11.6x, showing a discount of 7.2% over the industry average of 12.5x. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for its current-quarter earnings increased 6.7% over the last 60 days. For 2017, earnings estimates increased 24.7% in the same time frame. Moreover, for 2017, EPS is expected to grow 51.4% and revenues 18.8%.

Sanderson Farms, Inc. Price

 

China Automotive Systems, Inc. (CAAS - Free Report) , a leading power steering components and systems supplier, currently carries a Zacks Rank #2 and has gained 12.5% over the last four weeks. We have also noticed that the company has outperformed its industry in 12-week and 52-week time frames. The company possesses a P/E of 6.2x and P/S of 0.4x, highlighting a discount of 49.2% and 20% over the industry average of 12.2x and 0.5x, respectively.

The Zacks Consensus Estimate for its current-quarter earnings increased 30.8% over the last 60 days. For 2017, earnings estimates increased 19.4% in the same time frame. Moreover, for 2017, EPS is expected to grow 22.9% and revenues 5.6%.

China Automotive Systems, Inc. Price

 

Bottom Line    

These two contrasting strategies can effectively complement each other and enhance risk-adjusted returns for your portfolio. These stocks are compelling picks for those seeking high returns in a short spell, as well as for those seeking to pay a relatively low level for each dollar of earnings.

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