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Buy 3 Momentum Anomaly Stocks as Markets Fall in the Last Leg of 2025
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Key Takeaways
DDS, SANM and COMM were picked using a screen combining long-term gains and short-term price dips.
Each stock has surged 49.1%-189.9% over the past year but fell 11.4%-15.6% in the past week.
All three hold a Momentum Score of B and meet strict volume, price, and market cap criteria.
The broader U.S. equity markets witnessed a downtrend over the past few days, exhibiting a four-day losing streak on concerns regarding the economic health and the increasing valuation of AI firms. Industry experts widely expect that growth in AI firms would not be commensurate with hefty investments, leading to a market correction in the near term. Moreover, despite better-than-expected job additions of 64,000 in November compared to broad-based expectations of 45,000 job additions, the unemployment rate increased to a four-year high of 4.6%, casting aspersions on the state of the economy.
Volatility in crude oil prices added to the woes. U.S. crude oil prices reportedly fell to the lowest levels since 2021 as a looming surplus weighed on the market. Amid the vagaries of the market, investors often seek to employ time-tested winning strategies to fetch sustained profits. One of the most successful game plans to beat the blues is to bet on momentum stocks, like Dillard's, Inc. (DDS - Free Report) , Sanmina Corporation (SANM - Free Report) and CommScope Holding Company, Inc. (COMM - Free Report) when value or growth investing fails to generate the desired profits.
This approach primarily tends to follow the adage, “the trend is your friend.” At its core, momentum investing is “buying high and selling higher.” It is based on the idea that once a stock establishes a trend, it is more likely to continue in that direction because of the momentum that is already behind it. Momentum investing is a way to profit from the general human tendency to extrapolate current trends into the future. It is based on that gap in time before the mean reversion occurs, i.e., before prices become rational again.
Momentum strategies have been known to be alpha-generative over a long period and across market stages. Therefore, this strategy is quite tricky to implement, as detecting these trends is no child’s play. Here, we have created a strategy to help investors get in on these fast movers and rake in handsome gains. Our screen will help you benefit from long-term price momentum and a short-term pullback in price.
Screening Parameters for Momentum Anomaly Stocks
Percentage Change in Price (52 Weeks) = Top #50: This selects the top 50 stocks with the best percentage price change over the last 52 weeks. This parameter ensures we get the best stocks that have appreciated steadily over the past year.
Percentage Change in Price (1 Week) = Bottom #10: From the above 50 stocks, we then choose those that are also among the 10 worst performers over a short one-week period. This parameter picks the ones that have witnessed a short-term pullback in price.
Momentum Style Score of B or Better: A top Momentum Style Score knocks out a lot of the screening process, as it takes into account several factors that include volume change and performance relative to its peers. It indicates when the timing is best to grab a stock and take advantage of its momentum with the highest probability of success. Stocks with a Momentum Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), handily outperform other stocks.
Current Price greater than $5: The stocks must all be trading at a minimum of $5.
Market Capitalization = Top #3000: We have chosen stocks that are among the top 3000 in terms of market value to ensure the stability of price.
Average 20-Day Volume greater than 100,000: A substantial trading volume ensures that these stocks are easily tradable.
Here are three of the eight stocks that made it through this screen:
Based in Little Rock, AR, Dillard's is a large departmental store chain featuring fashion apparel and home furnishings. The company’s primary product categories comprise women’s and children’s apparel, shoes, accessories and lingerie, men’s clothing and accessories, cosmetics, home and children’s clothing. Its merchandise mix consists of both branded and private-label items.
The stock has surged 49.1% in the past year but declined 11.4% in the past week. Dillard’s has a Momentum Score of B.
Headquartered in San Jose, CA, Sanmina is a global provider of electronics contract manufacturing services. It focuses on engineering and fabricating complex components and also on providing complete end-to-end supply chain solutions to Original Equipment Manufacturers across various end markets, including industrial, medical, defense and aerospace, automotive, communications and cloud infrastructure.
The stock has jumped 82.4% in the past year but declined 15.6% in the past week. Sanmina has a Momentum Score of B.
Headquartered in Hickory, NC, CommScope is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. Since its inception in 1976, the company has created a niche for itself, helping customers scale network capacity, delivering better network response time and performance, and simplifying technology migration.
The stock has soared 189.9% in the past year but lost 11.8% in the past week. CommScope has a Momentum Score of B.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Image: Bigstock
Buy 3 Momentum Anomaly Stocks as Markets Fall in the Last Leg of 2025
Key Takeaways
The broader U.S. equity markets witnessed a downtrend over the past few days, exhibiting a four-day losing streak on concerns regarding the economic health and the increasing valuation of AI firms. Industry experts widely expect that growth in AI firms would not be commensurate with hefty investments, leading to a market correction in the near term. Moreover, despite better-than-expected job additions of 64,000 in November compared to broad-based expectations of 45,000 job additions, the unemployment rate increased to a four-year high of 4.6%, casting aspersions on the state of the economy.
Volatility in crude oil prices added to the woes. U.S. crude oil prices reportedly fell to the lowest levels since 2021 as a looming surplus weighed on the market. Amid the vagaries of the market, investors often seek to employ time-tested winning strategies to fetch sustained profits. One of the most successful game plans to beat the blues is to bet on momentum stocks, like Dillard's, Inc. (DDS - Free Report) , Sanmina Corporation (SANM - Free Report) and CommScope Holding Company, Inc. (COMM - Free Report) when value or growth investing fails to generate the desired profits.
This approach primarily tends to follow the adage, “the trend is your friend.” At its core, momentum investing is “buying high and selling higher.” It is based on the idea that once a stock establishes a trend, it is more likely to continue in that direction because of the momentum that is already behind it. Momentum investing is a way to profit from the general human tendency to extrapolate current trends into the future. It is based on that gap in time before the mean reversion occurs, i.e., before prices become rational again.
Momentum strategies have been known to be alpha-generative over a long period and across market stages. Therefore, this strategy is quite tricky to implement, as detecting these trends is no child’s play. Here, we have created a strategy to help investors get in on these fast movers and rake in handsome gains. Our screen will help you benefit from long-term price momentum and a short-term pullback in price.
Screening Parameters for Momentum Anomaly Stocks
Percentage Change in Price (52 Weeks) = Top #50: This selects the top 50 stocks with the best percentage price change over the last 52 weeks. This parameter ensures we get the best stocks that have appreciated steadily over the past year.
Percentage Change in Price (1 Week) = Bottom #10: From the above 50 stocks, we then choose those that are also among the 10 worst performers over a short one-week period. This parameter picks the ones that have witnessed a short-term pullback in price.
Zacks Rank #1: Stocks sporting a Zacks Rank #1 (Strong Buy) have a proven history of outperformance irrespective of the market conditions. You can see the complete list of today’s Zacks #1 Rank stocks here.
Momentum Style Score of B or Better: A top Momentum Style Score knocks out a lot of the screening process, as it takes into account several factors that include volume change and performance relative to its peers. It indicates when the timing is best to grab a stock and take advantage of its momentum with the highest probability of success. Stocks with a Momentum Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), handily outperform other stocks.
Current Price greater than $5: The stocks must all be trading at a minimum of $5.
Market Capitalization = Top #3000: We have chosen stocks that are among the top 3000 in terms of market value to ensure the stability of price.
Average 20-Day Volume greater than 100,000: A substantial trading volume ensures that these stocks are easily tradable.
Here are three of the eight stocks that made it through this screen:
Based in Little Rock, AR, Dillard's is a large departmental store chain featuring fashion apparel and home furnishings. The company’s primary product categories comprise women’s and children’s apparel, shoes, accessories and lingerie, men’s clothing and accessories, cosmetics, home and children’s clothing. Its merchandise mix consists of both branded and private-label items.
The stock has surged 49.1% in the past year but declined 11.4% in the past week. Dillard’s has a Momentum Score of B.
Headquartered in San Jose, CA, Sanmina is a global provider of electronics contract manufacturing services. It focuses on engineering and fabricating complex components and also on providing complete end-to-end supply chain solutions to Original Equipment Manufacturers across various end markets, including industrial, medical, defense and aerospace, automotive, communications and cloud infrastructure.
The stock has jumped 82.4% in the past year but declined 15.6% in the past week. Sanmina has a Momentum Score of B.
Headquartered in Hickory, NC, CommScope is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. Since its inception in 1976, the company has created a niche for itself, helping customers scale network capacity, delivering better network response time and performance, and simplifying technology migration.
The stock has soared 189.9% in the past year but lost 11.8% in the past week. CommScope has a Momentum Score of B.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.