We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
1 Fintech Disruptor + 2 Mag 7 Stocks to Buy as Momentum Surges
Read MoreHide Full Article
Key Takeaways
Amazon is among 41 stocks flagged by the Driehaus momentum screen focused on rising prices and earnings trend.
MSFT fits the strategy with positive 50-day averages, strong relative strength, and an earnings growth focus.
NU posted a 5.3% average earnings surprise over the past four quarters, reinforcing its momentum profile.
This year, savvy investors seeking outsized returns should focus on Wall Street’s strongest momentum leaders. To uncover stocks with additional upside, they can apply Richard Driehaus’s well-known “buy high and sell higher” philosophy, which has helped earn him a place on Barron’s All-Century Team.
Exploring the Driehaus Investment Strategy in Detail
Regarding the strategy, Driehaus once said, “I would much rather invest in a stock that’s increasing in price and take the risk that it may begin to decline than invest in a stock that’s already in decline and try to guess when it will turn around.” In line with this insight, the American Association of Individual Investors (“AAII”) considered the 50-day moving average as one of the key criteria before creating a portfolio following Driehaus’ philosophy.
It is calculated by dividing the numerator (month-end price minus 50-day moving average of month-end price) by the 50-day moving average of the month-end price. Another momentum indicator — positive relative strength — has also been included in this strategy. A positive 50-day moving average indicates that the stock is trading at a price higher than its 50-day moving average level, indicating an uptrend.
Moreover, AAII found that Driehaus primarily focuses on strong earnings growth rates and impressive earnings projections to pick potential outperformers. Companies with a strong history of beating estimates are also given importance in this strategy, which was made to provide better returns over the long term.
Screening Parameters Using Research Wizard:
To make the strategy more profitable, we have considered only those stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Momentum Score of A or B. Our research shows that stocks with a Style Score of A or B, combined with a Zacks Rank #1 or 2, offer the best upside potential.
Strong EPS growth history ensures an improving business
• Trailing 12-month EPS growth greater than 0 and industry median
Higher EPS growth compared to the industry average indicates superior earnings performance
• Last four-quarter average EPS surprise greater than 5%
Solid EPS surprise history indicates better price performance
• Positive percentage change in 50-day moving average and relative strength over 4 weeks
Positive percentage change in the 50-day moving average and the relative strength signal uptrend
• Momentum Score equal to or less than B
A favorable momentum score indicates that it is ideal for capitalizing on momentum with the highest probability of success.
These few parameters have narrowed the universe of more than 7,743 stocks to only 41.
Here are three of the 41 stocks:
Nu Holdings
Nu Holdings offers a digital banking platform across Latin America, the Cayman Islands and the U.S. Nu Holdings has a Zacks Rank #2 and a Momentum Score of B. The trailing four-quarter earnings surprise for NU is 5.3%, on average.
Amazon
Amazon sells consumer products, and offers advertising and subscription services online and in stores globally. Amazon has a Zacks Rank #2 and a Momentum Score of B. The trailing four-quarter earnings surprise for AMZN is 22.5%, on average.
Microsoft
Microsoft creates and supports software, services, devices and solutions around the world. Microsoft has a Zacks Rank #2 and a Momentum Score of B. The trailing four-quarter earnings surprise for MSFT is 8.5%, on average.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
1 Fintech Disruptor + 2 Mag 7 Stocks to Buy as Momentum Surges
Key Takeaways
This year, savvy investors seeking outsized returns should focus on Wall Street’s strongest momentum leaders. To uncover stocks with additional upside, they can apply Richard Driehaus’s well-known “buy high and sell higher” philosophy, which has helped earn him a place on Barron’s All-Century Team.
By applying the Driehaus strategy, one fintech disruptor, Nu Holdings Ltd. (NU - Free Report) , along with two Magnificent 7 stocks, Amazon.com, Inc. (AMZN - Free Report) and Microsoft Corporation (MSFT - Free Report) , have emerged as strong momentum plays and attractive buying opportunities (read more: These 2 Stocks Are Up 100%+ in 2025-and the Momentum Isn't Over).
Exploring the Driehaus Investment Strategy in Detail
Regarding the strategy, Driehaus once said, “I would much rather invest in a stock that’s increasing in price and take the risk that it may begin to decline than invest in a stock that’s already in decline and try to guess when it will turn around.” In line with this insight, the American Association of Individual Investors (“AAII”) considered the 50-day moving average as one of the key criteria before creating a portfolio following Driehaus’ philosophy.
It is calculated by dividing the numerator (month-end price minus 50-day moving average of month-end price) by the 50-day moving average of the month-end price. Another momentum indicator — positive relative strength — has also been included in this strategy. A positive 50-day moving average indicates that the stock is trading at a price higher than its 50-day moving average level, indicating an uptrend.
Moreover, AAII found that Driehaus primarily focuses on strong earnings growth rates and impressive earnings projections to pick potential outperformers. Companies with a strong history of beating estimates are also given importance in this strategy, which was made to provide better returns over the long term.
Screening Parameters Using Research Wizard:
To make the strategy more profitable, we have considered only those stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Momentum Score of A or B. Our research shows that stocks with a Style Score of A or B, combined with a Zacks Rank #1 or 2, offer the best upside potential.
• Zacks Rank less than or equal to 2
Whether the market is strong or weak, stocks with a Zacks Rank #1 or 2 have a proven track record of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.
• Last 5-year average EPS growth rates above 2%
Strong EPS growth history ensures an improving business
• Trailing 12-month EPS growth greater than 0 and industry median
Higher EPS growth compared to the industry average indicates superior earnings performance
• Last four-quarter average EPS surprise greater than 5%
Solid EPS surprise history indicates better price performance
• Positive percentage change in 50-day moving average and relative strength over 4 weeks
Positive percentage change in the 50-day moving average and the relative strength signal uptrend
• Momentum Score equal to or less than B
A favorable momentum score indicates that it is ideal for capitalizing on momentum with the highest probability of success.
These few parameters have narrowed the universe of more than 7,743 stocks to only 41.
Here are three of the 41 stocks:
Nu Holdings
Nu Holdings offers a digital banking platform across Latin America, the Cayman Islands and the U.S. Nu Holdings has a Zacks Rank #2 and a Momentum Score of B. The trailing four-quarter earnings surprise for NU is 5.3%, on average.
Amazon
Amazon sells consumer products, and offers advertising and subscription services online and in stores globally. Amazon has a Zacks Rank #2 and a Momentum Score of B. The trailing four-quarter earnings surprise for AMZN is 22.5%, on average.
Microsoft
Microsoft creates and supports software, services, devices and solutions around the world. Microsoft has a Zacks Rank #2 and a Momentum Score of B. The trailing four-quarter earnings surprise for MSFT is 8.5%, on average.