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NVIDIA & 2 Momentum Stocks to Buy in October for Big Upside
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Key Takeaways
NVIDIA has a B Momentum Score, 5.8% average earnings surprise and 93.9% expected growth.
TD SYNNEX has an A Momentum Score, 22.7% average earnings surprise and 55.4% expected growth.
KE Holdings has a B Momentum Score, 9.2% average earnings surprise and 93.6% expected growth.
For investors looking to maximize their returns in October, high-momentum stocks deserve a closer look. To identify stocks with strong upside potential, investors can adopt Richard Driehaus’s “buy high and sell higher” strategy, a momentum-based philosophy he famously championed, which helped him earn a place on Barron’s All-Century Team.
Using Richard Driehaus’s momentum-investing strategy, NVIDIA Corporation (NVDA - Free Report) , TD SYNNEX Corporation (SNX - Free Report) and KE Holdings Inc. (BEKE - Free Report) stand out as the top momentum picks, offering attractive entry opportunities for investors at the current levels.
How the Driehaus Momentum Strategy Identifies Winning Stocks
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 one of the key criteria when creating a portfolio aligned with 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 percentage 50-day moving average indicates that the stock is trading above its 50-day moving average, signaling 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 prioritized in this strategy, which was designed to deliver better long-term returns.
Research Wizard’s Stock Selection Criteria
To make the strategy more profitable, we have considered only those stocks that have a Zacks Rank #1 (Strong Buy) and a Momentum Score of A or B. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1, 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 an uptrend
• Momentum Score equal to or less than B
A favorable momentum score indicates that it is ideal to capitalize on the momentum with the highest probability of success.
These few parameters have narrowed the universe of more than 7,743 stocks to only eight.
Here are three of the eight stocks:
NVIDIA
NVIDIA is a global AI infrastructure company serving data centers across the United States, Asia, Europe and other international markets. It has a Momentum Score of B. The trailing four-quarter earnings surprise for NVDA is 5.8%, on average. The company’s expected earnings growth rate for the current year is 93.9% (read more: Sandisk vs. NVIDIA: Which AI Stock Is the Better Buy Now?).
TD SYNNEX
TD SYNNEX is a global IT distributor and solutions aggregator serving customers across the United States, Europe and other international markets. It has a Momentum Score of A. The trailing four-quarter earnings surprise for SNX is 22.7%, on average. The company’s expected earnings growth rate for the current year is 55.4%.
KE Holdings
KE Holdings operates an integrated online and offline platform for housing transactions and services in China. It has a Momentum Score of B. The trailing four-quarter earnings surprise for BEKE is 9.2%, on average. The company’s expected earnings growth rate for the current year is 93.6%.
View the Zacks #1 Rank List
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NVIDIA & 2 Momentum Stocks to Buy in October for Big Upside
Key Takeaways
For investors looking to maximize their returns in October, high-momentum stocks deserve a closer look. To identify stocks with strong upside potential, investors can adopt Richard Driehaus’s “buy high and sell higher” strategy, a momentum-based philosophy he famously championed, which helped him earn a place on Barron’s All-Century Team.
Using Richard Driehaus’s momentum-investing strategy, NVIDIA Corporation (NVDA - Free Report) , TD SYNNEX Corporation (SNX - Free Report) and KE Holdings Inc. (BEKE - Free Report) stand out as the top momentum picks, offering attractive entry opportunities for investors at the current levels.
How the Driehaus Momentum Strategy Identifies Winning Stocks
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 one of the key criteria when creating a portfolio aligned with 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 percentage 50-day moving average indicates that the stock is trading above its 50-day moving average, signaling 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 prioritized in this strategy, which was designed to deliver better long-term returns.
Research Wizard’s Stock Selection Criteria
To make the strategy more profitable, we have considered only those stocks that have a Zacks Rank #1 (Strong Buy) and a Momentum Score of A or B. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1, offer the best upside potential.
• Zacks Rank equal to #1
Whether the market is good or bad, stocks with a Zacks Rank #1 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 an uptrend
• Momentum Score equal to or less than B
A favorable momentum score indicates that it is ideal to capitalize on the momentum with the highest probability of success.
These few parameters have narrowed the universe of more than 7,743 stocks to only eight.
Here are three of the eight stocks:
NVIDIA
NVIDIA is a global AI infrastructure company serving data centers across the United States, Asia, Europe and other international markets. It has a Momentum Score of B. The trailing four-quarter earnings surprise for NVDA is 5.8%, on average. The company’s expected earnings growth rate for the current year is 93.9% (read more: Sandisk vs. NVIDIA: Which AI Stock Is the Better Buy Now?).
TD SYNNEX
TD SYNNEX is a global IT distributor and solutions aggregator serving customers across the United States, Europe and other international markets. It has a Momentum Score of A. The trailing four-quarter earnings surprise for SNX is 22.7%, on average. The company’s expected earnings growth rate for the current year is 55.4%.
KE Holdings
KE Holdings operates an integrated online and offline platform for housing transactions and services in China. It has a Momentum Score of B. The trailing four-quarter earnings surprise for BEKE is 9.2%, on average. The company’s expected earnings growth rate for the current year is 93.6%.