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Arista Networks & 2 Momentum Stocks to Buy for Big Gains
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Key Takeaways
Arista Networks has a B Momentum Score, a 10.6% average earnings surprise and 40.9% expected growth.
Western Digital has a B Momentum Score, a 10.5% average earnings surprise and 138.4% expected growth.
Quanta Services has an A Momentum Score, a 21.5% average earnings surprise and 62.7% expected growth.
The Driehaus strategy helps investors identify stocks with the strongest momentum. It follows the principle of the “buy high and sell higher" investment philosophy, a successful investment approach that helped legendary Richard Driehaus earn a place on Barron’s All-Century Team.
Based on this approach, stocks like Arista Networks, Inc. (ANET - Free Report) , Western Digital Corporation (WDC - Free Report) and Quanta Services, Inc. (PWR - Free Report) have emerged as today’s top momentum picks, as identified by the Driehaus strategy.
A Closer Look at the Driehaus Investment 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 percentage 50-day moving average as a key criterion before creating a portfolio following Driehaus’ philosophy.
It is calculated by dividing the numerator (month-end price minus the 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 given importance in this strategy, which was designed to provide better returns over the long term.
Key Screening Criteria Using Research Wizard
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 the 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 for taking advantage of the momentum with the highest probability of success.
These few parameters have narrowed the universe of more than 7,743 stocks to only 16.
Here are three of the 16 stocks:
Arista Networks
Arista Networks develops and sells data-driven, client-to-cloud networking solutions for AI, data centers, campus networks, and routing applications across global markets. It has a Momentum Score of B. The trailing four-quarter earnings surprise for ANET is 10.6%, on average. The company’s expected earnings growth rate for the current year is 40.9%.
Western Digital
Western Digital develops, manufactures and sells hard disk drive-based data storage devices and solutions worldwide. It has a Momentum Score of B. The trailing four-quarter earnings surprise for WDC is 10.5%, on average. The company’s expected earnings growth rate for the current year is 138.4%.
Quanta Services
Quanta Services provides infrastructure solutions for the electric, gas, power generation, communications, manufacturing, pipeline, and energy sectors. It has a Momentum Score of A. The trailing four-quarter earnings surprise for PWR is 21.5%, on average. The company’s expected earnings growth rate for the current year is 62.7%.
View the Zacks #1 Rank List
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Arista Networks & 2 Momentum Stocks to Buy for Big Gains
Key Takeaways
The Driehaus strategy helps investors identify stocks with the strongest momentum. It follows the principle of the “buy high and sell higher" investment philosophy, a successful investment approach that helped legendary Richard Driehaus earn a place on Barron’s All-Century Team.
Based on this approach, stocks like Arista Networks, Inc. (ANET - Free Report) , Western Digital Corporation (WDC - Free Report) and Quanta Services, Inc. (PWR - Free Report) have emerged as today’s top momentum picks, as identified by the Driehaus strategy.
A Closer Look at the Driehaus Investment 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 percentage 50-day moving average as a key criterion before creating a portfolio following Driehaus’ philosophy.
It is calculated by dividing the numerator (month-end price minus the 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 given importance in this strategy, which was designed to provide better returns over the long term.
Key Screening Criteria Using Research Wizard
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
No matter whether the market is good or bad, stocks with a Zacks Rank #1 have a proven history 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 the 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 for taking advantage of the momentum with the highest probability of success.
These few parameters have narrowed the universe of more than 7,743 stocks to only 16.
Here are three of the 16 stocks:
Arista Networks
Arista Networks develops and sells data-driven, client-to-cloud networking solutions for AI, data centers, campus networks, and routing applications across global markets. It has a Momentum Score of B. The trailing four-quarter earnings surprise for ANET is 10.6%, on average. The company’s expected earnings growth rate for the current year is 40.9%.
Western Digital
Western Digital develops, manufactures and sells hard disk drive-based data storage devices and solutions worldwide. It has a Momentum Score of B. The trailing four-quarter earnings surprise for WDC is 10.5%, on average. The company’s expected earnings growth rate for the current year is 138.4%.
Quanta Services
Quanta Services provides infrastructure solutions for the electric, gas, power generation, communications, manufacturing, pipeline, and energy sectors. It has a Momentum Score of A. The trailing four-quarter earnings surprise for PWR is 21.5%, on average. The company’s expected earnings growth rate for the current year is 62.7%.