Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at WellCare Health Plans , which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. WellCare Health Plans currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?
In order to see if WCG is a promising momentum pick, let's examine some Momentum Style elements to see if this Medicare and Medicaid coverage provider holds up.
Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For WCG, shares are up 0.24% over the past week while the Zacks Medical - HMOs industry is flat over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 11.17% compares favorably with the industry's 2.11% performance as well.
Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Shares of WellCare Health Plans have increased 20.19% over the past quarter, and have gained 25.62% in the last year. On the other hand, the S&P 500 has only moved 0.86% and 4.12%, respectively.
Investors should also pay attention to WCG's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. WCG is currently averaging 1,103,102 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock's price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with WCG.
Over the past two months, 10 earnings estimates moved higher compared to 1 lower for the full year. These revisions helped boost WCG's consensus estimate, increasing from $13.59 to $14.00 in the past 60 days. Looking at the next fiscal year, 6 estimates have moved upwards while there have been 1 downward revision in the same time period.
Bottom Line
Taking into account all of these elements, it should come as no surprise that WCG is a #2 (Buy) stock with a Momentum Score of B. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep WellCare Health Plans on your short list.
Image: Bigstock
Are You Looking for a Top Momentum Pick? Why WellCare Health Plans (WCG) is a Great Choice
Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at WellCare Health Plans , which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. WellCare Health Plans currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?
In order to see if WCG is a promising momentum pick, let's examine some Momentum Style elements to see if this Medicare and Medicaid coverage provider holds up.
Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For WCG, shares are up 0.24% over the past week while the Zacks Medical - HMOs industry is flat over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 11.17% compares favorably with the industry's 2.11% performance as well.
Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Shares of WellCare Health Plans have increased 20.19% over the past quarter, and have gained 25.62% in the last year. On the other hand, the S&P 500 has only moved 0.86% and 4.12%, respectively.
Investors should also pay attention to WCG's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. WCG is currently averaging 1,103,102 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock's price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with WCG.
Over the past two months, 10 earnings estimates moved higher compared to 1 lower for the full year. These revisions helped boost WCG's consensus estimate, increasing from $13.59 to $14.00 in the past 60 days. Looking at the next fiscal year, 6 estimates have moved upwards while there have been 1 downward revision in the same time period.
Bottom Line
Taking into account all of these elements, it should come as no surprise that WCG is a #2 (Buy) stock with a Momentum Score of B. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep WellCare Health Plans on your short list.