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Zacks.com featured highlights include: DaVita, EchoStar and PennyMac Financial Services
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For Immediate Release
Chicago, IL – April 7, 2020 – Stocks in this week’s article are DaVita Inc. (DVA - Free Report) , EchoStar Corp. (SATS - Free Report) and PennyMac Financial Services, Inc. (PFSI - Free Report) .
3 Momentum Anomaly Stocks to Consider Among Coronavirus Woes
The coronavirus pandemonium has compelled governments across the globe to consider various stimulus packages to reinvigorate the economy as well as impose stiff restrictions on travel and public gatherings to minimize loses by containing the spread of the disease. Yet, the economic fallout is being severely felt with several indicators declining sharply. The world economy will likely go into recession due to the pandemic, with two-third of the population living in developing countries facing unprecedented economic damage.
The March jobs report surprised economists as it showed that the U.S. economy lost 701,000 jobs last month compared with 100,000 expected. It reflected that the early impact of the coronavirus pandemic was much worse than they anticipated, signaling further damage to the economy. With large parts of the United States now under lockdown, millions of people working in retail, restaurants, travel, hotels and leisure industries have lost their jobs and the losses are spreading. Oil and gas companies are laying off workers as oil prices collapse and engineering firms are cutting staff as the airline industry grinds to a halt.
Last Tuesday, U.S. President Donald Trump warned of a “very painful” two weeks as the country battles with a coronavirus surge. The Fed is trying to protect the financial system and insulate the broader economy where short-term pain could turn into long-term suffering if credit crunches prevent companies from obtaining the cash they need to operate, forcing them to lay off workers, delay payments to vendors and shut down factories.
Although a coronavirus-triggered downturn appears inevitable, policymakers’ timely response can help determine how deep it is, how long it lasts and how quickly the economy bounces back from it. As the world gears up to develop a treatment for this deadly disease, economic stimulus packages and an integrated global approach to fight the menace could work wonders. In the meantime, let us all unite against this invisible enemy and advocate social distancing efforts to help in containing the disease.
With this in mind, reacting emotionally to volatile trends can cause more damage to a portfolio’s return than a downturn. When value or growth investing fails to fetch sustained profits, one should explore another time-tested winning strategy that simply bets on the frontrunner stocks. This is known as momentum investing.
At the core, momentum investing is buying high, selling higher. It is based on the idea that once a stock establishes a trend, it is likely to continue in that direction. There’s a whole list of behavioral biases that most investors exhibit. For instance, there are investors who are anxious about booking losses and hence hold on to losing stocks for too long, hopeful of a rebound in prices.
On the other hand, a few investors sell their winners way too early. Momentum investing is one of the best strategies to avoid making such mistakes. So, basically, it’s a way to profit from the general human tendency to extrapolate current trends into the future. Momentum investing is, thus, based on that gap in time, which exists before the mean reversion occurs i.e. before prices become rational again.
Here, we have created a strategy that will help investors get in on these fast movers when there is a short-term pullback in price, and rake in handsome gains.
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks.com featured highlights include: DaVita, EchoStar and PennyMac Financial Services
For Immediate Release
Chicago, IL – April 7, 2020 – Stocks in this week’s article are DaVita Inc. (DVA - Free Report) , EchoStar Corp. (SATS - Free Report) and PennyMac Financial Services, Inc. (PFSI - Free Report) .
3 Momentum Anomaly Stocks to Consider Among Coronavirus Woes
The coronavirus pandemonium has compelled governments across the globe to consider various stimulus packages to reinvigorate the economy as well as impose stiff restrictions on travel and public gatherings to minimize loses by containing the spread of the disease. Yet, the economic fallout is being severely felt with several indicators declining sharply. The world economy will likely go into recession due to the pandemic, with two-third of the population living in developing countries facing unprecedented economic damage.
The March jobs report surprised economists as it showed that the U.S. economy lost 701,000 jobs last month compared with 100,000 expected. It reflected that the early impact of the coronavirus pandemic was much worse than they anticipated, signaling further damage to the economy. With large parts of the United States now under lockdown, millions of people working in retail, restaurants, travel, hotels and leisure industries have lost their jobs and the losses are spreading. Oil and gas companies are laying off workers as oil prices collapse and engineering firms are cutting staff as the airline industry grinds to a halt.
Last Tuesday, U.S. President Donald Trump warned of a “very painful” two weeks as the country battles with a coronavirus surge. The Fed is trying to protect the financial system and insulate the broader economy where short-term pain could turn into long-term suffering if credit crunches prevent companies from obtaining the cash they need to operate, forcing them to lay off workers, delay payments to vendors and shut down factories.
Although a coronavirus-triggered downturn appears inevitable, policymakers’ timely response can help determine how deep it is, how long it lasts and how quickly the economy bounces back from it. As the world gears up to develop a treatment for this deadly disease, economic stimulus packages and an integrated global approach to fight the menace could work wonders. In the meantime, let us all unite against this invisible enemy and advocate social distancing efforts to help in containing the disease.
With this in mind, reacting emotionally to volatile trends can cause more damage to a portfolio’s return than a downturn. When value or growth investing fails to fetch sustained profits, one should explore another time-tested winning strategy that simply bets on the frontrunner stocks. This is known as momentum investing.
At the core, momentum investing is buying high, selling higher. It is based on the idea that once a stock establishes a trend, it is likely to continue in that direction. There’s a whole list of behavioral biases that most investors exhibit. For instance, there are investors who are anxious about booking losses and hence hold on to losing stocks for too long, hopeful of a rebound in prices.
On the other hand, a few investors sell their winners way too early. Momentum investing is one of the best strategies to avoid making such mistakes. So, basically, it’s a way to profit from the general human tendency to extrapolate current trends into the future. Momentum investing is, thus, based on that gap in time, which exists before the mean reversion occurs i.e. before prices become rational again.
Here, we have created a strategy that will help investors get in on these fast movers when there is a short-term pullback in price, and rake in handsome gains.
For the rest of this Screen of the Week article please visit Zacks.com at:https://www.zacks.com/stock/news/857094/3-momentum-anomaly-stocks-to-consider-amid-coronavirus-woes
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.