Momentum investing is all in regards to the concept of following a inventory's latest pattern, whic
Momentum investing is all in regards to the concept of following a inventory’s latest pattern, which could be in both route. Within the ‘lengthy’ context, traders will basically be “shopping for excessive, however hoping to promote even larger.” And for traders following this system, making the most of traits in a inventory’s value is essential; as soon as a inventory establishes a course, it’s greater than more likely to proceed shifting in that route. The purpose is that when a inventory heads down a hard and fast path, it would result in well timed and worthwhile trades.
Whereas many traders prefer to search for momentum in shares, this may be very powerful to outline. There’s loads of debate surrounding which metrics are the most effective to give attention to and that are poor high quality indicators of future efficiency. The Zacks Momentum Model Rating, a part of the Zacks Model Scores, helps deal with this concern for us.
Beneath, we check out Outdated Dominion Freight Line (ODFL), which at present has a Momentum Model Rating of B. We additionally focus on a number of the important drivers of the Momentum Model Rating, like value change and earnings estimate revisions.
It is also necessary to notice that Model Scores work as a complement to the Zacks Rank, our inventory ranking system that has a formidable monitor report of outperformance. Outdated Dominion Freight Line at present has a Zacks Rank of #1 (Sturdy Purchase). Our analysis exhibits that shares rated Zacks Rank #1 (Sturdy Purchase) and #2 (Purchase) and Model Scores of A or B outperform the market over the next one-month interval.
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Set to Beat the Market?
With a view to see if ODFL is a promising momentum decide, let’s study some Momentum Model components to see if this trucking firm holds up.
a inventory’s short-term value exercise is a good way to gauge if it has momentum, since this may mirror each the present curiosity in a inventory and if patrons or sellers have the higher hand in the intervening time. It is usually helpful to check a safety to its trade, as this can assist traders pinpoint the highest corporations in a specific space.
For ODFL, shares are up 0.41% over the previous week whereas the Zacks Transportation – Truck trade is down 0.1% over the identical time interval. Shares are trying fairly nicely from an extended timeframe too, because the month-to-month value change of seven.74% compares favorably with the trade’s 7.74% efficiency as nicely.
Whereas any inventory can see its value enhance, it takes an actual winner to constantly beat the market. That’s the reason taking a look at long term value metrics — resembling efficiency over the previous three months or 12 months — could be helpful as nicely. Shares of Outdated Dominion Freight Line have elevated 7.66% over the previous quarter, and have gained 60.9% within the final 12 months. However, the S&P 500 has solely moved 5.87% and 16.21%, respectively.
Traders also needs to take note of ODFL’s common 20-day buying and selling quantity. Quantity is a helpful merchandise in some ways, and the 20-day common establishes a very good price-to-volume baseline; a rising inventory with above common quantity is mostly a bullish signal, whereas a declining inventory on above common quantity is often bearish. ODFL is at present averaging 717,297 shares for the final 20 days.
Earnings Outlook
The Zacks Momentum Model Rating additionally takes under consideration traits in estimate revisions, along with value adjustments. Please observe that estimate revision traits stay on the core of Zacks Rank as nicely. A pleasant path right here can assist present promise, and now we have just lately been seeing that with ODFL.
Over the previous two months, 9 earnings estimates moved larger in comparison with none decrease for the complete 12 months. These revisions helped enhance ODFL’s consensus estimate, rising from $4.95 to $5.31 prior to now 60 days. Trying on the subsequent fiscal 12 months, eight estimates have moved upwards whereas there have been no downward revisions in the identical time interval.
Backside Line
Given these elements, it should not be shocking that ODFL is a #1 (Sturdy Purchase) inventory and boasts a Momentum Rating of B. If you happen to’re in search of a recent decide that is set to soar within the near-term, make sure that to maintain Outdated Dominion Freight Line in your brief checklist.
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Outdated Dominion Freight Line, Inc. (ODFL): Free Inventory Evaluation Report
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.