Cintas is a stock that offers strong momentum: Buy now!
Momentum investing is about following a stock’s trend. This can be in any direction. Investors will be “buying high and hoping to sell higher” in the “long” context. Investors following this strategy should take advantage of price trends. Once a stock has established a course, it will likely continue to move in that direction. If a stock is on a straight path, it will be able to trade in a timely and profitable manner.
Investors love to see momentum in stocks. However, it can be difficult to identify. There is much debate around which metrics are best to focus on and which ones are not good indicators of future performance. This is addressed by the Zacks Momentum Style Score.
Here’s a look at Cintas (CTAS)A company with a Momentum Style Score B is. We will also discuss price change and earnings estimation revisions, which are two main components of the Momentum Style Score.
Style Scores can be used as a complement for the Zacks Rank. This stock rating system has a proven track record of outperforming. Cintas currently holds a Zacks Rank #2 (Buy). Our research shows that stocks rated Zacks rank #1 (Strong buy) or #2 (Buy), as well as Style Scores of A and B, outperform the market during the following one month period.
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Do you want to beat the market?
Let’s look at some components of the Momentum Style score for CTAS to see why this uniform rental company is a solid momentum choice.
It is a good indicator of a stock’s momentum by looking at its current price activity. This can be used to determine current interest as well as whether buyers or sellers are currently in control. Investors can also benefit from comparing a security with its industry to identify the best companies in that area.
CTAS shares have risen 1.58% in the last week, while Zacks Uniform and Related industries has risen 0.29% during the same period. The monthly price change of only 0.82% is a positive comparison to the industry’s performance of 4.05%. Shares look quite good over a longer period.
Longer term price metrics such as performance over the past three months or one year can also be beneficial. Cintas shares have increased 12.25% over the past quarter and 12.95% over the last year. On the other hand, the S&P 500 has only moved 9.41% and -12.82%, respectively.
Investors should also keep an eye on CTAS’s average trading volume for the past 20 days. Volume can be useful in many ways. CTAS’s average 20-day trading volume establishes a good baseline price-to volume. A rising stock with an above-average volume sign is typically bullish, while a falling stock with an above-average volume sign is usually bearish. CTAS has been averaging 331,031 share for the past 20 days.
Outlook for Earnings
The Zacks Momentum Style Score includes many factors, such as estimate revisions and stock price movements. Investors should also note that earnings estimates are important to the Zacks Rank. A nice path here could be very promising. This has been something that we’ve noticed recently with CTAS.
9 earnings estimates were higher than expected over the last two months compared with none for the whole year. These revisions contributed to a rise in CTAS’s consensus estimation, which increased from $12.49 – $12.68 in 60 days. 7 estimates are moving upwards, and 2 have gone down in the past 60 days.
Bottom Line
It shouldn’t surprise that CTAS is a #2 stock (Buy) and has a Momentum Score score of B. Cintas is a great stock to consider if you are looking for a new pick that will rise in the near term.
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Cintas Corporation (CTAS) : Free Stock Analysis Report