Why is Hologic (HOLX), a strong momentum stock: Buy Now
Momentum investing revolves around following a stock’s recent trend in any direction. The ‘long’ context will mean that investors will “buy high and hope to sell even more.” This method allows investors to take advantage of trends in stock prices. Once a stock has established a course, it will likely continue on that path. It is important that a stock follows a consistent path to make it profitable and timely.
Investors love to see momentum in stocks. However, it can be difficult to identify. There is much debate about which metrics should be emphasized and which indicators are better for future performance. This is addressed by the Zacks Momentum Style Score.
We take a look below at Hologic (HOLX).A company currently holding 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 are also an addition to the Zacks Rank stock rating system, which has a strong track record of outperforming. Hologic 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 take a look at the Momentum Style score for HOLX, which demonstrates why this medical device maker is a strong momentum pick.
An excellent indicator of momentum for a stock is its short-term price movement. This can show current interest and whether sellers or buyers currently hold the upper hand. A security can be compared to its industry to help investors identify the top companies in that particular sector.
HOLX shares have risen 4.04% in the last week, while Zacks Medical Instruments has risen 2.44% during the same period. As the monthly price changes of 6.48% and 2.74% compare favorably to HOLX’s performance, shares look very good for a longer time period.
Any stock can see a rise in price but it takes a winner to consistently outperforms the market. Hologic shares increased 29.66% during the quarter, and gained 14.16% in a year. On the other hand, the S&P 500 has only moved 11.88% and -14.35%, respectively.
Investors should also pay attention to HOLX’s average trading volume over the past 20 days. Volume can be useful in many ways. HOLX’s average 20-day trading volume establishes a good baseline price-to volume ratio. A stock that is rising with an above-average volume sign is bullish, while a stock that is declining with an above-average volume sign is usually bearish. HOLX has a daily average of 1,543,124 shares over the past 20 days.
Outlook for Earnings
The Zacks Momentum Style Score takes into account price changes as well as trends in estimate revisions. It is important to note that Zacks Rank still considers estimate revision trends. We have been witnessing this with HOLX recently.
2 earnings estimates rose in the last two months compared with none for the whole year. These revisions helped to boost HOLX’s consensus estimate, which increased from $3.46 a $3.48 over the past 60 days. The next fiscal year will see 2 new estimates, while the previous one has not seen any downward revisions.
Bottom line
These factors are why HOLX is a #2 (Buy), stock with a Momentum Score B. Hologic is a good choice if you want to find a stock that’s poised to rise in the near term.
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Hologic, Inc. (HOLX) : Free Stock Analysis Report