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5 Momentum Stocks to Buy Now

The major benchmarks posted significant gains over the past one-month period led by a strong rally in crude and encouraging economic data. In this scenario, momentum investing should be a winning strategy for those seeking higher returns in a short spell. This is because the strategy looks to capture profits by buying hot stocks that have been on an uptrend over the past few weeks or months. However, it is to be noted that the strategy is purely speculative and not meant for the weak-hearted.

Oil Price Improves, Economic Data Upbeat

In the current market scenario there is a huge scope for momentum traders to stuff money into their pockets. This is because both The Dow Jones Industrial Average (DJI) and The Standard & Poor's 500 (S&P 500) have improved significantly from the Feb 11 level - the day when Dow plummeted to its lowest level since Feb 6, 2014 and the S&P 500 fell to its lowest level since Apr 11, 2014. In details, Dow and the S&P 500 have improved 11.8% and 11.4% respectively since Feb 11.

Improvement in oil price led to the market recovery. The West Texas Intermediate (WTI) crude futures are currently up around 52% from the 12-year low of $26.21 touched in February. The impressive upside came on the back of improving demand/supply dynamics, which are rebuilding investors' confidence in the rebalancing of the oil market.

Positive economic reports are also driving the broader markets. The jobs data in February set an upbeat note on the labor market. The U.S. economy added 242,000 jobs in February, handily beating the consensus estimate of 194,000, according to the Bureau of Labor Statistics. The tally was also considerably higher than January's upwardly revised job number of 172,000.

Moreover, the housing industry remained firmer than what most believed. The U.S. Department of Commerce reported that housing starts increased 5.2% from January to a seasonally adjusted annual rate of 1,178,000 in February, which was a five-month high. On top of that, consumer spending levels on both big ticket items and other discretionary products increased at the fastest pace in eight months in January.

Banking on these economic data that continues to show that the U.S. economy is expanding and considerable gains in oil prices since the mid-February lows, it is expected that the broader markets will continue its bull run. Moreover, the Federal Reserve's dovish stance - of keeping interest rates on hold - taken at the end of its two-day policy meeting last week too charged up investors. China's stimulus measures, on the other hand, raised hopes of a much stable global economy that would in turn contain the volatility in the broader markets.

5 Momentum Stocks on Fire

On this optimistic note, it will be prudent to invest in momentum stocks. A great way to narrow down momentum stocks is by looking at their short-term price activity as this reflects the current interest in a stock as and their earnings momentum.

We have picked five stocks using our Zacks style score system that promises momentum at the moment. These stocks not only have a Zacks Rank #1 (Strong Buy) or 2 (Buy) but also have a momentum score of 'A' and 'B'. They also rallied considerably in the last four weeks.

NV5 Holding Inc NVEE : Hollywood, FL-based NV5 Global primarily provides consulting solutions along with professional and technical engineering services. The company's clients, in both the public and private sectors, belong to the energy, construction, infrastructure and real estate markets in the U.S. The company has gained 27.3% over the past one month. The current-year earnings per share (EPS) estimate has been revised upward by 27.7% over the same time frame.

Momentum Style Score: A

Zacks Rank: #1

Carmike Cinemas Inc. CKEC : Columbus, GA-based Carmike Cinemas is among the leading exhibitors of motion picture in the U.S. The company has gained 42% over the past one month. The current year EPS estimate has been revised upward by 66.8% over the same time frame.

Momentum Style Score: B

Zacks Rank: #1

Forestar Group Inc. FOR : Austin, TX-based Forestar involves in operations related to oil and gas and real estate in the U.S. The company has gained 34.3% over the past one month. The current year EPS estimate has been revised upward by 29.2% over the same time frame.

Momentum Style Score: B

Zacks Rank: #1

J. C. Penney Company, Inc. JCP : Plano, TX-basedJ. C Penney through its wholly owned subsidiary J. C. Penney Corporation, Inc. offers merchandise and services to customers through its department stores, catalogs and website. The company operates stores at both mall and off-mall locations andhas gained 42.3% over the past one month. The current year EPS estimate has been revised upward by 115.4% over the same time frame.

Momentum Style Score: A

Zacks Rank: #2

Bridgepoint Education, Inc. BPI : ThisSan Diego, CA-based companyis the provider of services related to postsecondary education.The company has gained 61% over the past one month. Its current year EPS estimate has been revised upward by 57.3% over the same time frame.

Momentum Style Score: A

Zacks Rank: #2

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CARMIKE CINEMA (CKEC): Free Stock Analysis Report

FORESTAR GROUP (FOR): Free Stock Analysis Report

PENNEY (JC) INC (JCP): Free Stock Analysis Report

BRIDGEPOINT EDU (BPI): Free Stock Analysis Report

NV5 HOLDING INC (NVEE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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