Is Brocade Communications Systems an Incredible Momentum Stock? 3 Reasons Why BRCD Will Be Tough to Beat
Many investors like to look for momentum in stocks, but this can be very tough to define. There is great debate regarding which metrics are the best to focus on in this regard, and which are not really quality indicators of future performance. Fortunately, with our new style score system we have identified the key statistics to pay close attention to and thus which stocks might be the best for momentum investors in the near term.
This method discovered several great candidates for momentum-oriented investors, but today let's focus in on Brocade Communications Systems, Inc.BRCD as this stock is looking especially impressive right now. And while there are numerous ways in which this company could be a great choice, we have highlighted three of the most vital reasons for BRCD's status as a solid momentum stock below:
Short Term Price Change for Brocade Communications Systems
A great place to look for finding momentum stocks is by inspecting short term price activity. This can help to reflect the current interest in a stock and if buyers or sellers have the upper hand right now. It is especially useful to compare it to the industry as this can help investors pinpoint the top companies in a particular area.
With a one week price change of 0.04% compared to an industry average of 0%, BRCD is certainly well-positioned in this regard. The stock is also looking quite well from a longer time frame too, as the four week price change compares favorably with the industry at large as well.
Quarter EPS Estimate Change for Brocade Communications Systems Stock
While looking at price performance or full year earnings can be essential to understanding a momentum stock, you shouldn't forget about the current quarter EPS and the trend in estimates there. This change can signal how a stock might perform in the next earnings season which is obviously vital for momentum investors.
Right now, BRCD is seeing a nice trend over the past month when it comes to this quarter's earnings estimate projections. In the time frame, EPS estimates for Brocade Communications Systems have gone up by 8.5% compared to an industry average move of 0.2%, suggesting that not only is BRCD heading in the right direction, but it is seeing an increase relative to the industry too.
BRCD Earnings Estimate Revisions Moving in the Right Direction
While the great momentum factors outlined in the preceding paragraphs might be enough for some investors, we should also take into account broad earnings estimate revision trends. A nice path here can really help to show us a promising stock, and we have actually been seeing that with BRCD as of late too.
Over the past month, 3 earnings estimates have gone higher compared to 0 lower for the full year, while we are also seeing 2 upward revisions versus 0 in the downward direction for the next year time frame too. These revisions have helped to boost the consensus estimate as a month ago BRCD was expected to post earnings of 83 cents per share for the full year, though today it looks to have EPS of 90 cents per share for the full year now, representing a solid increase which is something that should definitely be welcomed news to would-be investors.
Given these factors, investors shouldn't be surprised to note that we have BRCD as a security with a Zacks Rank #1 (Strong Buy) and a Momentum Score of 'A'. So if you are looking for a fresh pick that has potential to move in the right direction, definitely keep BRCD on your short list as this looks be a stock that is very well-positioned to soar in the near term.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.