Markets
CHE

Looking for a Top Momentum Stock? 3 Reasons Why Chemed (CHE) is a Great Choice

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 Chemed Corp. ( CHE ) 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 CHE's status as a solid momentum stock below:

Longer Term Price Change for Chemed

While any stock can see a spike in price, it takes a real winner to consistently outperform the market. That is why looking at longer term price metrics-such as performance over the past three months or year-- and comparing these to an industry at large can be very useful.

And in the case of CHE, the results are quite impressive. The company has beaten out the industry at large over the past 12 weeks by a margin of 5.8% to a loss of 0.1% while it has also outperformed when looking at the past year, putting up a gain of 35.1%. Clearly, CHE is riding a bit of a hot streak and is worth a closer look by investors.

Quarter EPS Estimate Change for Chemed 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, CHE 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 Chemed have gone up by 6.2% compared to an industry average move of a negative 0.5%, suggesting that not only is CHE heading in the right direction, but it is seeing an increase relative to the industry too.

CHE 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 CHE as of late too.

Over the past two months, 1 earnings estimate have gone higher compared to 0 lower for the full year, while we are also seeing 1 upward revision versus 0 downward revisions for the next year time frame too. These revisions have helped to boost the consensus estimate as two months ago CHE was expected to post earnings of $6.65 per share for the full year, though today it looks to have earnings per share of $6.69 for the full year now, representing a solid increase which is something that should definitely be welcomed news to would-be investors.

Bottom Line

Given these factors, investors shouldn't be surprised to note that we have CHE as a security with a Zacks Rank #2 (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 CHE on your short list as this looks be a stock that is very well-positioned to soar in the near term.

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 >>

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

CHEMED CORP (CHE): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

CHE

Other Topics

Investing Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More