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Zacks.com featured highlights include: Nucor Corp, Williams-Sonoma and Macy's

Published 10/06/2021, 07:30 AM
Updated 07/09/2023, 06:31 AM
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For Immediate Release

Chicago, IL – October 6, 2021 – Stocks in this week’s article are Nucor Corporation (NYSE:NUE) NUE, Williams-Sonoma (NYSE:WSM), Inc. WSM and Macy’s, Inc. M.

Buy These 3 Stocks with Momentum Anomalies for Higher Returns

When value or growth investing fails to fetch sustained profits, one should explore another time-tested winning strategy that simply bets on frontrunner stocks. One of the most successful strategies in this day and age is to get in on momentum stocks at the right time.

We’ve all heard the adage, “the trend is your friend”. At the core, momentum investing is “buying high and selling higher”. It is based on the idea that once a stock establishes a trend, it is more likely to continue in that direction (than move against the drift) because of the momentum that is already behind it. But why does the momentum strategy work?

Well, there are a whole lot of behavioral biases that most investors exhibit in their decision-making. And these emotional responses or rather mistakes are the very reason that makes momentum strategy work.

For instance, some investors are anxious about booking losses and hence hold on to losing stocks for too long, hopeful of a rebound in prices. On the other hand, a few investors sell their winners way too early. Momentum investing is one of the best strategies to avoid making such errors in judgment.

Furthermore, investors initially tend to underreact to news, events or data releases. However, once things become clear, they have a habit to go with the flow and overreact, causing dramatic price reactions. These behavioral problems extend trends, thus opening up huge opportunities for momentum players.

So basically, it’s a way to profit from the general human tendency to extrapolate current trends into the future. Thus, momentum investing is based on that gap in time that exists before the mean reversion occurs, i.e. before prices become rational again.

Momentum strategies have been known to be alpha-generative over a long period and across market stages. So, this strategy is quite tricky to implement, as detecting these trends is no child’s play.

Here, we have created a strategy that will help investors get in on these fast movers and rake in handsome gains. Our screen will help you benefit from both long-term price momentum and a short-term pullback in price.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1805332/buy-these-3-stocks-with-momentum-anomaly-for-higher-returns

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.

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Company: Zacks.com

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Email: pr@zacks.com

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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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This world-changing technology is projected to generate $100s of billions by 2025. From self-driving cars to consumer data analysis, people are relying on machines more than we ever have before. Now is the time to capitalize on the 4th Industrial Revolution. Zacks’ urgent special report reveals 6 AI picks investors need to know about today.

See 6 Artificial Intelligence Stocks With Extreme Upside Potential>>

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Macys, Inc. (M): Free Stock Analysis Report

Nucor Corporation (NUE): Free Stock Analysis Report

WilliamsSonoma, Inc. (WSM): Free Stock Analysis Report

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