Momentum investing revolves around the idea of following a stock’s recent trend in either direction. In the “long” context, investors will be essentially be “buying high, but hoping to sell even higher.” With this methodology, taking advantage of trends in a stock’s price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at JD.com (NASDAQ:JD), a company that currently holds a Momentum Style Score of B. We also talk about price changes and earnings estimate revisions, two of the main aspects of the Momentum Style Score.
It’s also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. JD.com, currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks that are rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and have Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Is JD Stock Set to Beat the Market?
In order to see if JD stock is a promising momentum pick, let’s examine some Momentum Style elements to see if this company holds up.
Looking at a stock’s recent price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It’s also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
JD stock is up 1.9% over the past week, while the Zacks Internet – Commerce industry is up 1.04% over the same time period.
Considering longer-term price metrics, like a stock’s performance over the last three months or year, can be advantageous as well. JD stock has increased 7.25% over the past quarter, and JD has gained 12.5% in the last year. In comparison, over the same periods, the S&P 500 has only moved 4.47% and 5.54%, respectively.
Investors should also take note of JD stock’s average trading volume over the last year. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a stock that’s rising and has above-average volume is generally well-positioned, whereas a stock that’s falling on above-average volume is typically poised to fall further. Right now, over the last 20 days, a daily average of 11,376,142 shares of JD stock have changed hands.
The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock’s price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and positive estimate revisions can be promising. We have recently been noticing such a trend with JD stock.
Over the past two months, two 2019 earnings estimates for JD stock moved higher, while none dropped. These revisions helped boost JD’s average earnings per share estimate. The average EPS estimate for JD stock increased from 51 cents to 77 cents in the past 60 days. Looking at the next fiscal year, two estimates have moved upwards in the last two months,while there have been no downward revisions.
The Bottom Line on JD Stock
Taking into account all of these elements, it should come as no surprise that JD is a #1 (Strong Buy) stock with a Momentum Score of B. If you’ve been searching for a fresh pick that’s set to rise in the near-term, make sure to keep JD stock on your short list.
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