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 on Honda Motor Company, Ltd. (NYSE:HMC) 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 HMC’s status as a solid momentum stock below:
Short Term Price Change for Honda Motor Company
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 0.01% compared to an industry average of 0%, HMC 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.
Quarter EPS Estimate Change for Honda Motor Company 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, HMC 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 Honda Motor Company have gone up by 8.6% compared to a flat industry average move, suggesting that not only is HMC heading in the right direction, but it is seeing an increase relative to the industry too.
HMC 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 HMC as of late.
Honda Motor Company, Ltd. Price and Consensus
Honda Motor Company, Ltd. Price and Consensus | Honda Motor Company, Ltd. Quote
Over the past two months, two earnings estimates have gone higher compared to none lower for the full year, while we are also seeing that two estimates has move upwards with no downward revision for the next year time frame. These revisions have helped to boost the consensus estimate, as two months ago, HMC was expected to post earnings of $2.96 per share for the full year, though today it looks to have EPS of $3.21 for the full year, representing a solid increase which is something that should be welcome news to would-be investors.
Bottom Line
Given these factors, investors shouldn’t be surprised to note that we have HMC as a security with a Zacks Rank #2 (Buy) and a Momentum Score of B. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
So if you are looking for a fresh pick that has potential to move in the right direction, definitely keep HMC on your short list as this looks be a stock that is very well-positioned to soar in the near term.
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Honda Motor Company, Ltd. (HMC): Free Stock Analysis Report
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