Full access to Entrepreneur for $5
Subscribe

Here's Why OchZiff Capital Management Group LLC (SCU) is a Great Momentum Stock to Buy

Does OchZiff Capital Management Group LLC (SCU) have what it takes to be a top stock pick for momentum investors? Let's find out.

By
This story originally appeared on Zacks

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.

- Zacks

While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at OchZiff Capital Management Group LLC (SCU), which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.

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. OchZiff Capital Management Group LLC currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and 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 >>>

Set to Beat the Market?

Let's discuss some of the components of the Momentum Style Score for SCU that show why this company shows promise as a solid momentum pick.

A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.

For SCU, shares are up 8.14% over the past week while the Zacks Financial - Investment Management industry is up 3.07% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 15.84% compares favorably with the industry's 0.42% performance as well.

Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Shares of OchZiff Capital Management Group LLC have increased 12.35% over the past quarter, and have gained 121.09% in the last year. On the other hand, the S&P 500 has only moved 7.89% and 30.96%, respectively.

Investors should also take note of SCU's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, SCU is averaging 183,769 shares for the last 20 days.

Earnings Outlook

The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with SCU.

Over the past two months, 1 earnings estimate moved higher compared to none lower for the full year. These revisions helped boost SCU's consensus estimate, increasing from $4.17 to $5.01 in the past 60 days. Looking at the next fiscal year, 1 estimate has moved upwards while there have been no downward revisions in the same time period.

Bottom Line

Given these factors, it shouldn't be surprising that SCU is a #2 (Buy) stock and boasts a Momentum Score of B. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep OchZiff Capital Management Group LLC on your short list.



Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

Download FREE: How to Profit from Trillions on Spending for Infrastructure >>



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

 

OchZiff Capital Management Group LLC (SCU): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research