Are You Looking for a Top Momentum Pick? Why NetApp (NTAP) is a Great Choice

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In "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. 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 NetApp (NTAP), 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. NetApp currently has a Zacks Rank of #1 (Strong 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? In order to see if NTAP is a promising momentum pick, let's examine some Momentum Style elements to see if this data storage company holds up. 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 NTAP, shares are up 7.38% over the past week while the Zacks Computer- Storage Devices industry is down 3.89% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 2.13% compares favorably with the industry's 1.5% performance as well. While any stock can see its price increase, it takes a real winner to consistently beat the market. That is why looking at longer term price metrics -- such as performance over the past three months or year -- can be useful as well. Over the past quarter, shares of NetApp have risen 27.38%, and are up 55.84% in the last year. On the other hand, the S&P 500 has only moved 3.19% and 16.94%, respectively. Investors should also pay attention to NTAP'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. NTAP is currently averaging 2,307,587 shares for the last 20 days. Earnings Outlook 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 a nice path here can be promising. We have recently been noticing this with NTAP. Over the past two months, 8 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost NTAP's consensus estimate, increasing from $8.88 to $10.05 in the past 60 days. Looking at the next fiscal year, 9 estimates have moved upwards while there have been no downward revisions in the same time period. Bottom Line Taking into account all of these elements, it should come as no surprise that NTAP 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 NetApp on your short list. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.

Are You Looking for a Top Momentum Pick? Why NetApp (NTAP) is a Great Choice

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