Is Amalgamated Financial (AMAL) Stock Outpacing Its Finance Peers This Year?

Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades and downgrades, please see our analyst ratings page.

• Northcoast Research analyst Jim Sanderson downgraded the rating for Jack in the Box Inc. from Buy to Neutral. Jack In The Box shares closed at $45.08 on Wednesday. See how other analysts view this stock.
• Keybanc analyst Jackson Ader downgraded the rating for Zeta Global Holdings Corp. from Overweight to Sector Weight. Zeta Global shares closed at $17.76 on Wednesday. See how other analysts view this stock.
• Evercore ISI Group analyst Thomas Gallagher downgraded Jackson Financial Inc. from In-Line to Underperform but raised the price target from $74 to $95. Jackson Finl shares closed at $108.20 on Wednesday. See how other analysts view this stock.
• BTIG analyst Gregory Lewis downgraded the rating for Plug Power Inc. from Buy to Neutral. Plug Power shares closed at $1.97 on Wednesday. See how other analysts view this stock.
• Keybanc analyst Eric Gonzalez downgraded Papa John’s International, Inc. from Overweight to Sector Weight. Papa John’s shares closed at $50.79 on Wednesday. See how other analysts view this stock.

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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 Amalgamated Financial (AMAL), 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. Amalgamated Financial 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?

In order to see if AMAL is a promising momentum pick, let's examine some Momentum Style elements to see if this bank 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 AMAL, shares are up 8.65% over the past week while the Zacks Financial - SBIC & Commercial Industry industry is up 1.51% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 9.38% compares favorably with the industry's 0.26% performance as well.

Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Over the past quarter, shares of Amalgamated Financial have risen 20.7%, and are up 87.07% in the last year. On the other hand, the S&P 500 has only moved 12.69% and 37.58%, respectively.

Investors should also take note of AMAL'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, AMAL is averaging 220,431 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 AMAL.

Over the past two months, 1 earnings estimate moved higher compared to none lower for the full year. These revisions helped boost AMAL's consensus estimate, increasing from $3.29 to $3.46 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 AMAL 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 Amalgamated Financial on your short list.

Zacks Investment Research