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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 ChromaDex (CDXC), which currently has a Momentum Style Score of A. 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. ChromaDex 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 CDXC is a promising momentum pick, let's examine some Momentum Style elements to see if this natural products 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 CDXC, shares are up 68.88% over the past week while the Zacks Medical - Biomedical and Genetics industry is down 0.75% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 96.8% compares favorably with the industry's 5.78% performance as well.

While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Shares of ChromaDex have increased 105.46% over the past quarter, and have gained 376.76% in the last year. In comparison, the S&P 500 has only moved 15.2% and 38.09%, respectively.

Investors should also take note of CDXC'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, CDXC is averaging 2,538,904 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 CDXC.

Over the past two months, 3 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost CDXC's consensus estimate, increasing from $0.01 to $0.04 in the past 60 days. Looking at the next fiscal year, 2 estimates have moved upwards while there have been 1 downward revision in the same time period.

Bottom Line

Taking into account all of these elements, it should come as no surprise that CDXC is a #2 (Buy) stock with a Momentum Score of A. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep ChromaDex on your short list.

Zacks Investment Research

U.S. stock markets started November, adding more steam to the ongoing rally. The primary reason was the anticipation of Donald Trump becoming the 47th president of the country. On Nov 5, Trump clinched a significant win in the Presidential election. On Nov 6, all three major stock indexes as well as small-cap benchmarks, jumped.

Consequently, several stocks have shown price strength. We have primarily targeted stocks that have recently been on a bull run. Such stocks have a high chance of carrying the momentum forward.

Five such stocks are — ChromaDex Corp. CDXC, Sezzle Inc. SEZL, Interface Inc. TILE, BGC Group Inc. BGC and Corcept Therapeutics Inc. CORT.

If a stock is continuously witnessing an uptrend, there must be a solid reason or it would have probably crashed. So, looking at stocks capable of beating the benchmark that they have set for themselves seems rational.

However, recent price strength alone cannot create magic. Therefore, other relevant parameters are needed to create a successful investment strategy.

Here’s how you should create the screen to shortlist the current as well as the potential winners.

Screening Parameters:

Percentage Change in Price (4 Weeks) greater than zero: This criterion shows that the stock has moved higher in the last four weeks.

Percentage Change Price (12 Weeks) greater than 10: This indicates that the stock has seen momentum over the last three months. This lowers the risk of choosing stocks that may have drawn attention due to the overwhelming performance of the overall market in a very short period.

Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.

Average Broker Rating 1: This indicates that brokers are also highly hopeful about the stock’s future performance.

Current Price greater than 5: The stocks must all be trading at a minimum of $5.

Current Price/ 52-Week High-Low Range more than 85%: This criterion filters stocks that are trading near their respective 52-week highs. It indicates that these are strong enough in terms of price.

Just these few criteria narrowed down the search from over 7,700 stocks to 18.

Let’s discuss five out of these 18 stocks:

ChromaDex Corp. supply phytochemical reference standards and reference materials, related contract services, and products for the dietary supplement, nutraceutical, food and beverage, functional food, pharmaceutical and cosmetic markets. CDXC’s core business strategy is to use the intellectual property harnessed by its expertise in the area of natural products and in the creation of reference materials to the industry as the basis for providing new and alternative, green, mass marketable products to its customers.

CDXC’s main priority is to create industry-accepted information and provide products and services to every layer of the functional food, pharmaceutical, personal care and dietary supplement markets. ChromaDex markets and sells its products in the United States and Canada. CDXC offers its products through distributors in Europe, South America, Korea, India, Japan, Australia, New Zealand, China, Indonesia, Malaysia, Singapore, Thailand, and Mexico.

The stock price of ChromaDex has soared 115.1% in the past four weeks. The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved 100% over the last seven days.

Sezzle Inc. operates as a technology-enabled payments company primarily in the United States and Canada. SEZL provides its proprietary payments solution in-store and at online retail stores that connect consumers with merchants.

SEZL also offers the Sezzle Platform, which provides a payments solution for consumers that extends credit at the point-of-sale, allowing consumers to purchase and receive the ordered merchandise at the time of sale while paying in installments over time.

The stock price of Sezzle has jumped 54.9% in the past four weeks. The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved 0.1% over the last 90 days.

Interface Inc. designs, produces, and sells modular carpet products primarily worldwide. TILE operates in two segments, Americas, and Europe, Africa, Asia and Australia. TILE offers modular carpets under the Interface and FLOR brand names, luxury vinyl tiles, carpet tiles under the CQuestGB name for use in commercial interiors, include offices, healthcare facilities, airports, educational and other institutions, hospitality spaces, and retail facilities, as well as residential interiors, and modular resilient flooring products.

TILE also provides carpet replacement, installation, and maintenance services; and rubber flooring under the norament and noraplan brand names, as well as produces and sells an adapted version of its carpet tile for the healthcare facilities market.

The stock price of Interface has climbed 33.2% in the past four weeks. It has an expected earnings growth rate of 37% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7% over the last seven days.

BGC Group Inc. operates as a financial brokerage and technology company in the United States and internationally. BGC offers various brokerage products, such as fixed income, such as government bonds, corporate bonds, and other debt instruments, as well as related interest rate derivatives and credit derivatives, equities, energy and commodities, shipping, insurance, and futures and options.

BGC also provides trade execution, connectivity solutions, brokerage services, clearing, trade compression and other post-trade services, information, and other back-office services to an assortment of financial and non-financial institutions. In addition, BGC offers electronic and hybrid brokerage, other financial technology solutions, market data and related information services.

The stock price of BGC Group has surged 18.3% in the past four weeks. The company has expected earnings growth of 20.7% for the current year. The Zacks Consensus Estimate for the current year has improved 6.5% over the last seven days.

Corcept Therapeutics Inc. is engaged in the discovery and development of drugs for the treatment of severe endocrinologic, oncologic, metabolic, and neurologic disorders in the United States. CORT offers Korlym tablets medication for the treatment of hyperglycemia secondary to hypercortisolism in adult patients with endogenous Cushing's syndrome, and for those who have type 2 diabetes mellitus or glucose intolerance and have failed surgery or are not candidates for surgery.

CORT is also developing relacorilant, which is in phase III clinical trial for the treatment of Cushing's syndrome, treatment for adrenal cancer and cortisol excess, which is in phase 1b clinical trial, treatment for prostate cancer which is in phase II clinical trial and nab-paclitaxel in combination with relacorilant, which is in phase III clinical trial to treat platinum-resistant ovarian tumors.

The stock price of Corcept Therapeutics has advanced 18.1% in the past four weeks. It has an expected earnings growth rate of 39.4% for the current year. The Zacks Consensus Estimate for current-year earnings improved 10.1% over the last seven days.

You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today.

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.

Zacks Investment Research

Shares of ChromaDex (CDXC) have been strong performers lately, with the stock up 72.9% over the past month. The stock hit a new 52-week high of $6.18 in the previous session. ChromaDex has gained 301.4% since the start of the year compared to the 3.1% move for the Zacks Medical sector and the -2.3% return for the Zacks Medical - Biomedical and Genetics industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 31, 2024, ChromaDex reported EPS of $0.02 versus consensus estimate of $0.01 while it beat the consensus revenue estimate by 7.93%.

Valuation Metrics

ChromaDex may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

ChromaDex has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 246X current fiscal year EPS estimates, which is a premium to the peer industry average of 24.1X. On a trailing cash flow basis, the stock currently trades at 5X versus its peer group's average of 17.3X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, ChromaDex currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if ChromaDex fits the bill. Thus, it seems as though ChromaDex shares could have a bit more room to run in the near term.

How Does CDXC Stack Up to the Competition?

Shares of CDXC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is MiMedx Group, Inc (MDXG). MDXG has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of A.

Earnings were strong last quarter. MiMedx Group, Inc beat our consensus estimate by 40%, and for the current fiscal year, MDXG is expected to post earnings of $0.30 per share on revenue of $342.97 million.

Shares of MiMedx Group, Inc have gained 27.1% over the past month, and currently trade at a forward P/E of 24.17X and a P/CF of 37.92X.

The Medical - Biomedical and Genetics industry is in the top 38% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CDXC and MDXG, even beyond their own solid fundamental situation.

Zacks Investment Research

When it comes to short-term investing or trading, they say "the trend is your friend." And there's no denying that this is the most profitable strategy. But making sure of the sustainability of a trend to profit from it is easier said than done.

Often, the direction of a stock's price movement reverses quickly after taking a position in it, making investors incur a short-term capital loss. So, it's important to ensure that there are enough factors -- such as sound fundamentals, positive earnings estimate revisions, etc. -- that could keep the momentum in the stock going.

Our "Recent Price Strength" screen, which is created on a unique short-term trading strategy, could be pretty useful in this regard. This predefined screen makes it really easy to shortlist the stocks that have enough fundamental strength to maintain their recent uptrend. Also, the screen passes only the stocks that are trading in the upper portion of their 52-week high-low range, which is usually an indicator of bullishness.

ChromaDex

(CDXC) is one of the several suitable candidates that passed through the screen. Here are the key reasons why it could be a profitable bet for "trend" investors.

A solid price increase over a period of 12 weeks reflects investors' continued willingness to pay more for the potential upside in a stock. CDXC is quite a good fit in this regard, gaining 103.9% over this period.

However, it's not enough to look at the price change for around three months, as it doesn't reflect any trend reversal that might have happened in a shorter time frame. It's important for a potential winner to maintain the price trend. A price increase of 72.9% over the past four weeks ensures that the trend is still in place for the stock of this natural products company.

Moreover, CDXC is currently trading at 91% of its 52-week High-Low Range, hinting that it can be on the verge of a breakout.

Looking at the fundamentals, the stock currently carries a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises -- the key factors that impact a stock's near-term price movements.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here

Another factor that confirms the company's fundamental strength is its Average Broker Recommendation of #1 (Strong Buy). This indicates that the brokerage community is highly optimistic about the stock's near-term price performance.

So, the price trend in CDXC may not reverse anytime soon.

In addition to CDXC, there are several other stocks that currently pass through our "Recent Price Strength" screen. You may consider investing in them and start looking for the newest stocks that fit these criteria.

This is not the only screen that could help you find your next winning stock pick. Based on your personal investing style, you may choose from over 45 Zacks Premium Screens that are strategically created to beat the market.

However, keep in mind that the key to a successful stock-picking strategy is to ensure that it produced profitable results in the past. You could easily do that with the help of the Zacks Research Wizard. In addition to allowing you to backtest the effectiveness of your strategy, the program comes loaded with some of our most successful stock-picking strategies.

Click here to sign up for a free trial to the Research Wizard today.

Zacks Investment Research