For Immediate Release
Chicago, IL – November 27, 2019 - Stocks in this week’s article are Amedisys, Inc. AMED, PC Connection, Inc. CNXN, NRG Energy, Inc. NRG and Target Corporation TGT.
4 Momentum Picks Screened on Driehaus Strategy
Richard Herman Driehaus used the "buy high and sell higher" rule to create an investment approach, which appeals to those having a high level of risk appetite. Investors principally invest in momentum stocks using the Driehaus strategy. The success of this investment approach eventually helped Richard Driehaus make a place in Barron’s All-Century Team.
The American Association of Individual Investors (AAII) proved that the strategy has the potential to offer higher-than-market returns. AAII’s portfolio, which was developed based on the Driehaus strategy, has returned more than 300% since the end of the last bear market compared with 85.5% gains registered by the S&P 500.
A Look at Driehaus’ Strategy
After a detailed study of the Driehaus’ strategy, AAII concluded that it mainly focuses on strong earnings growth rates and impressive prospects to pick potential outperformers. While this strategy was made to provide better returns over the longer haul, companies with a strong history of beating estimates were also given importance.
“I would much rather invest in a stock that’s increasing in price and take the risk that it may begin to decline than invest in a stock that’s already in a decline and try to guess when it will turn around,” Driehaus had said in an interview.
In addition to the 50-day moving average and relative strength, we have considered a few some parameters for picking the best stocks. As companies with a strong history of beating estimates usually outperform the market, we added this to our screen. Also, we have considered only those stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Momentum Score of A or B. Our research shows that stocks with a Style Score of A or B when combined with a Zacks Rank #1 or 2 offer the best upside potential.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/638429/4-momentum-picks-screened-on-driehaus-strategy
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NRG Energy, Inc. (NRG) : Free Stock Analysis Report
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