Are You Looking for a Top Momentum Pick? Why Dutch Bros (BROS) is a Great Choice

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.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 Dutch Bros (BROS), a company that currently holds a Momentum Style Score of A. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.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. Dutch Bros 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 BROS is a promising momentum pick, let's examine some Momentum Style elements to see if this drive-thru coffee chain operator and franchisor 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 BROS, shares are up 41.26% over the past week while the Zacks Retail - Restaurants industry is up 1.79% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 36.12% compares favorably with the industry's 0.13% 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. Shares of Dutch Bros have increased 49.35% over the past quarter, and have gained 64.47% in the last year. On the other hand, the S&P 500 has only moved 10.53% and 37.42%, respectively.Investors should also pay attention to BROS'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. BROS is currently averaging 3,691,905 shares for the last 20 days.Earnings OutlookThe 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 BROS.Over the past two months, 7 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost BROS's consensus estimate, increasing from $0.39 to $0.45 in the past 60 days. Looking at the next fiscal year, 5 estimates have moved upwards while there have been 2 downward revisions in the same time period.Bottom LineTaking into account all of these elements, it should come as no surprise that BROS 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 Dutch Bros on your short list.Free: 5 Stocks to Buy As Infrastructure Spending SoarsTrillions of dollars in Federal funds have been earmarked to repair and upgrade America’s infrastructure. In addition to roads and bridges, this flood of cash will pour into AI data centers, renewable energy sources and more.In, you’ll discover 5 surprising stocks positioned to profit the most from the spending spree that’s just getting started in this space.Download How to Profit from the Trillion-Dollar Infrastructure Boom absolutely free today.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 Dutch Bros Inc. (BROS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks