Royal Gold (RGLD) is a Great Momentum Stock: Should You Buy?
Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following 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 in that direction. 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 Royal Gold (RGLD), a company that currently holds a Momentum Style Score of B. 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. Royal Gold 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 RGLD is a promising momentum pick, let's examine some Momentum Style elements to see if this manager of precious metal royalties holds up.Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.For RGLD, shares are up 7.47% over the past week while the Zacks Mining - Gold industry is up 7.45% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 3.8% compares favorably with the industry's 3.09% performance as well.While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Over the past quarter, shares of Royal Gold have risen 9.89%, and are up 43.53% in the last year. In comparison, the S&P 500 has only moved 7.36% and 38.52%, respectively.Investors should also pay attention to RGLD'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. RGLD is currently averaging 300,576 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 RGLD.Over the past two months, 4 earnings estimates moved higher compared to 1 lower for the full year. These revisions helped boost RGLD's consensus estimate, increasing from $4.70 to $4.99 in the past 60 days. Looking at the next fiscal year, 4 estimates have moved upwards while there have been 1 downward revision in the same time period.Bottom LineTaking into account all of these elements, it should come as no surprise that RGLD is a #2 (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 Royal Gold on your short list.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>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 Royal Gold, Inc. (RGLD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks
Quelle: Zacks
