U.S. Markets close in 2 hrs 6 mins
  • S&P 500

    4,129.56
    -33.70 (-0.81%)
     
  • Dow 30

    33,776.69
    -300.94 (-0.88%)
     
  • Nasdaq

    13,764.39
    -150.38 (-1.08%)
     
  • Russell 2000

    2,177.41
    -54.60 (-2.45%)
     
  • Crude Oil

    62.55
    -0.83 (-1.31%)
     
  • Gold

    1,778.60
    +8.00 (+0.45%)
     
  • Silver

    25.83
    -0.01 (-0.05%)
     
  • EUR/USD

    1.2031
    -0.0010 (-0.0842%)
     
  • 10-Yr Bond

    1.5590
    -0.0420 (-2.62%)
     
  • Vix

    18.94
    +1.65 (+9.54%)
     
  • GBP/USD

    1.3936
    -0.0049 (-0.3470%)
     
  • USD/JPY

    108.1360
    -0.0140 (-0.0129%)
     
  • BTC-USD

    55,919.44
    +1,101.02 (+2.01%)
     
  • CMC Crypto 200

    1,270.38
    +35.97 (+2.91%)
     
  • FTSE 100

    6,859.87
    -140.21 (-2.00%)
     
  • Nikkei 225

    29,100.38
    -584.99 (-1.97%)
     

Here's Why Momentum Investors Will Love Century Communities (CCS)

  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.

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 Century Communities (CCS), 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. Century Communities currently has a Zacks Rank of #1 (Strong 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?

Let's discuss some of the components of the Momentum Style Score for CCS that show why this single-family homebuilder shows promise as a solid momentum pick.

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's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.

For CCS, shares are up 24.63% over the past week while the Zacks Building Products - Home Builders industry is up 6.28% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 37.12% compares favorably with the industry's 20.14% performance as well.

While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Shares of Century Communities have increased 36.4% over the past quarter, and have gained 59.16% in the last year. On the other hand, the S&P 500 has only moved 10.64% and 18.22%, respectively.

Investors should also pay attention to CCS'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. CCS is currently averaging 531,018 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 CCS.

Over the past two months, 3 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost CCS's consensus estimate, increasing from $6.02 to $8.32 in the past 60 days. Looking at the next fiscal year, 2 estimates have 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 CCS is a #1 (Strong Buy) stock and boasts a Momentum Score of A. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Century Communities on your short list.


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
 
Century Communities, Inc. (CCS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research