For Immediate Release
Chicago, IL – March 24, 2023 – Stocks in this week’s article are Omnicom Group OMC, Inter Parfums IPAR and W.W. Grainger GWW.
3 Best Momentum Stocks Banking of the Driehaus Strategy
The Driehaus strategy is known as the "buy high and sell higher" theory. No doubt, it's a successful investment strategy that helped Richard Driehaus make a place in Barron's All-Century Team. In fact, to choose the best momentum stocks, the Driehaus strategy can be applied.
To that end, stocks like Omnicom Group, Inter Parfums and W.W. Grainger have been selected as the momentum picks for the day using the Driehaus strategy.
A Detailed Look Into the Driehaus Strategy
Regarding the strategy, Driehaus once said: "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 decline and try to guess when it will turn around." In line with this insight, the American Association of Individual Investors (AAII) took into account the percentage 50-day moving average as one of the key criteria before creating a portfolio following Driehaus' philosophy.
It is calculated by dividing the numerator (month-end price minus 50-day moving average of month-end price) by the 50-day moving average of the month-end price. Another momentum indicator — positive relative strength — has also been included in this strategy. A positive percentage 50-day moving average indicates that the stock is trading at a price higher than its 50-day moving average level, indicating an uptrend.
Moreover, AAII found that Driehaus primarily focuses on strong earnings growth rates and impressive earnings projections to pick potential outperformers. Companies with a strong history of beating estimates are also given importance in this strategy, which was made to provide better returns over the long term.
Here are three of the 13 stocks:
Omnicom Group is one of the largest advertising, marketing, and corporate communications companies in the world. Omnicom has a Momentum Score of A. The trailing four-quarter earnings surprise for OMC is 8%, on average.
Inter Parfums is engaged in the manufacturing, distribution and marketing of a wide range of fragrances and related products. Inter Parfums has a Momentum Score of B. The trailing four-quarter earnings surprise for IPAR is 36.2%, on average.
W.W. Grainger is a broad-line, business-to-business distributor of maintenance, repair, and operating (MRO) products and services. W.W. Grainger has a Momentum Score of B. The trailing four-quarter earnings surprise for GWW is 9.8%, on average.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2069479/3-best-momentum-picks-banking-on-the-driehaus-strategy
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