How it works
Momentum is the observation that stocks that have been rising tend to keep rising for a while, and stocks that have been falling tend to keep falling. This screen flags stocks that have just turned up — a fresh crossing of the moving averages many traders watch — and are already near their yearly high.
We include it on a value site for one reason. The biggest risk in value investing is being right too early: buying a cheap stock that stays cheap for years. Waiting for the trend to turn helps you avoid holding dead money.
Why it works
News seeps into prices slowly. Investors underreact to good news at first, then pile in, then overshoot. Momentum captures the middle part. It also tends to do well in the years when value struggles, and vice versa. That's why combining the two smooths out the ride.
The track record
- Jegadeesh & Titman (1993) showed that buying the past 3–12 months' winners and selling the losers earned about 1% a month on average over 1965–1989.1
- Asness, Moskowitz & Pedersen, "Value and Momentum Everywhere" (2013) found both effects in eight markets and asset classes, with value and momentum negatively correlated with each other. A 50/50 mix was far steadier than either alone.2
The catch
- Momentum crashes. When markets turn sharply — as in 2009 — last year's losers can rally hard and momentum strategies can lose a lot quickly.
- Our signals are short-term. Moving-average crossings are faster and noisier than the 12-month momentum in the academic studies.
- Use it as a filter, not a thesis. A breakout says nothing about what a business is worth. Pair it with a value screen.
Today's darlings
These are the companies that pass the screen right now, ranked the way the screener ranks them. Figures come straight from each company's SEC filings, updated every night. We filter out obvious data oddities (one-time special dividends, blank-check shells, sub-$50M micro-caps) so the list shows names worth a closer look — not recommendations.
See every match, with the arithmetic
Open the screener with Momentum already selected. Free to use; every row explains exactly why it qualified.
Run the Momentum screen- Jegadeesh & Titman, "Returns to Buying Winners and Selling Losers," Journal of Finance (1993).
- Asness, Moskowitz & Pedersen, "Value and Momentum Everywhere," Journal of Finance (2013).
Educational content, not investment advice. Past performance — of people, papers, or backtests — doesn't guarantee future results. Do your own homework before buying anything.