What Makes Comfort Systems (FIX) a Strong Momentum Stock: Buy Now?
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 Comfort Systems (FIX), which currently has a Momentum Style Score of A. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.
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. Comfort Systems 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 FIX that show why this heating, ventilation and air conditioning company shows promise as a solid momentum pick.
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 is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For FIX, shares are up 24.28% over the past week while the Zacks Building Products - Air Conditioner and Heating industry is up 5.53% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 30% compares favorably with the industry's 0.79% 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 Comfort Systems have risen 60.15%, and are up 115.29% in the last year. In comparison, the S&P 500 has only moved 14.12% and 16.19%, respectively.
Investors should also pay attention to FIX'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. FIX is currently averaging 406,624 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock's price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with FIX.
Over the past two months, 1 earnings estimate moved higher compared to none lower for the full year. This revision helped boost FIX's consensus estimate, increasing from $18.99 to $21.04 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 FIX 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 Comfort Systems on your short list.
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Comfort Systems USA, Inc. (FIX) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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