Momentum Analysis of Affiliated Managers Group (AMG): Strong Buy with B-rated Momentum Score and 1.36% Weekly Gain

Momentum investing is a strategy that revolves around the idea of following a stock's recent trend, regardless of direction. This means buying high and hoping to sell even higher. For investors who follow this methodology, taking advantage of trends in a stock's price is crucial. Once a stock establishes a particular course, it is more likely to continue moving in that direction, leading to timely and profitable trades.

One of the challenges with momentum investing is defining the trend. There is much debate surrounding which metrics are the best indicators of future performance and which are of poor quality. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue.

In this article, we will take a look at Affiliated Managers Group (AMG), which currently has a Momentum Style Score of B. We will also discuss some of the main drivers of the Momentum Style Score, such as price change and earnings estimate revisions.

Affiliated Managers Group: A Strong Buy with Momentum

It's 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. Affiliated Managers Group 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.

To determine if AMG is a promising momentum pick, let's examine some Momentum Style elements. Looking at a stock's short-term price activity is a great way to gauge if it has momentum, as 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 to show investors the best companies in a particular area.

For AMG, shares are up 1.36% over the past week, while the Zacks Financial - Investment Management industry is up 0.82% over the same time period. Shares are also looking quite well from a longer time frame, as the monthly price change of 5.45% compares favorably with the industry's 2.64% performance.

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 Affiliated Managers Group have risen 9.18%, and are up 14.91% in the last year. On the other hand, the S&P 500 has only moved 6.75% and 11.69%, respectively.

Investors should also pay attention to AMG'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. AMG is currently averaging 202,473 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 AMG.

Over the past two months, 5 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost AMG's consensus estimate, increasing from $22.02 to $23.01 in the past 60 days. Looking at the next fiscal year, 5 estimates have moved upwards while there have been no downward revisions in the same time period.

Conclusion

Taking into account all of these elements, it should come as no surprise that AMG is a #1 (Strong Buy) stock with a Momentum Score of B