What’s the definition of a momentum stock? It’s a question we ask all the time here, because the answer both matters and is probably impossible to pin down.
A rising share price is an obvious place to start. But what if everything is rising? Perhaps a share price rising faster than the market average is a better definition, then. But over what duration? And while we’re at it, is price all that matters? Wouldn’t it be better for a stock chart to reflect something more than optimism or speculation?
Our Great Expectations screen, which has been in service since 2011, does not alight on one answer. By asking for all of the above and more, it provides a much broader – and I would argue better – definition of a momentum stock than some of our more simplistic takes, such as the quarterly Momentum Classics screen.