Analyst Momentum


The goal of the Analyst Momentum strategy is to earn capital appreciation with a long-term focus. This strategy was developed for investors who were seeking market-beating returns through an analyst-info based portfolio.

Investor Profile

Suitable for investors who are willing to accept above average near-term volatility to obtain higher long-term returns with an objective of capital appreciation.

Fund Strategy

The Analyst Momentum strategy is based on the Zacks Analyst Anomaly Folio available through FOLIOfn.  Despite being publicly available information, analyst recommendations and earnings forecasts can be used to predict future stock prices. Research has shown that many of the outperforming stocks had improving analyst recommendations and earnings estimates over the last four weeks and that the price/sales ratio is a strong complimentary valuation metric in the presence of analyst information.

Stock Selection Process

Investments are selected if they meet the following five criteria:

  • Start with the largest 3,000 publicly tradable US listed stocks, with an average trading volume above 100,000 shares per day, and a current stock price greater than $5
  • Keep only those with a price/sales ratio in the bottom 10%
  • Narrow the list to the 75 stocks with the best improvement in analyst ratings
  • Invest in the 10 stocks with the highest percentage change in the quarterly earnings estimate
  • All stocks are equally weighted and rebalanced weekly