News
Enterprise Financial Services (EFSC) is up 10.36% in a week: What you need to know
Momentum investing revolves around the idea of following a stock’s recent trend in either direction. In the “long” context, investors will essentially be “buying high but hoping to sell even higher.” With this methodology, taking advantage of trends in a stock’s price is key; once a stock sets a course, it is more than likely to continue moving that way. The goal is that once a stock follows a fixed path, it will lead to timely and profitable trades.
While many investors like to look for momentum in stocks, it can be very difficult to pin down. There is much debate surrounding which metrics are the best to focus on and which are poor indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps solve this problem for us.
Below we take a look at Corporate Financial Services (EFSC)which currently has a Momentum Style Score of A. We also discuss some of the key drivers of the Momentum Style Score, such as price changes 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. Enterprise Financial Services currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Ranks #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 >>>
Ready to outperform the market?
To see if EFSC is a promising pick in terms of momentum, let’s examine some elements of the Momentum style to see if this financial holding company holds up.
A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and whether buyers or sellers have the upper hand at the moment. It’s also helpful to compare a stock to its industry; this can show investors the best companies in a particular area.
For EFSC, shares are up 10.36% over the past week, while the Zacks Banks – Midwest industry is up 5.52% over the same period. The stock is also looking pretty good on a longer time frame, as the 36.12% monthly price change compares favorably with the industry’s 18% performance as well.
While any stock can see a spike in price, it takes a true winner to consistently outperform the market. Enterprise Financial Services shares are up 34.6% in the last quarter and have gained 27.52% over the last year. On the other hand, the S&P 500 has moved just 7.34% and 19.81%, respectively.
The story continues
Investors should also take note of EFSC’s 20-day average trading volume. Volume is a useful metric in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above-average volume is typically a bullish signal, while a declining stock with above-average volume is typically bearish. EFSC is currently averaging 212,718 shares over the past 20 days.
Earnings outlook
The Zacks Momentum Style Score also factors in trends in estimate revisions in addition to price changes. Note that estimate revision trends also remain at the core of the Zacks Rank. A good run here can help show promise, and we’ve seen that recently with EFSC.
Over the past two months, 3 earnings estimates have moved up compared to none down for the full year. These revisions have helped boost the EFSC consensus estimate, rising from $4.32 to $4.52 over the past 60 days. Looking ahead to the next fiscal year, 3 estimates have moved up, while there have been no downward revisions over the same period.
Conclusion
Taking all of these elements into account, it’s no surprise that EFSC is a #2 Buy stock with a Momentum Score of A. If you’re looking for a new pick that’s expected to rise in the near term, be sure to keep Enterprise Financial Services on your list.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Enterprise Financial Services Corporation (EFSC): Free Stock Analysis Report