American Public Education's Stock Surges: An Analysis for Momentum Investors

Investors who follow momentum investing look for stocks with positive trends, aiming to buy stocks on the rise with the expectation of selling them at even higher prices. A stock that starts on a path of growth or decline is generally expected to continue in that direction, which can lead to profitable trades if the momentum is accurately predicted.

Defining Momentum

Identifying momentum in stocks can be challenging due to different opinions on which metrics should be prioritized. The Zacks Momentum Style Score is one tool that aims to simplify this by focusing on price change and earnings estimate revisions among other factors.

Why American Public Education Stands Out

American Public Education (APEI) has caught the attention of momentum investors with its strong Momentum Style Score of A. The company's recent performance has contributed to this rating, seeing an 18.3% rise in stock price over the previous week, outpacing the Zacks Schools industry's 1.75% growth.

Longer-term price changes also appear promising, with APEI's shares increasing by 46.49% over the past month and 60.17% over the last quarter. This bullish trend continues when looking back over a year, with the stock rising 221.19%, in stark contrast to the more modest gains of the S&P 500 during the same periods.

In addition to price performance, volume can also indicate a stock's momentum. APEI's 20-day average trading volume suggests active interest in the stock. Coupled with rising share prices, high volume can signal further gains.

The Earnings Perspective

APEI's outlook is brightened by positive revisions in earnings estimates, a component of the Zacks Momentum Style Score. In recent times, earnings estimates for the full year have seen an encouraging trend, shifting upwards for APEI from $0.52 to $0.68. Future fiscal year projections also look optimistic, enhancing APEI's investment appeal.

Considering these factors, it's no surprise that APEI holds a rank of #2 (Buy) in addition to its top momentum score. This underlines its potential as a solid pick for those looking to capitalize on short-term stock movements.

Momentum, Stocks, Investing