The Momentum Stock for the Long-Term: Meta Platforms (META)

Investors, whether seasoned or new to the game, aim to capitalize on the stock market by selecting investments that outperform the market. A strategy often employed by investors is to look at certain indicators that aid in predicting stock success. In this context, Meta Platforms (META), which operates the largest social media network in the world, emerges as a stock that could potentially offer this long-term outperformance. This assessment is based on Meta's strong position within the Zacks Rank and Style Scores system.

Understanding Zacks Style Scores

Zacks Style Scores serve as a suite of indicators that complement the Zacks Rank to assist investors in identifying stocks with the best odds of market outperformance. Stocks are evaluated based on their value, growth, and momentum traits, receiving a grade ranging from A to F, with A being the highest. The scores are divided into three categories: the Value Score for identifying undervalued stocks, the Growth Score for companies with strong financials and future outlook, and the Momentum Score that focuses on stocks showing upward trends in price or earnings outlook. Additionally, there's the VGM Score, which is a composite score that takes into account all three individual Style Scores.

The Role of Zacks Rank in Stock Selection

The Zacks Rank is a proprietary model that focuses on earnings estimate revisions to help make investment decisions. Stocks are given rankings from #1 (Strong Buy) to #5 (Strong Sell). History suggests that stocks with a #1 ranking have significantly outperformed the S&P 500. However, with hundreds of stocks rated as Strong Buy or Buy, the Style Scores are essential to narrow down the choices.

Investors are generally advised to consider stocks with a Zacks Rank of #1 or #2 and also have Style Scores of A or B, indicating a higher probability of success. The interplay between the Zacks Rank and Zacks Style Scores is crucial, as it ensures alignment between a stock's earnings trajectory and other attractive investment characteristics.

Why META Stands Out

Meta Platforms, owner of prominent applications like Facebook, Instagram, and WhatsApp, is noted as a #1 (Strong Buy) on the Zacks Rank, holding a VGM Score of B. As a stock that appeals to momentum investors due to its A grade Momentum Style Score and a notable 20.1% rise in share value over four weeks, META is backed by positive revisions in earnings estimates from analysts for fiscal 2024. The average earnings surprise stands at 19.7%, further indicating its potential for continued outperformance.

Combining a robust Zacks Rank and high Momentum and VGM Style Scores, Meta Platforms represents a compelling choice for investors' portfolios.

Investment, Momentum, META