I’ve by no means really helpful shopping for shares of GameStop Corp. (NYSE: GME).
However the day earlier than that inventory peaked again in January, Inexperienced Zone Fortunes co-editor Charles Sizemore and I helped our readers lock in a revenue of greater than 100% … on a unique “momentum” inventory.
We despatched that “promote” alert to our subscribers on January 27.
We really helpful they purchase the inventory a mere month earlier … within the December concern of our flagship e-newsletter, Inexperienced Zone Fortunes.
Our detailed, 6-page write-up on that firm outlined the rationale for getting shares.
That’s our fashion. We gave our readers the whole lot they wanted to make a worthwhile commerce.
It had nothing to do with r/WallStreetBets or the cult of Robinhood merchants who’ve made runs on “momentum shares.”
Frankly, that’s not our sport.
Charles and I, and our analysis analyst, Matt Clark … we observe a much more disciplined strategy. We leverage worth momentum to determine market-beating shares for our readers. However we do it “scientifically,” if you’ll. We don’t look solely at momentum.
And we certain as hell don’t advocate shopping for shares simply because there’s buzz constructing on an web message board.
As an alternative, we concentrate on “well-rounded” inventory suggestions.
Introducing: The Inexperienced Zone Rankings Mannequin for Shares
Let me ask you this…
Would you purchase a “momentum” inventory in the event you needed to overpay for it? Say its price-to-earnings ratio was increased than 90% of shares out there?
What a few so-called “worth” inventory — would you purchase a worth inventory for, say, 70 cents on the greenback … in the event you knew that firm had 10 instances extra debt on its books than money? And that it was shedding cash quarter after quarter?
Taking a look at progress … what if a small firm was getting smaller, as a result of its revenues and earnings have been shrinking yr after yr?
Would you wish to spend money on that firm?
In fact you wouldn’t!
You’d wish to search for the reverse — to determine stable corporations with robust fundamentals, that are additionally buying and selling at truthful valuations … and which nonetheless have rising revenues and earnings. If their inventory worth can be exhibiting market-leading momentum — indicating it’s in excessive demand — then all the higher!
Briefly, you can also make probably the most cash in “well-rounded” shares — these with a positive stability of the components that show to drive inventory returns.
And that’s precisely what my Inexperienced Zone Rankings mannequin does.
Should you frequent Cash & Markets, you may be aware of the system. However I’ll give a fast rundown.
It charges every of the 8,000 or so shares out there on six components. Three are price-based: momentum, measurement and volatility.
Three are based mostly on the corporate’s fundamentals: worth, high quality and progress.
In the end, my mannequin assigns a rating of 0 to 100 to every inventory. And our analysis thus far proves that top-rated shares can beat the broader market by not less than 3-to-1.
How We Discover High Momentum Shares — With out Reddit
Take, as an illustration, the inventory Charles and I really helpful in our December 2020 concern of Inexperienced Zone Fortunes.
My mannequin rated that inventory 97 out of 100 once we really helpful it to our readers. It was a well-rounded inventory, with prime scores in high quality (99), momentum (97), volatility (91) and progress (88).
Plus, Charles and I recognized a hidden momentum issue that promised to ship this explicit inventory ripping increased. We wrote: “If [this factor comes to fruition], we may see the inventory pop to $110 or $120 in a rush.”
Effectively, it occurred in late January. Solely our goal estimates of $110 to $120 per share proved too conservative. The inventory surged all the best way to $169 … the place we advised our readers to lock of their income of greater than 100%!
However right here’s the factor — we aren’t carried out with this inventory. We advised people to promote simply half of their place. As a result of, finally, we consider the inventory will go on to make us even bigger income over the subsequent six to 36 months.
Once more, this can be a rock-solid, well-rounded inventory. It charges extremely on all six of my mannequin’s components … and nonetheless scores a 93 out of 100 total two months after our preliminary advice.
It’s simply the kind of inventory that Charles and I are loading the Inexperienced Zone Fortunes portfolio with. And it’s one in all many double- and triple-digit revenue alternatives we’ve recognized prior to now yr.
We aren’t carried out, both.
Subsequent week, Charles and I are doing one thing we haven’t carried out but for our Inexperienced Zone Fortunes subscribers.
Within the March concern, we’ll reveal our two highest-conviction inventory suggestions for the month in an trade that’s constructing extra momentum on daily basis. We received a style of this transfer up through the current tech sell-off, and we’re satisfied that’s solely the start.
This trade is buying and selling at dirt-cheap valuations, and occasions outdoors of the markets (equivalent to President Biden’s initiatives) will gasoline the momentum on these two shares even increased.
If you wish to get in on the bottom flooring of this commerce — and plenty of others prefer it sooner or later — click on here to seek out out how one can entry Inexperienced Zone Fortunes right now.
Together with our greatest month-to-month picks, you’ll additionally learn the way you should use momentum to “purchase excessive … promote increased.” Try the main points of my Millionaire Grasp Class here.
To good income,
Chief Funding Strategist
Adam O’Dell is the chief funding strategist of Cash & Markets and has held the title of Chartered Market Technician for practically a decade. He’s the editor of Green Zone Fortunes, the development and momentum options-trading powerhouse Home Run Profits and the time-tested swap system 10X Profits.