Advertisement
UK markets closed

  • FTSE 100

    7,895.85
    +18.80 (+0.24%)
     

  • FTSE 250

    19,391.30
    -59.37 (-0.31%)
     

  • AIM

    745.67
    +0.38 (+0.05%)
     

  • GBP/EUR

    1.1607
    -0.0076 (-0.65%)
     

  • GBP/USD

    1.2370
    -0.0068 (-0.55%)
     

  • Bitcoin GBP

    51,993.17
    +742.66 (+1.45%)
     

  • CMC Crypto 200

    1,387.84
    +75.21 (+5.73%)
     

  • S&P 500

    4,967.23
    -43.89 (-0.88%)
     

  • DOW

    37,986.40
    +211.02 (+0.56%)
     

  • CRUDE OIL

    83.24
    +0.51 (+0.62%)
     

  • GOLD FUTURES

    2,406.70
    +8.70 (+0.36%)
     

  • NIKKEI 225

    37,068.35
    -1,011.35 (-2.66%)
     

  • HANG SENG

    16,224.14
    -161.73 (-0.99%)
     

  • DAX

    17,737.36
    -100.04 (-0.56%)
     

  • CAC 40

    8,022.41
    -0.85 (-0.01%)
     
Property:

11 beautiful homes with glorious garden rooms

Investing in a home with a garden room will enable you to enjoy your outside space whatever the weather

Here's Why Targa Resources, Inc. (TRGP) is a Great Momentum Stock to Buy

Zacks Equity Research
·4-min read

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Targa Resources, Inc. (TRGP), which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change 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. Targa Resources, Inc. Currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.

ADVERTISEMENT

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?

Let's discuss some of the components of the Momentum Style Score for TRGP that show why this company shows promise as a solid momentum pick.

Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.

For TRGP, shares are up 2.56% over the past week while the Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships industry is up 2.11% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 8.69% compares favorably with the industry's 1.13% performance as well.

Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Shares of Targa Resources, Inc. Have increased 42.11% over the past quarter, and have gained 134.82% in the last year. In comparison, the S&P 500 has only moved 7.83% and 40.47%, respectively.

Investors should also pay attention to TRGP's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. TRGP is currently averaging 4,883,161 shares for the last 20 days.

Earnings Outlook

The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with TRGP.

Over the past two months, 4 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost TRGP's consensus estimate, increasing from $0.83 to $1.25 in the past 60 days. Looking at the next fiscal year, 6 estimates have moved upwards while there have been no downward revisions in the same time period.

Bottom Line

Given these factors, it shouldn't be surprising that TRGP is a #1 (Strong Buy) stock and boasts a Momentum Score of B. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Targa Resources, Inc. On your short 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
 
Targa Resources, Inc. (TRGP) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research