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 Granite Point Mortgage Trust (GPMT – Free Report) , 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. Granite Point Mortgage Trust 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.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?
In order to see if GPMT is a promising momentum pick, let’s examine some Momentum Style elements to see if this real estate investment trust 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 if buyers or sellers currently have the upper hand. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For GPMT, shares are up 3.55% over the past week while the Zacks REIT and Equity Trust industry is up 1.59% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 18.7% compares favorably with the industry’s 8.93% performance as well.
While any stock can see its price increase, it takes a real winner to consistently beat the market. That is why looking at longer term price metrics — such as performance over the past three months or year — can be useful as well. Shares of Granite Point Mortgage Trust have increased 26.95% over the past quarter, and have gained 141.95% in the last year. In comparison, the S&P 500 has only moved 8.79% and 34.24%, respectively.
Investors should also take note of GPMT’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. Right now, GPMT is averaging 445,176 shares for the last 20 days.
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 GPMT.
Over the past two months, 2 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost GPMT’s consensus estimate, increasing from $1.14 to $1.35 in the past 60 days. Looking at the next fiscal year, 2 estimates have moved upwards while there have been no downward revisions in the same time period.
Given these factors, it shouldn’t be surprising that GPMT 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 Granite Point Mortgage Trust on your short list.
NEW YORK–(BUSINESS WIRE)–Granite Point Mortgage Trust Inc. (NYSE: GPMT) (“GPMT,” “Granite Point” or the “Company”) today announced that the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share of common stock for the first quarter of 2021. This dividend will be payable on April 19, 2021 to common stockholders of record as of April 1, 2021.
“Our investment objective includes providing our stockholders an attractive income stream in the form of common dividends derived from cash flows produced by our defensively-positioned, conservatively-underwritten and well-diversified investment portfolio comprised of 100% loans,” said Jack Taylor, Granite Point’s Chief Executive Officer, President and Director. “Given the strong performance of our portfolio in the overall market environment, its earnings generation potential, and the level of our taxable income, we believe that increasing our common dividend to $0.25 per share is appropriate. We remain focused on improving our earnings and dividends over time. Together with our Board of Directors, we will continue to evaluate the level of our common stock dividend taking into consideration, among other factors, core profitability of our business, liquidity needs, our capital structure, and market conditions.”
About Granite Point Mortgage Trust Inc.
Granite Point Mortgage Trust Inc. is a Maryland corporation focused on directly originating, investing in and managing senior floating rate commercial mortgage loans and other debt and debt-like commercial real estate investments. Granite Point is headquartered in New York, NY. Additional information is available at www.gpmtreit.com.
Stockholders of Granite Point and other interested persons may find additional information regarding the Company at the Securities and Exchange Commission’s Internet site at www.sec.gov or by directing requests to: Granite Point Mortgage Trust Inc., 3 Bryant Park, 24th floor, New York, NY 10036, telephone (212) 364-5500.