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Looking for a fast-paced Momentum stock at a bargain? Consider LendingClub (LC)

Momentum investing is essentially the opposite of the tried-and-true Wall Street adage: “buy low and sell high.” Investors who follow this investment style generally avoid betting on cheap stocks and waiting a long time for them to recover. Rather, they believe that much more money could be made in less time by “buying high and selling high.”

Who doesn’t like betting on fast-trending stocks? But determining the right entry point is not easy. Often, these stocks lose momentum once their valuation exceeds their future growth potential. In such a situation, investors find themselves stuffed with expensive stocks whose increases, or even declines, are limited or even non-existent. So, going all-in on momentum can sometimes be risky.

A safer approach might be to invest in low-priced stocks that have seen recent price momentum. While the Zacks Momentum Style Score (part of the Zacks Style Scores system) helps identify stocks with strong momentum by paying close attention to a stock’s price or earnings trends, our “Quick Momentum When a good deal” is useful for quickly spotting moving stocks whose price remains attractive.

Loan Club (LC) is one of many excellent candidates who made it onto the screen. While there are many reasons why this stock is a great choice, here are the most important ones:

Growing investor interest in a stock is reflected in its recent price rise. A 25.3% price change over the past four weeks positions the stock of this company that connects online borrowers and lenders well in this regard.

While any stock can experience a price increase over a short period of time, it takes a true momentum player to generate positive returns over a longer period of time. LC also meets this criteria, as the stock has gained 2.1% over the past 12 weeks.

Additionally, LC momentum is rapid, as the stock currently has a beta of 1.92. This indicates that the stock is trading 92% above the market in either direction.

Given this price action, it’s no surprise that LC has a Momentum Score of B, indicating that now is a good time to enter the stock to capitalize on the momentum with the greatest probability of success.

In addition to a favorable Momentum Score, an upward trend in earnings estimate revisions has helped LC earn a Zacks Rank #2 (Buy). Our research shows that the momentum effect is quite strong among Zacks Rank #1 and #2 stocks. Indeed, as covering analysts increase their earnings estimates for a stock, more investors become interested in it, helping its price run follow. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>

More importantly, despite its dynamic momentum characteristics, LC trades at a reasonable valuation. In terms of price-to-sales ratio, which is considered one of the best valuation indicators, the stock now looks quite cheap. LC currently trades at 0.96 times sales. In other words, investors only have to pay 96 cents for every dollar of sales.

So, LC seems to have a lot of headroom to operate, and that too at a rapid pace.

In addition to LC, several other stocks are currently passing through our “Quick Momentum on a Good Deal” screen. You can consider investing there and start searching for the newest stocks that meet these criteria.

This isn’t the only screen that could help you find your next winning stock pick. Depending on your personal investing style, you can choose from over 45 Zacks Premium Screens strategically created to beat the market.

Keep in mind, however, that the key to a successful stock picking strategy is ensuring that it has produced profitable results in the past. You can easily do this with the help of Zacks Research Assistant. In addition to allowing you to test the effectiveness of your strategy, the program is equipped with some of our most effective stock selection strategies.

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LendingClub Corporation (LC): Free Stock Analysis Report

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