MP Materials Corp. (MP) is a Great Momentum Stock: Should You Buy?

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In "long context," investors will be essentially be "buying high, but hoping to sell even higher." With 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 that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.Below, we take a look at MP Materials Corp. (MP), a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.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. MP Materials Corp. currently has a Zacks Rank of #2 (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?Let's discuss some of the components of the Momentum Style Score for MP 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 is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.For MP, shares are up 2.59% over the past week while the Zacks Mining - Miscellaneous industry is down 6.75% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 119.27% compares favorably with the industry's 2.19% performance as well.While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Shares of MP Materials Corp. have increased 229.27% over the past quarter, and have gained 522.86% in the last year. In comparison, the S&P 500 has only moved 11.8% and 22.87%, respectively.Investors should also take note of MP'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 MP is averaging 24,739,418 shares for the last 20 days..Earnings OutlookThe Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock's price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with MP.Over the past two months, 3 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost MP's consensus estimate, increasing from -$0.53 to -$0.35 in the past 60 days. Looking at the next fiscal year, 3 estimates have moved upwards while there have been 1 downward revision in the same time period.Bottom LineTaking into account all of these elements, it should come as no surprise that MP is a #2 (Buy) stock with a Momentum Score of B. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep MP Materials Corp. on your short list.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>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 MP Materials Corp. (MP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks