InterDigital (IDCC) 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 InterDigital (IDCC), 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. InterDigital 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? In order to see if IDCC is a promising momentum pick, let's examine some Momentum Style elements to see if this wireless research and development company holds up.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 IDCC, shares are up 12.19% over the past week while the Zacks Wireless Equipment industry is up 3.92% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 20.14% compares favorably with the industry's 10.27% performance as well.Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Over the past quarter, shares of InterDigital have risen 41.98%, and are up 137.42% in the last year. On the other hand, the S&P 500 has only moved 9.25% and 18.95%, respectively.Investors should also take note of IDCC'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 IDCC is averaging 274,892 shares for the last 20 days..Earnings OutlookThe 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 IDCC.Over the past two months, 3 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost IDCC's consensus estimate, increasing from $11.72 to $14.05 in the past 60 days. Looking at the next fiscal year, 1 estimate has moved upwards while there have been 1 downward revision in the same time period.Bottom LineGiven these factors, it shouldn't be surprising that IDCC is a #2 (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 InterDigital on your short list.One Big Gain, Every Trading DayTo help you take full advantage of this market, you’re invited to access every stock recommendation in all our private portfolios - for just $1.Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That’s about one big gain every day the market was open. Of course, not all our picks are winners, but members have seen recent gains as high as +627% +1,340%, and +1,708%.Imagine how much you could profit with a steady stream of real-time picks from all our services that cover a number of strategies to suit a variety of investing and trading styles.See Stocks Now >>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 InterDigital, Inc. (IDCC): 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