Universal Technical Institute (UTI) 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 the '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.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 Universal Technical Institute (UTI), 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. Universal Technical Institute 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 UTI is a promising momentum pick, let's examine some Momentum Style elements to see if this school for auto, motorcycle and marine technicians 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's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.For UTI, shares are up 1.07% over the past week while the Zacks Schools industry is down 1.34% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 26.72% compares favorably with the industry's 2.02% performance as well.While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Over the past quarter, shares of Universal Technical Institute have risen 32.1%, and are up 118.72% in the last year. In comparison, the S&P 500 has only moved 1.35% and 13.07%, respectively.Investors should also take note of UTI'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, UTI is averaging 1,092,414 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 UTI.Over the past two months, 4 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost UTI's consensus estimate, increasing from $1.01 to $1.06 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 LineGiven these factors, it shouldn't be surprising that UTI 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 Universal Technical Institute on your short list.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.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 Universal Technical Institute Inc (UTI): 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