Carpenter Technology, Virtu Financial, and Root are momentum anomaly stocks to buy as markets look beyond tariffs. The US economy is in solid shape, but inflation data scheduled for release this week keeps markets on edge. These stocks have a proven track record of alpha generation and are leaders in their respective industries, with Carpenter Technology up 78.4% in the past year and Virtu Financial up 55.6%. Root has a momentum score of A and has increased 81.1% in the past year.

The broader U.S. equity markets have experienced a rollercoaster ride lately, marked by record highs driven by strong earnings from blue-chip technology companies and sharp declines due to inflation concerns. Despite these fluctuations, the U.S. economy remains robust, with stable labor market conditions and higher nonfarm productivity. However, the upcoming key inflation data release later this week is keeping markets on edge [1].

Amidst this volatility, investors are turning to momentum stocks as a winning strategy to generate sustained profits. Momentum investing follows the principle of “buying high and selling higher,” capitalizing on the idea that once a stock establishes a trend, it is more likely to continue in that direction due to the momentum behind it [2].

Three stocks that have caught the attention of investors are Carpenter Technology Corporation (CRS), Virtu Financial, Inc. (VIRT), and Root, Inc. (ROOT). These companies have demonstrated strong performance and are leaders in their respective industries.

Carpenter Technology, based in Philadelphia, PA, is a producer and distributor of premium specialty alloys, including titanium alloys, powder metals, stainless steels, alloy steels, and tool steels. The company has seen a 78.4% increase in stock price over the past year but experienced a 1.8% decline in the past week [1].

Virtu Financial, headquartered in New York, NY, is a market-leading financial services firm that leverages cutting-edge technology to provide execution services and data, analytics, and connectivity products. The stock has rallied 45.9% over the past year but lost 3.2% in the past week [1].

Root, based in Columbus, OH, provides insurance products and services in the United States, primarily automobile and renters insurance. The company has surged 89.3% in the past year but declined 26.3% in the past week [1].

These stocks have shown a proven track record of alpha generation and are among the top 50 performers in terms of percentage price change over the last 52 weeks. They have also experienced a short-term pullback in price over the past week, indicating a potential buying opportunity. Additionally, all three stocks have a Momentum Style Score of B or better and a Zacks Rank #1, indicating strong buy recommendations [1].

Investors should closely monitor these momentum anomaly stocks as they have the potential to generate handsome gains. However, it is essential to remember that momentum investing is a risky strategy that requires careful implementation and monitoring.

References:
[1] https://finance.yahoo.com/news/3-momentum-anomaly-stocks-buy-151300171.html
[2] https://www.nasdaq.com/articles/3-momentum-anomaly-stocks-buy-markets-look-beyond-tariffs