Strong Buy Alerts: AppLovin & 2 More Momentum Stocks for Big Gains

Zacks Investment Research has identified AppLovin (APP), Build-A-Bear Workshop (BBW), and Tenet Healthcare (THC) as top momentum stock picks, utilizing the Driehaus investment strategy. This strategy focuses on companies exhibiting strong earnings growth, a history of significant earnings surprises (e.g., APP 22.4%, BBW 21.3%, THC 31.2% average surprise), positive price momentum (trading above their 50-day moving average), and high relative strength, further filtered by a Zacks Rank #1 and Momentum Score of A or B. These selections represent potential outperformers for investors seeking growth in a market context that could be buoyed by broader economic factors like Federal Reserve rate cuts.

Analysis

The research note identifies AppLovin (APP), Build-A-Bear Workshop (BBW), and Tenet Healthcare (THC) as current momentum stock picks based on the Driehaus investment strategy. This methodology screens for companies with strong EPS growth, a history of significant positive earnings surprises, and positive price momentum, specifically trading above their 50-day moving average. The selections are further refined by a Zacks Rank #1 ('Strong Buy') and a Momentum Score of 'B'. The note provides specific evidence for this, citing Tenet Healthcare’s 31.2% average four-quarter earnings surprise, AppLovin’s 22.4%, and Build-A-Bear’s 21.3%. The strategy is presented as a judicious way to select potential outperformers in a market that could see upward movement from macro factors like a potential Federal Reserve rate cut, but where individual stock performance is not guaranteed.

Key Decisions for Investors

• Investors employing momentum-based strategies should consider these pre-screened candidates—AppLovin, Build-A-Bear, and Tenet Healthcare—given their combination of strong earnings beats and positive technical signals.
• It is critical to monitor the 50-day moving average and relative strength for these names, as the investment thesis presented is heavily dependent on the continuation of their price momentum.
• Before allocating capital, perform fundamental due diligence to validate the underlying business reasons for the sustained EPS growth, as the quantitative screen is a starting point, not a complete analysis.