United Airlines (UAL) Has Increased by 3.56% in a Week: Key Insights for Investors

When it comes to investing in stocks, momentum investing revolves around the concept of tracking the recent performance of a stock, whether that performance is rising or falling. In a 'long' investment strategy, individuals aim to "buy high," hoping to "sell even higher" later on. For those who adopt this approach, it is crucial to capitalize on the ongoing trends in a stock's price. Once a stock follows a certain trajectory, it is inclined to continue in that direction, leading to potentially profitable trades.

Identifying momentum in stocks can be quite challenging due to varying opinions on the best metrics to watch. The Zacks Momentum Style Score is a helpful tool that aids in taking these factors into account.

In this article, we will review United Airlines (UAL - Free Report), which currently boasts a Momentum Style Score of A. We will also touch upon key factors contributing to this score, such as price changes and earnings estimate revisions.

Moreover, it is important to highlight that Style Scores complement the Zacks Rank, a well-regarded stock rating system known for its strong performance. United Airlines holds a Zacks Rank of #1 (Strong Buy). Historical data shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) with Style Scores of A or B tend to outperform the market over the following month.

Can UAL Outperform the Market?

Let's discuss the factors influencing UAL's Momentum Style Score and why it stands out as a promising momentum investment.

A fundamental aspect of momentum investing is observing a stock's short-term price activity, which reflects current market interest and indicates whether buyers or sellers have the advantage. Furthermore, comparing a stock to its industry is beneficial for identifying leading companies in that sector.

For United Airlines, its shares have risen by 3.56% over the past week, while the Zacks Transportation - Airline industry's performance increased by only 1.04% within the same time frame. Over a longer period, the monthly price increase for UAL stands at 5.28%, which is notably better than the industry’s 2.17% performance.

It’s important to recognize that while stocks may experience temporary price spikes, only a true standout can sustain long-term market outperformance. United Airlines shares have surged 82.49% over the past quarter and a staggering 120.17% in the last year. For context, the S&P 500 saw gains of just 8.43% and 31.8% during the same periods.

Another aspect to monitor is UAL's average trading volume over the past 20 days. This volume provides insight into market behavior; typically, a rising stock coupled with above-average volume signifies bullish sentiment, while a decline under similar conditions suggests bearish trends. Currently, UAL averages a trading volume of 4,659,203 shares over the last 20 days.

Earnings Projections

The Zacks Momentum Style Score also looks at estimation revisions alongside price trends, as these revisions are fundamental to the Zacks Rank. Positive estimate revisions often indicate good stock prospects, and we have seen favorable movement for UAL recently.

In the last two months, eight earnings estimates for UAL have been revised upwards while none have been downgraded. This momentum has contributed to an increase in the consensus estimate from $9.88 to $10.27 over the past 60 days. When considering the next fiscal year, six estimates have moved up, with no reductions noted in the same timeframe.

Conclusion

With all these factors in play, it is evident why UAL holds a #1 (Strong Buy) rating and a Momentum Score of A. If you are scouting for a potential investment that is set for notable gains in the near future, United Airlines should definitely be on your radar.

Investing, Momentum, Airlines