As an investor, I typically adhere to a buy-and-hold philosophy. However, I occasionally venture into the realm of momentum investing. One crucial element in momentum investing involves selecting ascending stocks favored by major investors. For those subscribed, Investor’s Business Daily offers insights into Relative Strength and other data that reveal individual stock outperformance in the market and which particular large investors are acquiring each entity.

Another factor to consider when identifying strong momentum stocks is their ability to hold steady, even on days when the entire stock market is trending downward. A former colleague of mine once suggested that when a stock rises on a red market day, it bodes very well for that particular stock. Based on my experience, I am in full agreement with this theory. Lastly, even when investing in momentum stocks, I aim to steer clear of names trading at exorbitantly high valuations. This is because stocks with high valuations are more likely to experience a significant drop should negative news arise.

Super Micro Computer (SMCI)

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Undoubtedly, Super Micro Computer (NASDAQ: SMCI), a company specializing in AI hardware, has greatly benefited from the AI Boom and has gathered significant momentum. In fact, its shares surged by 197% in the last three months as of Feb. 13.

The stock boasts a maximum Relative Strength score of 99 and a top-tier Accumulation/Distribution rating of A+ as per Investor’s Business Daily. The Relative Strength metric gauges a stock’s performance relative to the entire market over the past year, while the Accumulation/Distribution figure indicates the degree to which institutions have been acquiring shares of a company over the previous 13 weeks.

Of particular note is that on Feb. 13, when 90% of the names on the New York Stock Exchange were plummeting, the shares of Super Micro Computer were climbing by 1.3%, as reported by CNBC.

Celsius Holdings (CELH)

Source: Shutterstock

Celsius Holdings (NASDAQ: CELH), a company renowned for its production and promotion of relatively healthful energy beverages, is also experiencing substantial momentum. Over the period from Jan. 31 to Feb. 13, its shares registered a 20% advancement.

On Feb. 13 in the late afternoon, despite 90% of NYSE-listed stocks being in descent and a 1.9% downturn of the S&P 500, the shares of Celsius Holdings remained relatively stable.

The stock holds a robust Relative Strength rating of 86 out of 99. Although its Accumulation/Distribution rating is at a slightly lower B-, there is a possibility of increased institutional purchasing of shares in light of the material outperformance observed in recent weeks.

From a fundamental standpoint, on Jan. 23, investment bank Piper Sandler (NYSE: PIPR) highlighted the potential for the firm to continue seizing market share in the U.S. in the short term and internationally in the long term.

The stock currently bears a forward price-earnings ratio higher than average at 52 times. Nonetheless, this multiple is notably less than the 151 times and 99 times at which the stock was trading on June 30, 2023, and December 31, 2022, respectively.

Moreover, the analysts’ consensus points to a substantial rise in the company’s earnings per share, from a per-share loss of 88 cents in 2023 to an estimated 76 cents in the present year. This remarkable growth renders the stock’s P/E ratio quite appealing.

Toyota (TM)

Toyota’s Stock Surges After Strong Fiscal Quarter Results

Toyota’s Impressive Surge

Toyota (NYSE:TM) has experienced a remarkable surge, with a near-18% increase in January compared to the previous month, ending on Feb. 13. At a time when the market sentiment is predominantly bearish on electric vehicles, Toyota’s approach emphasizing hybrid-electric autos appears to have caught the investors’ attention and garnered substantial approval.

Exceptional Fiscal Performance

The surge in stock value followed the automaker’s release of exceptionally strong fiscal third-quarter results on Feb. 6, in which its profits nearly doubled to 1.36 trillion Japanese yen (JPY), equivalent to $9 billion, from 728 billion JPY in Q3 of 2023.

Furthermore, Toyota raised its bottom-line guidance for the full fiscal year to $30 billion from $27 billion, citing reduced costs, effective marketing strategies, and favorable currency fluctuations as the primary factors for the upward revision.

Market Endorsements

On Feb. 13, TM stock displayed another surge, rising by 2.3% on that “red tape” day. Additionally, the stock boasts a very high Relative Strength rating of 93 and an excellent accumulation/distribution grade of A, according to Investor’s Business Daily.

Moreover, with a forward price-earnings ratio of 12 times, the stock appears to be an attractive investment opportunity.

An Expert’s Perspective

Additionally, Larry Ramer, a seasoned stock analyst with a 15-year track record, holds a strong, long position in TM. He believes that Toyota’s remarkable rise in the stock market is a testament to their pioneering strategy and the robust fiscal performance. His opinion emphasizes the exceptional financial trajectory that Toyota is currently treading.

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