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Several stocks are currently trading at sky-high valuations, and a high inflation environment could cause them to decline in price. However, turning to momentum investing could be rewarding now because stocks that have managed to gain momentum over the past few months might be able to maintain it in the near term, irrespective of short-term fluctuations by the broader market. Investors’ increasing interest in momentum stocks is evident in the iShares MSCI USA Momentum Factor ETF’s (MTUM) 2.8% returns over the past month.
ABB Ltd (ABB), Eaton Corporation plc (ETN), and Allied Motion Technologies Inc. (NASDAQ:AMOT) have achieved decent momentum over the past few months, and their fundamental strength should allow them to keep rallying. So, we think it could be wise to scoop up these three stocks now.
