Are You Looking for a Top Momentum Pick? Why Norfolk Southern (NSC) is a Great Choice

Below, we take a look at Norfolk Southern (NSC), which currently has a Momentum Style Score of A. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.

It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Norfolk Southern currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?

In order to see if NSC is a promising momentum pick, let's examine some Momentum Style elements to see if this railroad holds up.

A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.

For NSC, shares are up 3.09% over the past week while the Zacks Transportation - Rail industry is up 1.1% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 5.25% compares favorably with the industry's 6.25% performance as well.

Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Shares of Norfolk Southern have increased 5.83% over the past quarter, and have gained 20.34% in the last year. In comparison, the S&P 500 has only moved 2.83% and 16.12%, respectively.

Investors should also take note of NSC's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now NSC is averaging 1,067,230 shares for the last 20 days..

Earnings Outlook

The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock's price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with NSC.

Over the past two months, 6 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost NSC's consensus estimate, increasing from $12.12 to $12.60 in the past 60 days. Looking at the next fiscal year, 4 estimates have moved upwards while there have been no downward revisions in the same time period.

Bottom Line

Taking into account all of these elements, it should come as no surprise that NSC is a #2 (Buy) stock with a Momentum Score of A. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep Norfolk Southern on your short list.

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This article originally published on Zacks Investment Research (zacks.com).

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