Here's Why City Holding (CHCO) is a Great Momentum Stock to Buy

Below, we take a look at City Holding (CHCO), a company that currently holds a Momentum Style Score of A. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.

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. City Holding 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?

Let's discuss some of the components of the Momentum Style Score for CHCO that show why this bank holding company for City National Bank of West Virginia shows promise as a solid momentum pick.

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 CHCO, shares are up 2.84% over the past week while the Zacks Banks - Southeast industry is up 0.42% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 7.36% compares favorably with the industry's 2.2% performance as well.

While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Over the past quarter, shares of City Holding have risen 18.09%, and are up 17.27% 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 CHCO'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 CHCO is averaging 142,344 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 CHCO.

Over the past two months, 2 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost CHCO's consensus estimate, increasing from $9.00 to $9.29 in the past 60 days. Looking at the next fiscal year, 2 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 CHCO 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 City Holding on your short list.

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

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