Dashing Winners
Momentum investors are disciplined trend-followers who jump on stocks that have fared well over the past several months with the hope they’ll continue to climb for another month or two. It’s a simple strategy that has a record of profitability in most of the world’s markets going back decades.
While gainers tend to continue to run higher in the short term, the reverse also tends to be true with lagging stocks, which continue to fall before – hopefully – finding a bottom.
| | |
| | Aecon Group | ARE-T | 33.5 | 61.5 | 138.4 | | 1.73 | -6.5 |
| | AtkinsRalis | ATRL-T | 49.2 | 36.5 | 86.1 | 37.87 | 3.84 | 10.2 |
| | Aura Minerals | ORA-T | 38.1 | 62.2 | 101.9 | | 4.17 | -18.6 |
| | Brookfield | BN-T | 30.5 | 50.9 | 73.7 | 56.97 | 2.14 | 1.8 |
| | Capital Power | CPX-T | 31.4 | 51.3 | 73.0 | 26.44 | 2.10 | 14.9 |
| | Celestica | CLS-T | 107.2 | 73.9 | 238.8 | 27.53 | 5.75 | 21.2 |
| | CES Energy Solutions | CEU-T | 34.5 | 38.3 | 189.4 | 11.54 | 2.96 | 28.4 |
| | CIBC | CM-T | 16.1 | 47.9 | 72.4 | 12.96 | 1.67 | 13.5 |
| | D2L Inc | DTOL-T | 39.4 | 74.0 | 80.3 | 102.09 | 11.10 | 10.8 |
| | Definity Financial | DFY-T | 16.7 | 37.7 | 61.2 | 31.72 | 2.18 | 18.9 |
| | Descartes Systems | DSG-T | 29.1 | 33.7 | 49.3 | 70.16 | 7.56 | 10.8 |
| | Enerflex | EFX-T | 84.9 | 98.6 | 135.7 | | 1.13 | -7.0 |
| | Fiera Capital | FSZ-T | 29.1 | 46.1 | 107.8 | 14.39 | 3.49 | 21.4 |
| | Galaxy Digital | GLXY-T | 91.9 | 69.4 | 205.6 | 14.22 | 2.53 | 28.5 |
| | Hut 8 Mining Corp | HUT-T | 164.1 | 176.7 | 216.5 | | 4.79 | |
| | iA Financial | IAG-T | 30.9 | 58.5 | 53.0 | 14.03 | 1.90 | 15.2 |
| | IGM Financial | IGM-T | 26.6 | 32.0 | 48.5 | 10.08 | 1.51 | 15.9 |
| | Manulife Financial | MFC-T | 20.0 | 28.3 | 66.6 | 15.76 | 1.83 | 12.2 |
| | MDA | MDA-T | 88.0 | 129.8 | 147.7 | 53.98 | 3.04 | 6.2 |
| | Perpetua Resources | PPTA-T | 56.4 | 94.7 | 359.1 | | 10.61 | -18.7 |
| | AtkinsRalis | ATRL-T | 49.2 | 36.5 | 86.1 | 37.87 | 3.84 | 10.2 |
| | TC Energy | TRP-T | 19.9 | 42.6 | 50.8 | 14.56 | 2.49 | 17.2 |
| | TerraVest Industries | TVK-T | 29.2 | 68.5 | 247.3 | 37.99 | 6.87 | 23.2 |
| | TransAlta | TA-T | 53.4 | 90.6 | 82.8 | 34.46 | 6.40 | 17.3 |
| | Well Health Technologies | WELL-T | 53.1 | 59.7 | 75.6 | | 1.97 | 9.3 |
We take a blended approach to momentum by measuring it over three different time periods. Stocks that have outperformed their peers over the past three, six and 12 months are awarded more momentum stars.
The fourth momentum factor is a risk reduction measure. We reward stocks with low-to-moderate volatilities and avoid highly volatile stocks that often behave like lottery tickets.
The four momentum measures are combined to award stars to each stock. The top 10 per cent of candidates get a full five out of five stars and a spot in the five-star momentum portfolio.
In backtests, the five-star momentum portfolio gained an average of 16.3 per cent annually over the 25 years to the end of November, 2024, if an equal-dollar amount was put into each stock and the portfolio rebalanced monthly. It gained an average of 16.1 per cent annually when rebalanced yearly.
In comparison, the market index gained an average of 7.8 per cent a year over the same period.