The Twin Momentum strategy harnesses the synergistic power of price momentum and strengthening fundamentals to achieve superior market returns. This innovative approach combines traditional price movement analysis with a comprehensive evaluation of improving company fundamentals, creating a robust framework for identifying high-potential stocks. By focusing exclusively on companies that rank in the top quintile for both price momentum and fundamental momentum, this methodology aims to capture only the most promising investment opportunities.
The fundamental component of Twin Momentum employs a sophisticated amalgamation of seven key financial metrics to create a unified measure of fundamental strength. These metrics include earnings growth, return on equity (ROE), return on assets (ROA), accrual operating profitability to equity, cash operating profitability to assets, gross profit to assets, and net payout ratio. Developed by financial researcher Dashan Huang and detailed in his paper “Twin Momentum,” this strategy represents a significant advancement in quantitative investing techniques. By requiring stocks to demonstrate excellence in both technical and fundamental dimensions simultaneously, Twin Momentum creates a stringent filter that potentially reduces risk while enhancing returns, addressing common criticisms of single-factor momentum approaches.
Here are the top twin momentum stocks for February of 2025.
| Ticker | Company Name | Price | Market Cap ($mil) | PE Ratio | Price/ Sales | Relative Strength | Price/ Book | Price/ Cash Flow | Dividend Yield | Long-Term EPS Growth |
|---|---|---|---|---|---|---|---|---|---|---|
| POWL | POWELL INDUSTRIES INC | $169.59 | $2,046 | 12.9 | 1.9 | 61 | 4.1 | 12.2 | 0.6% | 225.4% |
| CALM | CAL-MAINE FOODS INC | $89.34 | $4,381 | 7.0 | 1.4 | 87 | 2.1 | 6.1 | 3.3% | 240.9% |
| COKE | COCA-COLA CONSOLIDATED INC | $1,390.94 | $12,126 | 22.2 | 1.8 | 89 | 8.6 | 14.7 | 0.3% | 217.3% |
| PODD | INSULET CORP | $283.48 | $19,908 | 49.0 | 9.6 | 87 | 16.4 | 39.9 | 0.0% | 141.3% |
| BKNG | BOOKING HOLDINGS INC | $5,049.08 | $165,687 | 29.2 | 7.0 | 84 | 3.3 | 25.6 | 0.7% | 117.0% |
| HWM | HOWMET AEROSPACE INC | $129.56 | $52,475 | 46.1 | 7.1 | 11.7 | 36.7 | 0.2% | 63.6% | |
| IDCC | INTERDIGITAL INC | $209.69 | $5,386 | 17.4 | 6.2 | 92 | 6.3 | 12.6 | 0.8% | 71.2% |
| PPC | PILGRIMS PRIDE CORP | $54.00 | $12,805 | 11.8 | 0.7 | 92 | 3.0 | 8.4 | 0.0% | 111.4% |
| PLMR | PALOMAR HOLDINGS INC | $124.60 | $3,306 | 27.8 | 6.1 | 89 | 4.5 | 3.2 | 0.0% | 74.5% |
| LAUR | LAUREATE EDUCATION INC | $19.28 | $2,907 | 10.0 | 1.9 | 85 | 3.0 | 8.0 | 0.0% |
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