When we examine what truly drives long-term investment success, the progression of a company’s operational excellence over time—its fundamental momentum—deserves special attention. This concept looks beyond simple stock price changes to track meaningful business improvements through essential metrics like operating margins and return on equity.
The groundbreaking Twin Momentum research conducted by Dashan Huang and colleagues demonstrated that businesses showing consistent improvement in their fundamental metrics tend to deliver superior returns compared to those merely experiencing price appreciation.
Why does this matter? Because fundamental momentum helps investors identify companies making substantive operational progress rather than those experiencing fleeting market enthusiasm. When a business consistently enhances its core performance indicators, it often signals effective leadership, expanding competitive moats, or successful strategic pivots.
Perhaps most valuable is Huang’s discovery that integrating both fundamental and price momentum creates a more robust investment approach than either method independently. This dual strategy enables investors to target companies exhibiting strong market performance underpinned by genuine business improvements, minimizing exposure to enterprises temporarily buoyed by market sentiment without meaningful operational advancement.
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Here are the top 10 fundamentally sound high fundamental momentum stocks using our guru models as of April 2025.
| Ticker | Company Name | Price | Market Cap ($mil) | PE Ratio | Price/ Sales | Relative Strength | Price/ Book | Price/ Cash Flow | Dividend Yield | Fundamental Momentum Percentile |
|---|---|---|---|---|---|---|---|---|---|---|
| POWL | POWELL INDUSTRIES INC | $167.24 | $2,018 | 12.7 | 1.9 | 85 | 4.1 | 12.1 | 0.6% | 1 |
| URBN | URBAN OUTFITTERS INC | $49.48 | $4,585 | 11.6 | 0.8 | 84 | 1.9 | 8.9 | 0.0% | 1 |
| CALM | CAL-MAINE FOODS INC | $91.49 | $4,487 | 4.5 | 1.2 | 89 | 1.9 | 4.2 | 4.7% | 1 |
| HRB | H & R BLOCK INC | $63.04 | $8,438 | 17.2 | 2.3 | 85 | 5.9 | 12.9 | 2.1% | 1 |
| HOG | HARLEY-DAVIDSON INC | $22.51 | $2,785 | 6.8 | 0.5 | 31 | 0.9 | 4.6 | 3.1% | 1 |
| AMPH | AMPHASTAR PHARMACEUTICALS INC | $23.35 | $1,109 | 7.6 | 1.5 | 30 | 1.5 | 5.1 | 0.0% | 1 |
| COKE | COCA-COLA CONSOLIDATED INC | $1,416.00 | $12,344 | 22.6 | 1.8 | 92 | 8.7 | 14.9 | 0.3% | 1 |
| NXPI | NXP SEMICONDUCTORS NV | $170.74 | $43,303 | 17.6 | 3.4 | 41 | 4.7 | 12.5 | 2.4% | 1 |
| PODD | INSULET CORP | $246.80 | $17,332 | 42.6 | 8.4 | 88 | 14.3 | 34.7 | 0.0% | 1 |
| BKNG | BOOKING HOLDINGS INC | $4,573.31 | $150,074 | 26.4 | 6.3 | 84 | 3.3 | 23.2 | 0.8% | 1 |
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