The major stock indexes’ performances have remained upbeat over the past three weeks thanks to impressive third-quarter corporate earnings. However, the S&P 500 and the Dow Jones Industrial Average slipped from their record highs yesterday. Despite overall positive market sentiment, investors’ concerns about an increase in the Consumer Price Index in September, continuing supply chain disruptions, and the possibility of the Fed tightening its monetary policy in the near term could foster significant market volatility in the near term.

Furthermore,  stagflation in China is fueling pessimism among investors regarding the global economic recovery. Given this backdrop, we think investors could benefit by investing in stocks that have momentum that they can maintain irrespective of the market’s volatility. Investor optimism surrounding the momentum stocks is evident in the Invesco S&P MidCap Momentum ETF’s (XMMO) 6.8% returns over the past three months.

Signet Jewelers Limited (SIG), Matson, Inc. (MATX), Tilly’s, Inc. (TLYS), and TransGlobe Energy Corporation (TGA) are  stocks that have been generating robust momentum over the past few months that they are expected to maintain amid a volatile market. Also each of these stocks has an overall Strong Buy rating in our proprietary POWR Ratings system. Therefore, we think it could be wise to grab these stocks now.

Signet Jewelers Limited (SIG)

Based in Hamilton, Bermuda, SIG is a retailer of diamond jewelry and other diamond products. The company operates through three segments–North America; International; and Other. It runs approximately 2,800 stores primarily under the Kay Jewelers, Zales, Jared, H.Samuel, Ernest Jones, Peoples, Piercing Pagoda, Rocksbox, and JamesAllen.com banners.

This month, SIG agreed to acquire Diamonds Direct USA Inc, an off-mall, destination jeweler in the U.S. Diamonds Direct’s distinct bridal-focused shopping experience should add a new market entry point to SIG. Also, the acquisition should help SIG to reach its $9 billion revenue goal over time and drive its shareholder value.

SIG’s sales for its fiscal second quarter, ended July 31, 2021, increased 101.4% year-over-year to $1.79 billion. The company’s operating income came in at $223 million, compared to a $41.7 million operating loss  in the prior-year quarter. Its EPS amounted to $3.57, compared to a $1.13 loss per share in its fiscal second quarter of 2020. Also, the company’s gross margin increased 220.2% year-over-year to $717.6 million.

SIG’s $7.14 billion consensus revenue estimate for its fiscal period ending 2022 represents a 36.6% increase year-over-year. The company has surpassed the consensus EPS in each of the trailing four quarters. In addition, its EPS is expected to increase 381.9% in the current year. Furthermore, the stock has gained 148.1% in price over the past nine months to close its last trading session at $86.73. Over the past year, the stock has returned 239.9%. SIG is currently trading above its $80.97 and $64.99 respective 50-day and 200-day moving averages.

SIG’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.

Also, the stock has an A grade for Growth, Momentum, and Quality. We’ve also graded SIG for Stability, Sentiment, and Value. Click here to access all of SIG’s ratings. SIG is ranked #2 of 63 stocks in the A-rated Fashion & Luxury industry.

Matson, Inc. (MATX)

MATX, in Honolulu, Hawaii, provides ocean transportation and logistics services. The company offers domestic and international rail intermodal service, long haul and regional highway brokerage, supply chain services, and less-than-truck-load (LTL) transportation services. In addition, it has third-party logistics services that include distribution, less-than-container-load (LCL) consolidation, and international freight forwarding.

During the second quarter, ended June 30, 2021, MATX’s total operating revenue increased 66.9% to $874.9 million. The company’s operating income grew 317.8% from its year-ago value to $213.9 million. Its net income rose 395.4% from its year-ago value to $162.5 million. Also, the company’s EPS increased 388.2% year-over-year to $3.71.

MATX’s revenue is expected to increase 46.4% year-over-year to $3.49 billion in its fiscal year 2021. In addition, the company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Moreover, its EPS is expected to increase by 242.8% in the current year. Over the past nine months, the stock has soared 28.8% in price to close yesterday’s trading session at $82.71. Also, the stock has returned 65% over the past year and is currently trading above its $81.61 and $70.84 respective 50-day and 200-day moving averages.

MATX’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. Also, the stock has a B grade for Quality, Momentum, and Value.

In addition to the POWR Rating grades I’ve just highlighted, one can see MATX’s ratings for Stability, Sentiment, and Growth here. MATX is ranked #2 of 47 stocks in the Shipping industry.

Tilly’s, Inc. (TLYS)

TLYS is a specialty retailer of casual apparel, footwear, backpacks, and accessories for women, men, and kids. Its brands offer apparel and accessories, including hydration bottles, hats, sunglasses, small electronics handbags, watches, jewelry, etc. The Irvine, Calif.-based company operates in 238 stores in 33 states and provides online shopping, with the same products offered in stores, supplemented by additional online-only styles.

TLYS’ net sales increased 48.7% year-over-year to $201.95 million for its fiscal second quarter, ended July 31, 2021. The company’s gross profit grew 79.3% from its year-ago value to $74.73 million. Its operating income rose 242.8% from the prior-year quarter to $26.43 million. Also, the company’s net income increased 287.4% year-over-year to $20.4 million.

For its fiscal year 2022, analysts expect TLYS’ revenue to increase 41.7% year-over-year to $753.11 million. It has surpassed the consensus EPS estimates in three of the trailing four quarters. The company’s EPS is estimated to increase significantly in the current year. The stock has gained 41.5% in price over the past nine months to close yesterday’s trading session at $13.38. In addition, TLYS is currently trading above its $14.64 and $12.93 respective 50-day and 200-day moving averages.

It’s no surprise that TLYS has an overall A rating, which equates to a Strong Buy in our POWR Rating system. Also, the stock has an A grade for Momentum and Sentiment.

Click here to see the additional POWR Ratings for TLYS (Quality, Stability, Value, and Growth). TLYS is ranked #4 in the Fashion & Luxury industry.

TransGlobe Energy Corporation (TGA)

Headquartered in Calgary, Canada, TGA is an international oil and gas company that explores for, develops, and produces crude oil and natural gas in Egypt and Canada. The company holds interests in four production sharing concessions, including West Gharib, West Bakr, NW Gharib, and South Ghazalat, Egypt. TGA also owns production and working interests in facilities in Cardium light oil and Mannville liquid-rich gas assets.

For the second quarter, ended June 30, 2021, TGA’s revenue increased 334.7% year-over-year to $50.63 million. The company’s net earnings came in at $7.72 million, versus a $13.37 million net loss in the prior-year quarter. Its comprehensive income amounted to $8.49 million, compared to a $11.12 million comprehensive loss in the year-ago quarter. Also, the company’s EPS was $0.11, compared to a $0.19 loss per share in the second quarter of 2020.

Analysts expect TGA’s EPS to increase 363.2% next year. A $145.8 million consensus revenue for the fiscal period ending December 31, 2021, represents a 27.1% increase year-over-year. Furthermore, the stock has gained 159.2% in price over the past nine months to close its last trading session at $2.67. Over the past year, the stock has gained 567.3% in price and is currently trading above its $2.19 and $1.75 respective 50-day and 200-day moving averages.

TGA’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to a Strong Buy in our POWR Rating system. Also, the stock has an A grade for Quality, Sentiment, and Momentum.

We’ve also graded TGA for Stability, Growth, and Value. Click here to access all TGA’s ratings. In the A-rated Foreign Oil & Gas industry, it is ranked #3 of 49 stocks.

SIG shares were trading at $87.08 per share on Thursday morning, up $0.35 (+0.40%). Year-to-date, SIG has gained 220.21%, versus a 23.49% rise in the benchmark S&P 500 index during the same period.

About the Author: Priyanka Mandal

Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research. More...

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