Valsea’s best performing model, Twin momentumrecently added NVIDIA (NVDA) To the list of companies – and for a good reason. The strategy is looking for shares that combine Strong basic principles of Strong price momentumA link for which academic research has shown can make the chance of outperformance meaningfully improve.
This is how Nvidia has passed on every step of the process – and why other Vallea models also strongly assess the stock.
The research behind twin momentum
The twin momentum approach is based on the paper “Twin Momentum” Through Dashan HuangAssistant professor of Finance at the Lee Kong Chian School of Business at Singapore Management University.
Huang’s research looked at combining Traditional price momentum of Improvement of basic principles To generate the outperformance of the market. He identified seven important fundamental variables:
- Gain
- Return on Equity (roe)
- Return on assets (ROA)
- Build -up profitability for equity
- Cash of monetary profitability for assets
- Crazy profit for assets
- Net payment ratio
The researcher discovered that when the fundamental momentum was combined with the price momentum – measured in the past year while the most recent month was excluded – the performance was considerably improved versus the fundamental or price momentum isolated.
Vallea used the investment framework that is described in Huang’s Paper to make our Twin Momentum Investor model. Here are the three steps that the strategy follows to identify shares with the strongest combination of improving the basic principles and the ongoing price momentum – together with how Nvidia scores in every phase.
Step 1: Fundamental Momentum – Pass
We start with screening on companies in the top 20% of our universe based on fundamental momentum.
Nvidia’s score of 33.34% it places it in the 1st percentile From our database (lower is better), pass this first obstacle easily. This score reflects profit in profitability and return on capital over time – a characteristic of a company whose foundations strengthens.
Step 2: Twelve min one momentum – Pass
Price momentum is measured as a year of performance with the exception of the last month-one approach that records trends in the medium term without the noise of short-term interruptions.
Nvidia’s 12-minus return or return or 44.56% it arranges in the 17th percentile In our database, the deletion of the second obstacle.
Step 3: Combined rank – Pass
Only the top 5% of the shares on the combined fundamental and price -moment number pass this last screen. Nvidia is in the 1st percentileAchieving the strongest Twin Momentum candidates on the market today.
Secular Tailwinds who drives the growth of Nvidia
Nvidia nowadays runs some of the most powerful growth trends on the market. The GPUs of the company have become the standard for artificial intelligence, and everything from generative AI models to advanced data analyzes. This has fueled the record question of cloud providers, companies and research institutions, stimulating rapid growth in his data center activities.
At the same time, Nvidia benefits from the wider AI investment group, expansion of powerful computing and new applications in industries such as automotive, health care and robotics. This secular steel wind, combined with its dominant technology and software ecosystem, has positioned the company in the center of one of the most important technological shifts in decades.
Other Vallea models also like it
While Twin Momentum is receiving attention today, Nvidia’s financial strength is laid down in several strategies Is Valida:
| Model | Strategy | Based on | Score | Description |
|---|---|---|---|---|
| Twin Momentum Investor | Twin momentum | Dashan Huang | 100% | Combines fundamental and price momentum to identify Elite shares. |
| Momentum investor | Momentum | Validation | 89% | Search for a strong price momentum with EPS growth, high roe and falling debts. |
| Growth/value investor | What works on Wall Street | James O’Shaughnessy | 80% | Combines large CAP value and growth methods, in which profit growth and a strong relative strength are emphasized. |
Nvidia by the songS
- Last closing: $ 182.02
- Market capitalization: $ 4.44 trillion
- Sector: Technology
- 52-week range: $ 86.62 – $ 184.48
- Relative power: 83
- VR ratio: 58.6
- Profit margin: 51.7%
- Roe: 115.5%
- Long: 75.9%
- LT EPS -Growth: 109.2%
- Debt/equity: 0.10
Click here to view the full factor report on Nvidia
NVIDIA is a company that fundamentally shoots all cylinders and still delivers an exceptional market momentum. That is the type of Stock Twin Momentum – and various other Validea models – is built to find.
Further research
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