Here’s why PNM Resources (PNM) is a high-growth stock

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium offers plenty of ways to do both.

The Research Service offers daily Zacks Ranking and Zacks Industry Ranking updates, full access to the Zacks #1 Ranking List, Stock Research Reports and Premium Stock Screens, all of which will help you become a smarter and more confident investor.

It also includes access to Zacks style sheet music.

What are Zacks style scores?

Developed alongside Zacks Rank, Zacks Style Scores are a group of complementary indicators that help investors choose stocks with the best chance of beating the market over the next 30 days.

Each stock is assigned a letter grade of A, B, C, D or F based on its value, growth and dynamic qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the higher the score, the better the chance the stock will outperform.

Style Scores are divided into four categories:

Value Rating

For value investors, it’s about finding good stocks at good prices and finding out which companies are trading at fair value before the market takes a swing. The Value Style Score uses ratios such as P/E, PEG, Price/Sales, Price/Cash Flow and a host of other multiples to help select the most attractive and discounted stocks.

Growth score

While good value is important, growth-oriented investors focus more on a company’s financial strength and health, as well as its future prospects. The Growth Style Score considers forecasted and historical earnings, sales and cash flow to uncover stocks that will experience sustainable long-term growth.

Momentum Score

Aggressive investors, who live by the saying “the trend is your friend”, are more interested in taking advantage of rising or falling trends in a stock’s price or earnings prospects. Using the week-to-week price change and monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM score

If you enjoy using all three types of investing, the VGM score is for you. It’s a combination of all Style Scores, and it’s an important indicator to use with Zacks Rank. The VGM score rates each stock based on its shared weighted styles, narrowing down the companies with the most attractive value, the best growth forecasts and the most promising momentum.

How Style Scores Work with Zacks Ranking

The Zacks Ranking is a proprietary stock rating model that harnesses the power of earnings estimate revisions or changes to a company’s earnings forecast to help investors build a successful portfolio.

It’s been a big hit, with #1 stocks (Strong Buy) producing the highest average annual return of +25.41% since 1988. That’s more than double the S&P 500. But due to the large number of stocks that we assess, there are over 200 companies with a strong Buy Rank, plus another 600 with a #2 (Buy) Rank, on any given day.

That totals over 800 top-rated stocks, and trying to pick the best stocks for you and your portfolio can be overwhelming.

This is where Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means choosing stocks with a Zacks rank #1 or #2 that also have style scores of A or B. If you find yourself looking at stocks with a #3 (hold) rank, make sure that They also have A or B scores to ensure as much upside potential as possible.

Because the scores were created to work with the Zacks Ranking, the direction of revisions to a stock’s earnings estimates should be a key factor when deciding which stocks to buy.

Here’s an example: a stock with a rating of #4 (sell) or #5 (strong sell), even one with style scores of A and B, still has a downward earnings outlook, and a higher chance that its share price will also decline.

So the more stocks you have with a rank of #1 or #2 and scores of A or B, the better.

Stock to watch: PNM resources (PNM)

PNM Resources, based in Albuquerque, New Mexico, was founded in 1917. The company, through its subsidiaries, is engaged in the distribution of energy and energy-related businesses in the United States. United. It operates through two segments – Public Service Company of New Mexico (PNM) and Texas-New Mexico Power Company (TNMP).

PNM is a #3 (Hold) on the Zacks rank, with a VGM score of B.

Additionally, the company could be a top pick for growth investors. PNM has a growth style score of B, forecasting year-over-year earnings growth of 6.1% for the current fiscal year.

An analyst has revised up its earnings estimate over the past 60 days for fiscal 2022. Zacks’ consensus estimate rose $0.05 to $2.60 per share. PNM has an average earnings surprise of 25.6%.

With a strong Zacks ranking and top VGM growth and style scores, PNM should be on the investor shortlist.

5 shares ready to double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations climbed +143.0%, +175.9%, +498 .3% and +673.0%.

Most of the stocks in this report fly under the radar on Wall Street, which provides a great opportunity to get in on the ground floor.

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PNM Resources, Inc. (PNM): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.