3 Momentum Stocks To Buy As The Market Makes New Highs

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The resurgence of COVID-19 cases in several parts of the world due to the rapid spread of the highly transmissible Delta variant has been contributing to severe stock market volatility. While the stock market remained steady despite 6.5% U.S. GDP growth for the second quarter coming in weaker than the forecast of 8.4% growth, the chances of a market correction in the near-term cannot be ruled out.

Amid these conditions, turning to momentum investing could be rewarding because stocks that have managed to gain momentum over the past few months might be able to maintain the same market action in the near- to mid-term irrespective of the movement of the broader market.

Eaton Corporation plc (ETN), Mitsubishi Chemical Holdings Corporation (MTLHY), and Vertiv Holdings Co (VRT) have been maintaining solid momentum over the past few months and should continue rallying in the coming months, dodging the market volatility. In addition, each of these names has an A grade for Momentum, along with an overall Strong Buy or Buy rating, in our POWR Ratings system. So, we think it could be wise to scoop up these stocks.

Eaton Corporation plc (ETN)

Based in Dublin, Ireland, ETN is a power management company. With a presence in more than 175 countries, the company’s operating segments include an Electrical Americas and Electrical Global segment, a Hydraulics segment, and an eMobility segment.

ETN announced the global launch of the 9PX lithium-ion uninterruptible power supply on July 15, 2021. Sami Hussaini, the company’s product manager, UPS 9 series, said, “The need for reliable backup power has never been more critical. Our 9PX lithium-ion UPS continues our commitment to building lithium-ion capabilities into UPS solutions, enabling greater business continuity and always-on power in environments with limited on-site IT support.”

ETN’s total assets surged 7.1% year-over-year to $34.08 billion in its fiscal first quarter, ended March 31, 2021. Its global electrical segment sales grew 9.5% year-over-year to $1.25 billion, and its adjusted earnings came in at $577 million, representing a 12.2% year-over-year increase. The company’s adjusted EPS was $1.44, up 15.2% year-over-year.

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