Alpha Strategies Bet on a Massive Tech Momentum Play

This week’s Alpha Algorithm identified an emerging tech giant that has been heralded as the global leader in the world of virtual reality.

Founded in 1993 and headquartered in Santa Clara, California, NVIDIA Corporation (NVDA) is a visual computing company. It offers processors for PC gaming, design professionals working in computer-aided design, video editing, special effects, deep learning, accelerated computing and general purpose computing. NVIDIA sells its products primarily to original equipment manufacturers, original design manufacturers, system builders, motherboard manufacturers, add-in board manufacturers and retailers/distributors.

NVIDIA vs. the S&P 500 year to date.

Eight Top Investment Strategies Betting on NVIDIA (NVDA)

1. Large-Cap Growth

The stock is among the top 50 large-capitalization U.S. growth stocks generated through a rigorous 10-factor fundamental screening process.

2. Large-Cap Alpha Growth

NVIDIA has been chosen as part of an alpha-seeking index that selects and weights growth stocks from the S&P 500 Growth Index. The proprietary methodology uses price appreciation — among more traditional factors — and weights the constituents based on their respective growth scores.

3. Fundamental Strength

NVIDIA is a top U.S. stock based on fundamentals measured by book value, cash flow, sales and dividends.

4. Momentum Factor

The stock also is one of the top 120 large- and mid-cap U.S. stocks exhibiting relatively higher price momentum, as measured by a specific factor which has historically driven a significant part of companies’ risk and return.

5. Momentum Model

The stock is among the top approximately 100 U.S.-listed companies to demonstrate powerful strength characteristics relative to the 3,000 largest U.S.-listed companies.

6. Exponential Technologies

The stock is part of a strategy that invests in nine different fields deemed to be vast growth “exponential technologies”: big data and analytics, nanotechnology, medicine, networks, energy and environmental systems, robotics, 3-D printing, bioinformatics and financial services.

7. Broker’s Best

One of Raymond James’ selection of stocks expected to outperform the S&P 500 over either a six- or 12-month period.

8. IBD Top Fifty

NVIDIA is a Top 50 stock based on Investor’s Business Daily’s proprietary trading formula to identify 50 stocks that meet one of seven different catalysts. The “CAN SLIM” strategy identifies companies with either fundamental (improving earnings or new product) or technical (upward stock move on strong volume) catalysts.

Recommendation

Buy NVIDIA Corp (NVDA) at market today.

Place your initial stop at a wide $70.00.

I am holding off on recommending any related options until the recent volatility settles.

Portfolio Update

Raise your stop in Northrop Grumman (NOC) to $233.20 to lock in at least a 10% gain in this position.

Sincerely,

Nicholas A. Vardy