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For Immediate Release

Chicago, IL – March 14, 2025 – Stocks in this week’s article are Masimo Corp. MASI, Robinhood Markets, Inc. HOOD and Discover Financial Services DFS.

Buy 3 Momentum Anomaly Stocks as Tariffs Take Their Toll on Markets

The broader U.S. equity markets witnessed intense volatility over the past few trading days as President Trump's tariff war took its toll. Although Trump had earlier indicated that tariffs on foreign countries would not be imposed immediately, the sudden change in the trade policies toward two of its closest allies rattled investor confidence and hurt the markets.

As Washington imposed a 25% levy on steel and aluminum imports from Canada and Mexico, Canada retaliated with a proposed 25% import duty on more than $20 billion worth of U.S. goods. The European Union followed suit and announced counter-tariffs on 26 billion euros ($28.33 billion) worth of U.S. imports beginning in April.

However, a better-than-expected CPI (consumer price index) reading for February, indicating that inflation rose 0.2% from the prior month and 2.8% on an annual basis, eased recession concerns. Amid the vagaries of the market and related uncertainty, investors often seek to employ time-tested winning strategies to fetch sustained profits. One of the most successful game plans to beat the blues is to bet on momentum stocks, like Masimo Corp., Robinhood Markets, Inc. and Discover Financial Services when value or growth investing fails to generate the desired profits.

This approach primarily tends to follow the adage, "the trend is your friend." At its core, momentum investing is "buying high and selling higher." It is based on the idea that once a stock establishes a trend, it is more likely to continue in that direction because of the momentum that is already behind it. Momentum investing is a way to profit from the general human tendency to extrapolate current trends into the future. It is based on that gap in time before the mean reversion occurs, i.e., before prices become rational again.

Momentum strategies have been known to be alpha-generative over a long period and across market stages. So, this strategy is quite tricky to implement, as detecting these trends is no child's play. Here, we have created a strategy to help investors get in on these fast movers and rake in handsome gains. Our screen will help you benefit from both long-term price momentum and a short-term pullback in price.

Here are three stocks out of the seven that made it through this screen:

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