Momentum Investing in High-Performance Industrial Stocks: How Zacks Style Scores Identify Strong Candidates Like ITT Inc.

Momentum investing has long been a favored strategy for capitalizing on stocks that exhibit strong upward trends, leveraging the idea that price movements tend to persist. In the industrial sector, where cyclical demand and macroeconomic shifts play pivotal roles, identifying momentum-driven opportunities requires a nuanced approach. The Zacks Style Scores, particularly the Momentum Style Score, offer a systematic framework for pinpointing such candidates. This analysis explores how Zacks' methodology identifies high-performance industrial stocks, with a focus on ITT Inc. (ITT) as a compelling near-term growth opportunity.

Zacks Momentum Style Score: A Framework for Momentum Investing

The Zacks Momentum Style Score evaluates stocks based on price and earnings momentum, prioritizing those with strong upward trends and favorable earnings estimate revisions. A score of "A" or "B" indicates a stock is in a high-momentum phase, often characterized by recent 52-week highs or consistent outperformance relative to its sector. This score complements the Zacks Rank, which assigns stocks a rating from #1 (Strong Buy) to #5 (Strong Sell). Historically, stocks with a Zacks Rank of #1 or #2 and a Momentum Style Score of "A" or "B" have outperformed the market.

For industrial stocks, the methodology accounts for sector-specific dynamics, such as capital intensity and demand cycles. For instance, BHP Group (BHP) and Designer Brands (DBI) have been highlighted as top momentum picks in recent quarters, with BHP's shares surging 23.8% annually and DBI's stock rallying 117.31% in a single quarter.

These examples underscore the effectiveness of the Zacks system in isolating industrial stocks with robust momentum.

ITT Inc.: A Case Study in Momentum-Driven Growth

ITT Inc., a diversified industrial manufacturer, exemplifies the Zacks Momentum Style Score's ability to identify high-performing stocks. As of Q4 2025, ITT holds a Momentum Style Score of "B," reflecting its strong short-term performance. Over the past quarter, its shares rose 14.77%, significantly outpacing the S&P 500's 7.27% gain. Year-to-date, ITT's stock has surged 22.97%, further highlighting its momentum.

Earnings estimates also support ITT's momentum narrative. Over the past two months, five earnings estimates increased compared to none that decreased, pushing the consensus estimate from $6.50 to $6.61. Looking ahead, five estimates for the next fiscal year have moved upward, with no downward revisions recorded. This upward trajectory in earnings expectations aligns with the Zacks system's emphasis on both price and earnings momentum.

ITT's outperformance is even more striking when compared to its industry peers. While the Zacks Diversified Operations industry declined 1.22% in the past week, ITT's shares rose 1.69%. Over the past month, ITT gained 11.4%, far exceeding the industry's 0.41% return. Such relative strength is a hallmark of momentum stocks and reinforces ITT's appeal to investors seeking near-term growth.

Broader Sector Context: Industrial Momentum in 2025

The industrial sector as a whole has shown mixed performance in 2025, with some sub-industries outperforming others. For example, Everest Group (EG) has demonstrated strong profitability metrics, including a 22.4% return on equity, far above the industry average of 15.3%. However, its share price has lagged, gaining only 1.8% annually compared to the sector's 12.5% growth. In contrast, the Zacks Manufacturing – General Industrial industry has seen robust gains from companies like Flowserve Corporation (FLS) and Graham Corporation (GHM), which rose 20.1% and 73.6%, respectively, in the past year.

This divergence underscores the importance of tools like the Zacks Momentum Style Score in filtering out underperformers and focusing on stocks with the most compelling momentum. ITT's consistent outperformance, both in price and earnings, positions it as a standout within the industrial sector.

Conclusion: Leveraging Zacks Scores for Momentum Success

The Zacks Momentum Style Score provides a rigorous, data-driven approach to identifying industrial stocks with strong near-term growth potential. By combining price momentum with earnings revisions, the system isolates companies like ITT Inc., which have demonstrated both relative strength and favorable fundamentals. As the industrial sector navigates macroeconomic uncertainties, investors can use Zacks' framework to capitalize on momentum-driven opportunities with a proven track record of outperformance.

For those seeking to harness momentum in 2025, ITT Inc. serves as a prime example of how the Zacks Style Scores can guide investment decisions with precision and confidence.