Anthony Speciale Stock Market Analyst

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Why the Value versus Growth Debate is Pointless

One of the discussions I hear all the time is whether it’s best to be a value investor, a growth investor, a momentum investor… The list goes on and on.

But this is one of the dumbest arguments in the history of the world! I simply want to invest in assets that have a high probability of appreciating in value.

And the ideal way to do that is with a combination of my value-oriented and growth-oriented strategies.

They work in different timeframes, but they all provide investors with extraordinary excess returns compared to investing in a plain, boring index.

And best of all, they tend to work during different phases of the market. For example, when the value trade is hot, momentum is probably a bit behind. And when the momentum trade is hot, value is probably behind.

But when you put them together, those zigs and zags smooth out the overall volatility of one’s portfolio. So, if you’re picking just one strategy — value or momentum — you’re leaving a ton of money on the table.

My Momentum Pick Right Now

The kind of momentum we’re after is what I call smooth up-and-to-the-right momentum. These are companies with consistent buying pressure and stocks that are rising a little bit each and every day.

One company doing just that right now is CRA International, Inc. (CRAI).

This consulting company works with other companies to solve a range of problems from complex securities questions, lawsuits involving stocks and all sorts of derivatives issues.

They work with bankers, brokers and other lenders to deal with the incredible maze of state and federal rules and regulations that affect them.

I know a thing or two about the banking industry, and the regulatory restrictions these companies deal with on a daily basis are absolutely mindboggling.

CRAI also works with energy companies to help them navigate and plan their paths towards renewable energy markets. They even work with the Environmental Protection Agency (EPA) to study the various strategies for waste disposal in the mining industry.

Its team of experts work in many other industries as well, and they are doing an excellent job of growing the company.

CRA International has been growing its earnings by about 30% a year, and as the world of rules and regulations becomes more complex, I don’t really see that changing any time soon.

They have the contacts, expertise and knowledge to help companies, from large public companies to small and medium-sized businesses — figure out the best way to get things done without running afoul of the various regulatory agencies they may be subject to.

Checking All the Boxes

This company has everything I would want to see in a growth and momentum stock.

It has registered four consecutive earnings surprises in which it’s produced more profits than Wall Street analysts expected.

That means Wall Street is scrambling to raise their estimates for the stock, and estimate increases are one of the things that catch institutional buying interest.

CRAI just reported its highest quarterly revenue ever, and it raised full-year guidance for both sales and profits. Again, that is getting Wall Street’s attention.

It’s bringing in that constant institutional buying pressure, which is just pushing the stock up in a smooth, orderly fashion.

CRA International is a great example of a really strong momentum stock right now. And I expect that momentum to continue and provide us with extraordinary profits over the next year.

So, don’t just pick between growth or value. You need to use them both to earn higher returns with less volatility.