FRAMEWORKS / GROWTH / MOMENTUM LEADERS
LENS 02 · GROWTH
Momentum Leaders framework, explained
IN THE TRADITION OF THE ACADEMIC MOMENTUM LITERATURE
Momentum Leaders screens on relative price strength, the measure the academic momentum literature studies. Unlike the other frameworks, its primary inputs are price data, not filings. The filing read asks whether the company’s disclosures corroborate the price signal or contradict it.
What it looks for
Relative-strength ranking across the universe with liquidity and listing guards.
Whether the filings corroborate or contradict the price signal — fundamentals that explain strength, and disclosed risks that undercut it.
The quantitative screen ranks companies on relative strength across several look-back periods, with liquidity and listing guards so thinly traded names do not dominate.
The AI read weighs the relative strength and the quality of the trading volume behind it, whether the fundamentals in the filings support the price move, and the risk profile the company discloses. Strength that the filings cannot explain counts against the match.
Filings it reads
Citations name the sections they rely on from these filings. Anything they do not disclose is marked unknown rather than inferred. Where a company puts its MD&A and financial statements in its annual report to shareholders instead of the 10-K, that report is read too.
| What is read | Why this framework reads it |
|---|---|
| Price-history summary (not a filing) | The relative-strength and volume data the framework is built on. Without it, a read is withheld or held to Geode at most. |
| Market trend state (not a filing) | The broad market backdrop the tradition conditions on. Without it, a read is withheld or held to Geode at most. |
| 10-K: Risk factors (Item 1A) and MD&A (Item 7) | Whether the fundamentals explain the strength, and what could undercut it. |
| Latest 10-Qs: MD&A and risk-factor updates | The most recent account of the business behind the price. |
| Recent 8-K results of operations (Item 2.02) | Results that may explain a recent move. |
| Form 4 insider transactions | Insider activity alongside the price move. |
What each verdict means
A verdict describes how well a company’s filings fit this framework, as of the filings read. It is never a prediction and never an action to take.
- GEMSTONE
- The price strength is broad and well supported by volume, and the filings corroborate it.
- GEODE
- The strength is there, but the filings neither clearly support nor contradict it, or the price data is incomplete.
- SEDIMENT
- The filings contradict the price signal, or disclosed risks undercut it.
When the filings cannot support any verdict, none is issued: the company is shown as Not scored.
What this framework misses
- Momentum describes past price behavior. The academic literature studies whether it persists on average, across many stocks; it says nothing certain about one company.
- Momentum can reverse sharply, and the refresh cycle for this framework is short for that reason.
- Its signals depend on current price data. Where a price figure cannot be derived, the read marks it unknown rather than guessing.
Terms used here
Other frameworks in the growth lens
This framework can be forked in the Strategy Lab. The growth lens page compares it with the other frameworks in its lens, and the how it works page walks through a complete read. Framework titles describe the method; practitioner names appear only as attribution — no methodology here is endorsed by or affiliated with the practitioners named.