12-1 Momentum: formula and how to read it

Last year's return, ignoring the most recent month. Return from 12 months ago to 1 month ago (252 to 21 trading days). Skipping the latest month avoids its short-term reversal effect; the standard academic momentum signal.

Stock Meadow groups it under Price trend, and shows it in tables as Momentum 12-1.

12-1 momentum = price 21 trading days ago ÷ price 252 trading days ago − 1

A stock at $100 a year ago and $130 a month ago has 12-1 momentum of 30%, whatever it did in the last month. The numbers are made up for illustration.

A higher figure means a stronger past-year performance. Past momentum does not guarantee future returns.

When Stock Meadow ranks stocks, a higher figure scores better.

• Skipping the latest month avoids the short-term reversal effect, but it also ignores very recent news.
• Needs about a year of price history, so it is blank for recent listings.
• Momentum can reverse sharply, particularly after market turning points.

Treat any single metric as one clue, and read the company's financial statements before drawing a conclusion. Stock Meadow's figures are research tools based on reported data, not investment advice.

In Weighted ranking, Z-score composite and Balanced (no weak link), you choose the metrics and weights yourself, so you can include it in a custom score.

No fixed-recipe model scores it.

Read about every scoring model on the scoring models page.

• Six-Month Relative Strength: six-month return compared with the S&P 500.
• Price vs. 200-Day Moving Average: how far the price sits above its long-term trend.
• Relative Strength Index (RSI): recent buying momentum; 50–70 is healthy.

Why skip the most recent month in momentum?

Academic studies found that stocks that rose most in the last month tended to give back some of that gain, so the standard signal leaves the latest month out.

Is a higher or lower Momentum 12-1 better?

When Stock Meadow ranks stocks, a higher figure scores better. That is a ranking convention, so read Momentum 12-1 alongside other measures and compare similar companies.