The Stellar And Familiar

The fastest growing names in consumer goods are all too familiar. Here we’ve screened for fundamental performance of five years sales growth of 20% or more, current year EPS growth of 20% or more, and at least 15% return on equity.

Three Year Chart Views:

  • AAPL may be carving out the right side of a base (more on the story for subscribers.)
  • EVK is attracting larger volume, which while mostly negative, may ultimately be good if it begins to attract analysts and funds with continued stock performance. 
  • GMCR is testing its key 40-week exponential moving average. 
  • LULU is putting in a bearish head-and-shoulders, which won’t stay bearish if it continues to boost sales over the long run – but adhere to this right now.  
  • RKT is testing its key 40-week exponential moving average after a possible short-term top. 
  • SHOO appears to be headed for a test of its 40-week average. 
  • SODA appears to be headed for a test of its 40-week average. 
  • UA continues in break out mode, trending solidly above its 50-day average. 

Ticker Company Sector Industry Country
AAPL Apple Inc. Consumer Goods Electronic Equipment USA
EVK Ever-Glory International Group, Inc. Consumer Goods Textile – Apparel Clothing USA
GMCR Green Mountain Coffee Roasters Inc. Consumer Goods Processed & Packaged Goods USA
LULU Lululemon Athletica Inc. Consumer Goods Textile – Apparel Clothing Canada
RKT Rock-Tenn Co. Consumer Goods Packaging & Containers USA
SHOO Steven Madden, Ltd. Consumer Goods Textile – Apparel Footwear & Accessories USA
SODA SodaStream International Ltd. Consumer Goods Beverages – Soft Drinks Israel
UA Under Armour, Inc. Consumer Goods Textile – Apparel Clothing USA

Symmetry Call

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The rally has now hit a key resistance zone of symmetry, where its length now matches what it did in September. Odds are better than even we’ll see some kind of pullback, or at least a fight as the major indexes attempt to crawl higher into new high territory. 

This is a good problem for a bull. A bad one might be a series of high volume selling days to suggest institutional abandonment.

Growth stock buyers have much to choose from these days. We’re holding our Buyer’s Caution bias, which has been the case this entire year. 

30’s Opportunity

Here’s our studly list of publicly traded companies pulling in 30% or more in earnings growth this year and backing it up with 30% or more in sales growth as well as return on equity of 30%. 

We’ll spend time digging into the financials of these this week. From a chart perspective, GGAL looks opportune as it attracts institutional grade volume for the first time, forming a right side of a technical base. Perhaps good things will be in store here if its pattern matures into a traditional buy signal for us. Nearly all of the rest on the list have broken out. 

Ticker Company Sector Industry Country
AZPN Aspen Technology, Inc. Technology Business Software & Services USA
CAMP CalAmp Corp. Technology Communication Equipment USA
GGAL Grupo Financiero Galicia S.A. Financial Foreign Regional Banks Argentina
HCLP Hi-Crush Partners LP Basic Materials Industrial Metals & Minerals USA
KORS Michael Kors Holdings Ltd. Services Specialty Retail, Other Hong Kong
MTGE American Capital Mortgage Investment Crp Financial REIT – Diversified USA
PATK Patrick Industries Inc. Industrial Goods Lumber, Wood Production USA
PCYC Pharmacyclics Inc. Healthcare Drug Manufacturers – Other USA
QCOR Questcor Pharmaceuticals, Inc. Healthcare Biotechnology USA
QIWI Qiwi plc Financial Credit Services Russia
REGN Regeneron Pharmaceuticals, Inc. Healthcare Biotechnology USA
RGR Sturm, Ruger & Co. Inc. Industrial Goods Aerospace/Defense Products & Services USA
RNF Rentech Nitrogen Partners, L.P. Basic Materials Agricultural Chemicals USA
SFUN SouFun Holdings Ltd. Technology Internet Information Providers China
SSTK Shutterstock, Inc. Services Business Services USA
TXTR Textura Corporation Technology Application Software USA
WGO Winnebago Industries Inc. Consumer Goods Recreational Vehicles USA

LNKD Down

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Market leadership has taken it on the chin from Bears. Here’s a closer look at  LinkedIn (LNKD),  a key member of the outperforming group that also includes TSLA, FB and NFLX.

After failing for a couple weeks to make new highs, the stock has recently floundered on heavy sell volume, effectively closing a technical gap and key support zone on the chart. We’re not so interested in buying at these extended, post breakout levels. Though its behavior will be an indicator for other growth stocks ready to breakout.

The Mountain View, CA based company pulls in more than $1B a year operating an online professional network, in case you didn’t know. While free to individual users, it makes half of its sales charging companies to recruit through it, more than a quarter from advertising, and the rest through premium subscription fees.  

For the last quarter over quarter comparison, it grew sales nearly 60% and EBITDA of $158 million for more than 30% growth. No doubt Wall St. has been impressed with its no debt and more than $800 million cash, though return in equity clocks in at a little more than 4%, according to Yahoo! Fn.   

Perhaps we will see another base form in here. 

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TSLA Moving

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Today we’re taking a closer look Tesla Motors Inc. (TSLA) , one of the key leaders in the growth stock landscape for this fall. Of the other three glamours pushing steadily higher, LinkedIn (LNKD), Facebook (FB) and Netflix (NFLX), Tesla actually makes something durable rather than provide a service. 

The Palo Alto based company with nearly 3,000 employees makes and sells electric cars. 

The durability of its stock should also be noted. Its price has held up comfortably above its 50-day moving average despite heavy sell volume supposedly related to a knee jerk reaction over a video of one of its cars on fire. A barrage of news and chatter over this “PR nightmare” raised many questions among investors. While heavy selling might suggest a chink in the armor, the fact that the stock hasn’t collapsed to anything more than an apparent pullback tells us there’s real strength in this one. 

Under the hood, the potential to become highly profitable looks very encouraging as the company has grown sales more than  1,400% on a year over year basis, which have come in at $1.3 billion, latest check. Earnings growth remains to be seen with it taking in a mere $30 million over the twelve trailing months, according to Yahoo! data.  Total cash comes in at $746 million with nearly $600 million debt.

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Sellers Test 50

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Four official, albeit light, days of distribution in the past five session tells us we’re seeing some funds unload as the major indexes test their 50-day moving averages. 

The 50 is key. Either we’ll see sell volume dry up in here or it picks up in this zone. As is, all major sectors are trending above their major moving averages. Any deterioration of this number will suggest more may come. 

Fast Fn

A look at the Financial Sector’s fastest growing. The following have earnings per share growth of more than 30% this year, quarter over quarter sales growth of at least 30%, and return on equity of more than 15% (to weed out the weak.)

Ticker Company Sector Industry Country
ADX The Adams Express Company Financial Closed-End Fund – Equity USA
AI Arlington Asset Investment Corp. Financial Mortgage Investment USA
APO Apollo Global Management, LLC Financial Diversified Investments USA
CUZ Cousins Properties Inc. Financial REIT – Diversified USA
EIG Employers Holdings, Inc. Financial Property & Casualty Insurance USA
FBRC FBR & Co. Financial Asset Management USA
GGAL Grupo Financiero Galicia S.A. Financial Foreign Regional Banks Argentina
HCI HCI Group, Inc. Financial Property & Casualty Insurance USA
MKTX MarketAxess Holdings Inc. Financial Investment Brokerage – National USA
NSM Nationstar Mortgage Holdings Inc. Financial Mortgage Investment USA
OAK Oaktree Capital Group, LLC Financial Asset Management USA
PMT PennyMac Mortgage Investment Trust Financial REIT – Residential USA
QIWI Qiwi plc Financial Credit Services Russia
TY Tri-Continental Corporation Financial Closed-End Fund – Equity USA
TYY Tortoise Energy Capital Corp. Financial Closed-End Fund – Equity USA
WAC Walter Investment Management Corp. Financial Mortgage Investment USA
WETF WisdomTree Investments, Inc. Financial Asset Management USA