This article is part of the series

Nine Potential Breakout Stocks

Options Trading TradeKing

Continue Reading Below

Alan Brochstein identifies nine stocks that may be close to breaking out of consolidation patterns
  • Stocks from the Russell 3000 index, with market cap > $500mm
  • 1 month price return >3% (better than the market – some momentum)
  • 3 month price return >8% (better than the market – some momentum)
  • 3 month price return <20% (let’s not chase)
  • 12 month price return > 0% (absolute momentum)
  • 12 month price return < 20% (let’s not chase)
  • 5 year price return > 0% (S&P 500 is down 12%, so this is a great LT momentum indicator)
  • Price < 2X 52 week low (let’s not chase)
  • Price within 10% of 52 week high (this is what we are trying to eclipse)
  • PE < 1.4X 10-year median PE ratio (low or fair valuation)
  • PE/LT Growth Rate < 1.4X (low or fair valuation)
  • 2012 EPS estimate change stable for past three months (positive fundamentals)
  • Cinemark (CNK):  The death of the movie theater has been greatly exaggerated – 3.5% dividend yield too
  • Disney (DIS):  While at an all-time high, the valuation appears quite reasonable with earnings projected to grow 15% or more over the next 18 months
  • Montpelier Re (MRH) looks like a value stock with its single-digit PE and a 0.8X Price to Tangible Book Value and it also yields 2.1%.
  • Travelers (TRV) is much better known and also yields a generous 2.9% while trading at 1.2X TBV, recently clearing an all-time high though trading just 3% above its year-ago price
  • Cooper Companies (COO), known mostly for its contact lenses but also has a women’s health business, is breaking out to an all-time high, with analysts forecasting double-digit growth over the next two years
  • PPG Industries (PPG), also trading near an all-time high despite some challenges in Europe that resulted in a large restructuring in Q1, offers a 2.3% dividend yield
Invest By Model

Continue Reading Below

AB Analytical Services TradeKing All-Star Commentator http://community.tradeking.com/members/tk-all-star/blogs http://community.tradeking.com/members/tk-all-star/details FINRA SIPC

What do you think?

Click the button below to comment on this article.