Despite the dismal market, here are six stocks that have bucked the
trend. As of Tuesday, October 6, all had returned at least 22% so
far this year (year-to-date), and returned
at least 13% over the past month.
As you’ll see, these are not flukes. There were fundamental reasons
to account for their strong showings. That said, this market takes
no prisoners. If you buy any or all of them, you must be prepared to
sell on any signs of weakness.
Here are the six hot stocks. I'll tell you how I
found them at the end.
Coca-Cola Bottling Company Consolidated (COKE)
Produces, markets and distributes non-alcoholic beverages, mostly
Coca-Cola Company products, but it also produces and sells Dr.
Pepper Snapple and Monster Beverage products. Already strong revenue
and earnings growth combined with the acquisition of additional
bottling facilities from Coca-Cola spurred COKE’s share price gains.
Year-to date return (YTD) 132%, last month's
return 24%.
Straight Path Communications (STRP)
This small-cap ($500 million market-cap) holds, leases and markets
millimeter band spectrum licenses to mobile telecom network and
internet service providers. Millimeter band spectrum isn’t widely
used now, but will be needed when cell phones move up to the next
big thing, “5G.” So, STRP’s story is all about the future. Not much
in the way of revenues and earnings yet. YTD return 103%, last month
75%.
Central Garden & Pet Company (CENTA)
Makes and markets lawn & garden and pet supplies to specialty and
mass market retailers. Long stagnant is terms of sales and earnings,
new management is taking steps to reignite sales and earnings
growth. YTD return 63%, last month 8%.
National Beverage (FIZZ)
Makes and markets flavored beverages targeting active and health
conscious. Historically not a fast grower, but recent new product
announcements have excited the market. YTD return 34%, last month
13%.
Pandora Media (P)
Already a major supplier of internet music services, but still
growing. Recent court rulings that could result in lower royalty
charges, and hence, higher profit margins, triggered its recent
share price advance. YTD return 22%, last month 20%.
Bofi Holding (BOFI)
Operates Bofi Federal Bank, an Internet bank focused on providing
financing for single-family and multi-family home purchases as well
as financing of medium size businesses. BOFI has grown earnings
around 28%, on average, annually, over the past five years. In 2014,
deposits jumped 46%. Those are fantastic numbers
for banks. YTD return 169%, last month 21%.
Used Finviz Screener
I found these stocks by using the free
Finviz stock screener (www.finfiz.com)
to implement a basic price momentum screen. I searched for USA-based
stocks with minimum $300 million market-caps (small-caps or larger)
that had moved up at least 20% over the past quarter and at least
10% over the past month. Then, I sorted the resulting list based on
year-to-date returns and deleted stocks that showed negative returns
over the past month, quarter, or year-to-date. Since Finviz doesn't
know much about dividends, the return figures reflect share price
appreciation only.
Momentum Stocks Require Attention
Momentum strategies are inherently risky. Further, I may have
missed lurking problems. So, do your own research. The more you know
about your stocks, the better your results. If you do buy any of
these momentum plays, sell on any bad news, sell on any negative
earnings surprise (earnings below analyst forecasts), or sell when
the share price drops 10% below its recent high.
published 10/6/15
