Top 6 Stocks to Buy for November

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Despite the near-term concerns, i.e., the fiscal cliff, the election, etc., there is still enough support that has been constructed during the past year to stop us from falling into a long-term bear market. October was not kind to shareholders, but the major indices have fallen to strong areas of chart support and we are approaching a traditionally strong quarter for stocks.

Be patient, trade if you wish, but long-term investors would be wise to wait it out for major commitments. I expect that opportunities to buy will occur sometime in mid-November, and the stocks selected for this month should do well in a year-end rally.

Here are your top stocks to buy for November: 

Top Stock to Buy #1 – American Capital Agency Corp. (AGNC)

American Capital Agency Corp. (NASDAQ:AGNC) is a real estate investment trust (REIT) that earns income primarily from investing on a leveraged basis in agency mortgage-backed securities.

The stock was hit with a recent round of profit-taking and a rumor that the REIT would be cutting its annual dividend, which now stands at $5 per share for a yield of 15.6%. But the company has strong cash flow, and if it sells some of its holdings under QE3, then it should book profits from the sales.

Credit Suisse analyst Douglas Harter increased his price target to $36 from $32, noting that a “premium is justified by management’s ability to consistently protect (and grow) book value while generating strong taxable earnings.”

Technically, AGNC has retreated from a high of over $36 and appears to be stabilizing at its 200-day moving average at $32 and a support line at $31.50. Buy AGNC for a rebound to $36 and its high dividend payout. On Oct. 29, the company reported Q3 comprehensive income of $3.98 per share and a $500 million share buyback program.

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Top Stock to Buy #2 – Datawatch Corp. (DWCH)

Datawatch Corp. (NASDAQ: DWCH) provides support and business software for operational reporting and data analysis. The company has had robust revenue and earnings growth, good cash flow and expanding profit margins. For fiscal year (FY) 2012 (ended in September), analysts estimate earnings per share of $0.24, and $0.30 for FY 2013. The mean price target is $25.

On Oct. 17, Audi Japan Sales selected Datawatch to deliver a key performance indicator dashboard application to management. Of the Fortune 100 companies, 99 use Datawatch products and services.

Technically, the stock is in a powerful bull trend. In October, it corrected from a high of $20.83, found support on its bullish support line, executed a buy signal from our internal Collins-Bollinger Reversal (CBR) indicator, and triggered a buy from its MACD indicator. The trading target for DWCH is $25.

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Top Stock to Buy #3 – PC Mall (MALL)

PC Mall (NASDAQ:MALL), a direct marketer of technology products to businesses, government, individuals and educational institutions, is recommended for its earnings strength and relative valuation. Analysts estimate earnings of $0.66 for 2012 and $0.93 for 2013. Their mean target is $7.

The technical picture is strong with a wide rounding bottom (saucer) formation beginning early this year, and the stock is approaching a breakout at $6.75. After breaking the barrier at $6.50 in early October, it pulled back on profit-taking, but late in the month jumped back to its breakout point — a signal that another attempt at new highs is probable. Note the hook up on MACD. Buy now for a break above $6.75 with a target of $7.50.

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Top Stock to Buy #4 – PPL Corp. (PPL)

PPL Corp. (NYSE:PPL), a holding company for electric utilities in Pennsylvania, Kentucky, and the U.K., could pull back several dollars due to flat earnings for 2013 versus 2012. However, its capital investment program supports an average growth rate of 8% through 2016, according to S&P.

Future earnings and dividend increases (current yield: 4.9%) make PPL an ideal long-term, low-risk investment. Buy PPL on a pullback to its support line at $29 and hold for long-term growth and income.

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 Top Stock to Buy #5 – Ryland Group (RYL)

Ryland Group (NYSE:RYL) is among the largest U.S. homebuilders and has an extensive mortgage operation. On Oct. 23, RYL swung to a Q3 profit of $0.22 a share versus a year-earlier loss of $0.48. Gross margins beat analysts’ estimates, and Credit Suisse expects 2013 earnings of $1.65, up from $0.73 this year.

A turn up in the housing market appears to be developing, and RYL leverage should enable it to trade higher.

Technically, RYL is in a strong bull market having run from $18 in April to its recent high at over $34. The stock is under accumulation and received a strong buy signal from the MACD. The trading target for RYL is $40.

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Top Stock to Buy #6 – Standex International Corp. (SXI)

Standex International Corp. (NYSE:SXI) is a diversified company that manufactures a range of products and services for industrial markets. Zacks rates SXI as a top value play.

The company exceeded analysts’ forecasts reporting fiscal Q4 (ended in August) earnings of $1.02 versus an estimated $0.91. FY 2012 earnings were $3.39 versus $2.97 in 2011. FY 2013 earnings are estimated at $4.12 per share and are scheduled to be announced on Nov. 1 before the open. The stock has a forward P/E ratio of just 11.

Technically, SXI is in a powerful bull market that began early in 2009. It is resting just over its bullish support line at $43 where it recently flashed a CBR buy signal and a stochastic buy. It has resistance at a compound top at $47, but if it breaks the top, then look for the stock to run to the mid-$50s.

SXI Chart
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Article printed from InvestorPlace Media, https://investorplace.com/2012/10/top-stocks-to-buy-agnc-dwch-mall-ppl-ryl-sxi/.

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