Any time I see a stock with a consistent upward trend, I take notice. When that trend persists in a market as volatile as the one we’ve seen lately, I really take notice.
That is exactly what’s been happening with today’s recommendation, Dr Pepper Snapple Group, Inc. (DPS).
I’m sure this is a familiar name for you, even if you hadn’t considered the stock before now. Dr Pepper Snapple is made up of more than 40 businesses that have come together over the past 30 years. Together, they make a single company that manufactures and distributes non-alcoholic beverages in the United States, Canada, Mexico and the Caribbean. Some of its most well-known products are 7-Up, Sunkist, Canada Dry Ginger Ale, Country Time Lemonade, Mott’s Apple Juice—and, of course, Dr Pepper and Snapple.
I’m recommending DPS to you today because the stock’s share price has been moving solidly higher for the past four months, and it has doubled in the last three years. The company’s fundamental score of 48 out of 100 is fair, while its technical score of 80 out of 100 is very good. Overall, the Turner Analytics database rates DPS as a Buy.
In addition to staying above the S&P’s trend line (the blue dashes you see in the graph below), DPS has also outperformed its Industry (Beverages – Soft Drinks) and Sector (Consumer Staples). The company has also had earnings surprises for the past three quarters—6.6%, 2.7% and 4.9%, respectively—and it’s currently on track to post 11.4% earnings growth this quarter.
The data shows DPS as a strong buy going forward, too. It’s expected to report 1.1% sales growth year-over-year, institutional ownership is strong at over 90%, and DPS currently pays a $1.92 yearly dividend.
Last week’s weak market actually worked in our favor for Dr Pepper Snapple, since shares fell off a bit and gave us a decent entry price. You should enter DPS at $90.40 or better and set your stop at $80.03. My near-term target is $97.40.
Mike Turner and his team of software engineers developed Turner Analytics, a sophisticated software market and trade-timing system that provides unbiased, quantifiable recommendations on thousands of equities and rates, ranks and scores these equities from best to worst in an easy-to-use on-line tool for individual investors. He is also the editor of Signal Investor.
Most recently, Mike launched Quick Hit Trader. This trading service is based on weekly analysis of the 6,000+ stocks and ETFs in his proprietary Turner Analytics computer stock-rating system. Every Monday before the market open, Mike emails subscribers his three best trades for the week, including the buy, sell and target price.
