At StateoftheMarkets.com, we strive to “own the best and ignore the rest” in our equity portfolios. Toward this end, each day we search our database for a “top stock” (a top rated company in terms of earnings strength as well as company and industry performance) that presents a strong technical “set up” and a good entry point.
In short, when our equity team is looking to add a stock to one of our portfolios, the “bull’s eye” stock shown below is generally their first choice.
|Company||Symbol||Industry||Stock Rating||YTD% Gain||S.T.
|AOL Inc||AOL||Internet Software & Services||6.1||+24.53%||$36.42|
Why We Like The Stock:
AOL Inc. (NYSE:AOL) is our most compelling buy today due to the fact that it is a top rated stock (in terms of earnings strength and company/industry performance) presenting a favorable short-term trading opportunity. AOL has been trending higher since October of 2012, pausing towards the end of the year to consolidate around $30 before continuing its march higher in early February. While it hasn’t had the upward thrust of some of its competitors like CoStar Group (NASDAQ:CSGP) or ValueClick (NASDAQ:VCLK), AOL is still a positive technical setup.
Currently, the stock is sitting comfortably near its 50-day moving average of $38.15. There is resistance overhead around $40, which AOL failed to break out of in mid-February, late March, and again in the second week of April. While this isn’t great for its long-term prospects, a $40 target for a short term trade is still +5% from current prices, which is not too shabby a gain. With some support here, and a nice cushion on the 50-day moving average, AOL looks poised to make a run back to $40 very soon. So, at current prices, we would be buyers of AOL for a short term trade with an immediate 5% upside.
We Would Be Buyers:
At the current price (~$38.15).
AOL Inc. (AOL) is a global Web services company with a range of brands and offerings and a global audience. The Company’s business spans online content, products and services, which it offers to consumers, publishers and advertisers. Its business operations are focused on AOL Properties and Third Party Network. AOL Properties include its owned and operated content, products and services in the Content, Local, Paid Services and Consumer Applications strategy areas in addition to its AOL Ventures offerings. AOL Properties also include co-branded Websites owned by third parties. It generates advertising revenues from AOL Properties through the sale of display advertising and search and contextual advertising. It offers a range of display advertising, including text and banner advertising, mobile, video and rich media advertising, sponsorship of content offerings, and local and classified advertising.
Stock Rating: 6.1
The Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 – 10 with 10 being the highest.
AOL – Last Three Months
AOL – Last 12 Months
AOL – Last Five Years
At the time of publication the editor and affiliated companies own the following positions: None
Note: Positions may be bought or sold while this publication is in circulation without notice.