Small-Cap Tech Stock Could Jump Higher

by Sam Collins | November 29, 2012 1:01 am

TESSCO Technologies (NASDAQ:TESS[1]) — This company provides product and supply chain solutions to professionals who work with wireless mobile, fixed and in-building systems. Its sales growth has been spectacular, going from 15.04% three years ago to 21.18% last year.

Earnings for fiscal year (FY) 2012, ended March 31, were $2.03 per share, and management’s guidance for FY 2013 was recently updated to $1.90 to $2.15. On Oct. 31, the company reported Q2 earnings of $0.64 versus analysts’ estimate of $0.53. 

On Nov. 1, Forbes ranked TESSCO as one of America’s Best Small Companies[2].

The stock has been consolidating in a right triangle since a run from about $14 to $26 in Q1. It has found support at the conjunction of its 50-day and 200-day moving averages at $21. 

Buy TESS at the market with the expectation that it will break from the triangle at just over $22 and make a quick run to $26 or higher. This small-cap stock trades an average of just 32,600 shares per day and, therefore, could be highly volatile.

Trade of the Day -- TESSCO Technologies (NASDAQ:TESS)
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Trade of the Day Chart Key

  1. TESS:
  2. America’s Best Small Companies:

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