5 Small Cap Doublers Flying Under the Radar
- The public is terrified to own stocks. And who can blame them? The news from Europe, and now Asia, is so grim that many investors are convinced that even if the U.S. economy manages to blunder through, they want nothing to do with stocks. And with every major index now below its 200-day moving average, there has been significant technical damage done to virtually all U.S. markets.
However, the technical indicators and sentiment numbers are now saying the market is grossly oversold. And it’s looking less and less likely that the problems in Europe are going to derail the U.S. economic recovery. So, with the S&P 500 down more than 10% from its April high, stock prices look very enticing.
But investors can’t run out and buy anything and everything. They need to remain patient use the major moving averages (i.e., 20-day, 50-day and 200-day) to tell them when to buy. Here are six stocks that are good buys now.
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Top Stock #1: Advance Auto Parts
Advance Auto Parts, Inc. (NYSE: AAP) operates more than 3,000 retail
auto parts stores in about 40 states, Puerto Rico and the Virgin Islands. Sales are expected to increase 7% in 2010, following a 5.3% increase in
2009. The company said the growth is the result of 150 new stores in 2010, with increases in the average ticket, along with a continued focus on increasing
commercial revenues, driving net sales results.The stock broke from a double-top with
a powerful breakaway gap following heavy accumulation. Standard & Poor’s 12-month target price is $60, and that target is confirmed by technical
analysis.
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Top Stock #2: Ford Motor Company (F)
Analysts are projecting that Ford Motor Company (NYSE: F) will strongly
outperform the market over the next six to 12 months based on three key factors: earnings strength, relative valuation and recent price movement.
EPS increased from a loss of $3.69 to an estimated $1.52 over the past five quarters, indicating an improving growth rate.A Zacks analyst said, “The company recently reported better-than-expected earnings. In addition, favorable net pricing, structural cost reductions
and improved Ford Credit results are driving Ford’s earnings. These have led us to upgrade the recommendation on shares from Neutral to Outperform.”Ford has held its bullish support
line for months, and bounced from the 200-day moving
average and the support line following a strong buy signal from the stochastic. The technical target for the stock is $16 by year-end.
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Top Stock #3: Cypress Semiconductor (CY)
Cypress Semiconductor Corporation (NASDAQ: CY), which provides high-performance
chips for touch-screens and other sophisticated operations, has been in a bull market for years. Since late 2008, it rose from under $5 to a high
in late April of almost $14.Early this year, the stock broke from a six-month consolidation and surged from a spread double-top at around $11.50, following a four-month period
of very heavy accumulation.Ford Equity Research has a “buy” recommendation on CY, and our longer-term target is $15 to $16.
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Top Stock #4: Sprint Nextel Corporation (S)
Sprint Nextel Corporation (NYSE: S) had been in a bear market since
2006, falling from over $24 to under $2 in late 2008. Sprint has been a favorite of mine with buy recommendations on Feb.
22 at $3.55, and again on March
18.Recently, despite heavy selling in the broad market, Sprint broke from a triple-top on very heavy volume.
Our trading target is $6, but a run to $10 by year-end is possible. S&P rates Sprint a “four-star buy” and recently increased its 12-month target
to $6 from $5.
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Top Stock #5: Teva Pharmaceutical (TEVA)
Teva Pharmaceutical Industries Limited (NASDAQ: TEVA), which is
known for its biogenerics and active pharmaceutical ingredients (APIs), has been in a bull market since 1999. Its powerful advance makes it an institutional
favorite, so whenever it falls to its 200-day moving average, buyers seem to rush to the stock.Last week, TEVA issued two strong buy signals from our proprietary indicator, the Collins-Bollinger Reversal (CBR), just below the 200-day moving
average and within a major support zone.S&P rates TEVA a “five-star strong buy” and recently increased its 12-month price objective to $75 from $70. Buy this stock now.
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Top Stock #6: Yamana Gold (AUY)
Large-cap, Canadian-based gold miner, Yamana Gold Inc. (NYSE: AUY),
has been consolidating following a pullback after making a high at just over $14 in December. Following a classic “W” consolidation, a breakout occurred
on May 11, but like many high-volume breaks, it quickly reversed to just under its breakout point, where it is a strong buy.Note the heavy accumulation that preceded the breakout, support at its 50-day moving average, and a new stochastic buy signal. The target for AUY
is $13.Related Articles:
5 Small Cap Doublers Flying Under the Radar
All five of these companies have explosive growth potential, rock-bottom valuations and are priced under $10 per share. PLUS, they’re set to
double even if the market plunges — get their names here.
