Last week’s picks*:

VA: CPA +7.26%
MR: BBSI +3.08%
PS: ATEC -5.20%
SS: FLT -0.15%
ST: NKE +0.88%

Stock markets closed higher on Friday after another volatile week almost derailed investor confidence. In the end, US unemployment numbers came in better than expected and that helped markets to finish in the green with the Dow Jones advancing by 1.23% to the close.

Overall our stock picks did OK, particularly $CPA which responded from a sharply oversold level. Our penny stock pick ATEC fell as small cap shares were punished across the board.

This week, there will be lots going on and traders will be getting ready for the upcoming earnings season with Alcoa Inc due to kick off proceedings on the 8th October. Traders will also be watching geopolitical events, interest rate decisions from the RBA and BOE as well as FOMC meeting minutes on Wednesday.

Here’s this week’s picks for different traders: (vote for your favourite)

Value

Seaspan Corp. $SSW

Seaspan is a leading shipping company domiciled out of Hong Kong and priced at 16 times future earnings. Political unrest in Hong Kong has been partially to blame for the recent poor performance of this stock and if we see an improvement this week then this share could do quite well.

PEG is 0.94, current ratio is 2.10 and the company pays a dividend of 6.51%. Technically, the stock is set up to bounce after hitting a support line at $21 last week which also resulted in a bullish dragonfly candle pattern on Thursday.

this weeks picks ssw chart

StockTwits

Nuance Communications Inc $NUAN

Last week’s StockTwits play singled out NKE and I would not bet against more gains for the sportswear giant ahead.

However, this week’s pick is Nuance Communications Inc., a technology company trading at 13 times forward earnings.

Nuance has seen a +623% increase in social volume over the last 7 days on StockTwits and rolling 7 day sentiment is 100% bullish. There could well be gains ahead now the stock has hit the $15 level for the third time.

this weeks stock picks nuan chart

Mean reversion

Helmerich & Payne Inc. $HP

Helmerich & Payne Inc. is an oil and gas explorer and owns the largest fleet of drill rigs in America. The stock is down around 24% from it’s 52 week high and fell almost 9% last week alone. Much of the loss can be down to the strength of the dollar and the drop in crude oil, rather than weakness with the company itself.

Indeed, the stock is cheaply valued here with a forward PE of 12 and PEG of 0.88. The company also boasts a strong balance sheet and a healthy yield.

helmerich and payne chart

Short Sellers

Lifeway Foods Inc $LWAY

Lifeway Foods Inc. manufactures, markets and distributes probiotic, cultured and functional dairy good products in the US and has a market cap of $236 million.

Lifeway Foods trades at an unhealthy 80 times price to earnings with a PEG ratio of 6.20. The stock advanced 3.28% last week giving it an RSI of 62 and taking it towards resistance at $14.60.

lifeway chart

 

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*Hypothetical results. Commissions and slippage not applied.

Disclosure: I am long SSW & HP.

Additional disclaimer: Please be aware of the usual risks to trading in financial instruments. Please remember the importance of doing your own research and understand the cost to trade including trading commissions and the bid:ask spread.


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