Last week’s picks*:

VA: FCX -0.53%
FX: EURUSD -60 pips
MR: DISCA +2.12%
SS: NGPC +1.05%

Not a huge amount on the calendar this week. We will see Draghi speak on Monday and there will be Japanese inflation and US GDP numbers to digest later on. On top of that, I did read this slightly concerning article on Bloomberg about a Nikkei crash. I generally agree with what’s being said so hope that Prime Minister Abe doesn’t do anything to rock the boat. Here’s this week’s stock picks:

Value

Packaging Corporation of America $PKG

Packaging Corp. is the one of the largest producers of containerboard, corrugated packaging products and uncoated paper in the US and is one of the major suppliers to online behemoth Amazon.

George Rho just wrote up a nice piece about PKG over on Seeking Alpha and I can’t disagree with his findings as I am currently long the stock too.

Packaging Corp Stock Picks Stock chart

Short sellers

Citrix Systems Inc. $CTXS

I would not be interested in buying Alibaba after it’s recent IPO and jump of 38%. I am also not a buyer of GoPro, Pfizer or Citrix Systems Inc., one of the world’s best known software companies.

The business currently trades with an expensive PEG ratio of 3.32 with a PE of 40 and a price to book of 5.79. The company is also carry a decent amount of debt and is moderately overbought with a daily RSI reading of 62. Lastly, Friday’s bearish engulfing candle pattern points to a bearish start to the week.

citrix stock chart

Mean reversion

FutureFuel Corp. $FF

FutureFuel has been on my watch list for a while as the company possesses a number of high quality characteristics – such as a low PE and PEG, healthy current ratio, little debt and strong EPS growth.

The company is involved in organic chemicals and biofuels and is committed to a cleaner future. The stock has dropped heavily recently and has almost reached a parabolic type event. Now might be the perfect time to buy some shares.

FutureFuel-chart-stock-picks

Trend following

SanDisk Corp. $SNDK

SanDisk Corp. hit a new 20 day high last week but fell back on Friday by 2% giving a possible entry opportunity for traders.

SanDisk are world leaders in flash memory and the stock is already up 44% year-to-date. Despite this, the stock is not expensively priced with a PEG ratio of 0.83 and a forward PE of 15.20. The stock also has a healthy current ratio and a strong history of increasing earnings.

Last Friday’s drop was not on particularly large volume and the upward trend should resume this week.

sandisk stock chart

*Hypothetical results. Commissions and slippage not applied.

Disclosure: I am long FF and PKG.

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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