Last week’s picks*:

VA: PKG -0.92%
SS: CTXS +1.58%
MR: FF +4.78%
TF: SNDK -1.89%

Stock markets looked shaky for long periods last week but they ended on a positive note on Friday sending the Dow Jones Industrial Average up by over 1%. Thursday’s bearish engulfing pattern on the daily chart is pointing to further weakness this week though it is hard for anyone to bet against the market when we are in such a strong uptrend.

The calendar will be busy too and traders will be watching European inflation before another ECB rate decision on Thursday. Then on Friday, we will see the latest non-farm payrolls number. Payrolls are expected to increase to 215k and the unemployment rate is due to hold steady at 6.1%.

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

Value

Copa Holdings $CPA

I have tipped Copa Holdings on this blog before but the stock has really under-performed lately owing to concerns over its business in Venezuela.

However, this is still a well run operation and Copa is trading extremely cheaply now with a PE of just 9.17. The stock is oversold on the chart with an RSI of 21 and it’s hard to see it falling much further.

In addition, JP Morgan analysts gave the stock an overweight rating last week with a price target of $138. That could well be enough to see a rebound this week.

this weeks stock picks CPA stock chart

Mean reversion

Barrett Business Services Inc. $BBSI

Barrett work with over 3000 businesses daily, helping them to deal with payroll, staffing and human capital management issues. The stock is down -56% year-to-date giving it a cheap forward PE ratio and PEG of just 0.66. The company has little debt and has an impressive track record of growing earnings and daily RSI is now oversold with a reading of just 17.4.

The stock seems to have found some support around the $40 level and it would be no surprise to see a small bounce this week.

BBSI chart

Penny stock

Alphatec Holdings Inc. $ATEC

This week’s penny stock goes to Alphatec Holding Inc. which trades at $1.73 a share with a market cap of $169 million.

The company is involved in providing patient solutions for spinal disorders and is developing a number of products along those lines including products Avalon, Zodiac and Pegasus.

The stock recently hit a new 6 month high and medium term EMA crossovers have since crossed over indicating the uptrend is in place. The latest pullback gives trend followers an opportunity to get in. (Another penny stock to consider this week is $CRDC)

stock picks this week ATEC

StockTwits

Nike Inc. $NKE

At the time of writing, Nike Inc. was the fourth most talked about stock on StockTwits with social volume of +675%. This comes as the stock gapped higher by 12% on Friday after reporting earnings that included a 15% jump in revenue and a 23% boost in profit.

The stock now trades with a slightly expensive PE of 27.97 and PEG of 2.10.

Despite the big rally, StockTwits users are still bullish on the stock by a margin of 88% bulls to 12% bears.

stock picks this week Nike Chart

Short Sellers

FleetCor Technologies Inc. $FLT

FleetCor Technologies provide specialised payment products around the world that includes fleet cards, food cards and discount cards.

The stock appears overpriced right now trading with a price to earnings of 38.5 and PEG ratio of 3.21. Price to sales is also high (11.57) as is price to book (7.88). The company also has a fair amount of debt.

The chart exhibits a bearish engulfing candle pattern that took place on Thursday and the stock also broke an upward trend line.  This points to further weakness ahead.

this weeks stock picks FLT chart

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*Hypothetical results. Commissions and slippage not applied.

Disclosure: I am long CPA.

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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