Last Week’s Picks:
Our stock picks did OK last week which was a shortened trading week due to the Easter holidays. Trading was most profitable on Monday and the best strategy would actually have been to close out all trades on Monday’s close.
Non-farm payroll numbers were worse than expected on Friday and this could put extra pressure on stocks over the week ahead. Stock markets are already reacting to a series of analyst downgrades and the upcoming earnings season looks likely to be a stern test for equities.
The wide spectrum of first quarter earnings estimates leaves plenty of uncertainty as to how earnings season will go. There is also the chance that the bad news is now priced in, however, traders will need to be especially mindful of individual earnings announcements over the coming few weeks.
Here are this week’s stock picks: (vote for your favourite at the end)
Thor Industries $THO
This week’s trend following pick goes to Thor Industries, which represent the world’s largest manufacturer of recreational vehicles and has been in operation since 1980. I feel that the RV industry could continue to be a solid growth area over the coming years and the cheap price of oil should also help the stock move higher in the short term.
The fundamentals also look solid and despite hitting a new 52-week high, the shares are cheap trading at a PEG of 0.89, with no debt to speak of.
Sorl Auto-Parts Inc $SORL
The Extreme Discount System is designed to pick out undervalued fundamental plays that should move higher over the medium to long-term time horizon.
Sorl is a Chinese micro-cap stock with a low float and high insider ownership. Chinese stocks look to be cheaper across the board compared toUS companies right now and this one trades on the Nasdaq. I attempted to buy SORL on Thursday but regretfully my order did not get filled and the stock jumped over 7%. Nevertheless, there is plenty of upside left as Sorl trades at just five times earnings.
Small Cap Discretion
Sarepta Therapeutics $SRPT
The small cap discretion strategy looks for low float, small cap stocks with a high amount of bullish sentiment and has had some success in recent weeks.
This week’s pick is Sarepta Therapeutics which is involved in RNA-based therapies and trades around $14 a share. Sarepta CEO Chris Garabedian resigned last week and that was met with enthusiasm from investors. The stock has a high level of bullish sentiment, around 97% on StockTwits and the daily stock chart also looks appealing with a clear bottom formed.
Almost Family Inc $AFAM
Every now and then the Unusual Volume System delivers a trading signal that looks too difficult to take on. This time the stock is called Almost Family Inc., which surged higher on heavy buying, almost every day last week. The stock is therefore overbought, with an RSI(14) reading of 78. However, the system dictates that there is more upside to come.
The company itself is a leading provider of home health nursing and rehab services with over 30 years experience.
Disclosure: I do not own any of these stocks at present. I may initiate positions in any stocks mentioned within the next 72 hours.
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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