The stock had a bullish start for 2013. Dow Jones had increased 5.5% and S&P 500 had gained 4.81% as of January 24, 2013. In this article, three stocks with bullish trends are identified and may have more upside potential for 2013.
Lumber Liquidators Holdings Inc.
Lumber Liquidators Holdings Inc. (LL) is a specialty retailer of hardwood flooring in the United States, based on industry sources and its experience. This specialty is highly affected by the economic environment and housing market. LL Closed at $58.60 with 1.95% gain on January 25, 2013. LL had been trading in the range of $18.65-$59.48 in the past 52 weeks. LL has a beta of 1.37
The data suggests that spending on home improvement-related projects will witness an increase of 10.6% in the Q1 2013, resulting in an annualized value of $127 billion, 16.8% in Q2, reaching an annualized value of $134.4 billion and 19.7% in the Q3 to reach $145.5 billion. A rebound in the housing market would play a key role to boost the confidence in Lumber Liquidators, a retailer of hardwood flooring.
The Board of Directors had authorized the repurchase of an additional $50 million of its common stock on November 15, 2012.
Fundamentally, LL has an enterprise value of $1.55B with a market cap of $1.59B. LL has a total cash of $40.06M and has zero total debt. LL generates an operating cash flow of $45.02M with a levered free cash flow of $25.41M. LL has higher revenue growth (3 year average) of 12.2, as compared to the industry average of -1.0. LL has higher operating margin of 8.7%, ttm, and net margin of 5.4%, ttm, comparing to the averages of 8.2% and 4.7%, ttm, respectively. LL generates higher ROE of 19.5, comparing to the average of 15.6. LL, however, has higher P/E of 39.5, which is higher than the industry average of 23.4 and LL's 5 year average of 24.4. LL has a forward P/E of 29.9, which is higher than S&P 500's 13.3.
Technically, the MACD (12, 26, 9) is showing a bullish trend and RSI (14) is indicating a strong bullish momentum at 69.18. LL is currently trading above its 50-day MA of $53.27 and 200-day MA of $42.90.
On January 25, 2013, LL had a call volume of 1,389 with an average call volume of 244. The daily volume ratio was 5.69. The most active call was May 17, 2013 call at the strike price of $50.00 with a volume of 1,667 and an open interest of 71. The implied volatility is 41.8, and chance of breakeven is 40.18. The historical volatility for LL is 25.25 for 1 month, 29.30 for 3 months, and 44.58 for 1 year.
American International Group, Inc.
American International Group, Inc. (AIG) is a holding company, engaging in insurance and insurance related activities in the United States and abroad. After the bailout, AIG becomes a smaller insurance organization. AIG closed at $36.60 with 0.38% gain on January 24, 2013. AIG had been trading in the range of $24.66-$37.67 in the past 52 weeks. AIG has a high beta of 3.45.
International Lease Finance Corporation, a wholly owned subsidiary of AIG, announced that it will continue to focus on strengthening the company's operations throughout 2013. ILFC had bolstered its liquidity and capital position in 2012 by raising $4.2 billion through several financing structures and entering into a new $2.3 billion committed unsecured revolving credit facility. In addition, for AIG, property and casualty insurers appear to be on the brink of a comeback. The cyclical nature of the insurance market is beginning to turn in favor of insurers though, further brightening the outlook for the industry.
On January 24, 2013, AIG had its "outperform" rating restated by Sanford C. Bernstein with a $45.00 target price. Analysts at Evercore Partners also reiterated an "overweight" rating on AIG with a $40.00 price target on January 22, 2013.
Fundamentally, AIG has a total cash of $49.10B with a total debt of $73.75B. AIG has a book value of $68.87 per share. AIG generates an operating cash flow of $4.08B with a levered free cash flow of $93.68B. AIG has higher operating margin of 16.5%, ttm, and net margin of 36.9%, ttm, as compared to the industry averages of 9.0% and 10.9%, respectively. AIG generates stronger ROE Of 27.8, comparing to the industry average of 9.2. AIG's P/E of 2.4 is lower than the industry average of 8.1. AIG's forward P/E of 9.6 is lower than S&P 500's average of 13.3.
Technically, the MACD (12, 26, 9) turned to show a bullish trend on the last trading day with the MACD Histogram at 0.028. RSI (14) is showing a bullish lean at 61.59. AIG is currently trading above its 50-day MA of $34.28 and 200-day MA of $32.97.
On January 24, 2013, AIG had a call volume of 61,027 with an average call volume of 23,022. The daily volume ratio was 2.65. The most active call was Feb. 15, 2013 call at the strike price of $37.00 with a volume of 24,727 and an open interest of 39,280. The implied volatility is 21.0, and the chance of breakeven is 29.80. The historical volatility for AIG is 20.63 for 1 month, 29.36 for 3 months, and 29.38 for 1 year.
Cheniere Energy, Inc.
Cheniere Energy, Inc. (LNG) engages in the liquefied natural gas, LNG, related business. The Company owns and operates the Sabine Pass LNG terminal and Creole Trail pipeline in Louisiana. Cheniere Energy closed at $20.83 with 0.19% gain on January 24, 2013. Cheniere Energy had been trading in the range of $10.51-$21.20 in the past 52 weeks. Cheniere Energy has a beta of 0.93.
Cheniere Energy currently has the U.S.'s only approved liquefied natural gas export terminal, and it is believed that the site will have the capacity to ship 2.6 billion cubic feet of gas per day when export activity commence in late 2015. Although Cheniere Energy is the only LNG export company so far to receive a permit from federal regulators, 15 more companies have applied for permits.
Fundamentally, LNG has a total cash of $214.99M with $2.33B total debt. LNG has a book value of $2.86 per share. LNG generates a negative cash flow of -107.83M with a levered free cash flow of -1.21B. LNG has negative operating margin and net margin of -19.2% and -109.2%, ttm. LNG has a negative return on equity of -43.11%. However, LNG has a revenue growth (3 year average) of 243.8, comparing to the industry average of 10.9.
Technically, LNG is bullish with the RSI (14) showing a strong bullish momentum at 73.52. The MACD (12, 26, 9), however, is showing a slightly bearish trend with the MACD Histogram at -0.029. LNG is currently trading above its 50-day MA of $17.87 and 200-day MA of $15.81.
Sudden changes in options volume and implied volatility could be the beginning for a potentially explosive move. On January 24, 2013, LNG had a call volume of 18,214 with an average call volume of 8,837. The daily volume ratio was 2.06. The most active call was Jun. 21, 2013 call at the strike price of $25.00 with a volume of 20,081 and an open interest of 28,022. The implied volatility is 35.9, and the chance of breakeven is 15.44. The historical volatility for LNG is 22.54 for 1 month, 29.86 for 3 months, and 53.05 for 1 year.
Note: All numbers/prices are quoted from Morningstar, Schaeffer's Investment Research, Inc., Google Finance, and Yahoo! Finance. Investors and traders are recommended to do their own due diligence and research before making any trading/investing decisions.