Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

The following is a list of breakout stocks, based on moving average trends. For this article, we tracked down stocks that have recently seen the 50-day simple moving average (SMA50) move above the 200-day moving average (SMA200)--a bullish technical signal called the "Golden Cross".

When these two moving averages cross, it often represents a shift in investor sentiment.

And to provide more perspective on these breakouts, we also collected data on inventory turnover. All of the companies mentioned below have seen revenues rise faster than inventory, implying an improvement in inventory turnover ratios.

Given the improvement in inventory efficiency, some might say these stocks are set for more gains--what do you think? Details below.

Moving average data sourced from Finviz, financials sourced from Google Finance.



1. SMART Modular Technologies Inc. (NASDAQ:SMOD): Semiconductor Industry. Market cap of $439.18M. SMA50 at $6.30 vs. SMA200 at $6.08 (current price at $7.39). MRQ revenue growth at 75.77% vs. MRQ inventory growth at 31.48%. Inventory, as a percentage of current assets, changed from 22.41% to 26.02% (comparing the 13 weeks ending 2009-11-27 vs. 13 weeks ending 2010-11-26). Short float at 4.14%, which implies a short ratio of 1.97 days. The stock has lost -0.43% over the last year.

2. Sanmina-SCI Corp. (NASDAQ:SANM):
Printed Circuit Boards Industry. Market cap of $1.32B. SMA50 at $13.40 vs. SMA200 at $12.94 (current price at $16.93). MRQ revenue growth at 12.46% vs. MRQ inventory growth at 6.99%. Inventory, as a percentage of current assets, changed from 32.42% to 33.03% (comparing the 13 weeks ending 2010-01-02 vs. 13 weeks ending 2011-01-01). Short float at 5.35%, which implies a short ratio of 2.95 days. The stock has lost -0.24% over the last year.

3. Wright Medical Group Inc. (NASDAQ:WMGI): Medical Appliances & Equipment Industry. Market cap of $630.57M. SMA50 at $15.50 vs. SMA200 at $15.40 (current price at $15.88). MRQ revenue growth at 6.43% vs. MRQ inventory growth at 1.71%. Inventory, as a percentage of current assets, changed from 33.33% to 33.43% (comparing the 3 months ending 2009-12-31 vs. 3 months ending 2010-12-31). Short float at 4.66%, which implies a short ratio of 4.42 days. The stock has lost -12.55% over the last year.

4. Hewlett-Packard Company (NYSE:HPQ): Diversified Computer Systems Industry. Market cap of $106.53B. SMA50 at $44.92 vs. SMA200 at $43.83 (current price at $48.65). MRQ revenue growth at 8.13% vs. MRQ inventory growth at 5.52%. Inventory, as a percentage of current assets, changed from 11.66% to 11.93% (comparing the 3 months ending 2009-10-31 vs. 3 months ending 2010-10-31). Short float at 1.01%, which implies a short ratio of 1.24 days. The stock has lost -2.89% over the last year.

5. Raytheon Co. (NYSE:RTN):
Aerospace/Defense Industry. Market cap of $18.57B. SMA50 at $48.50 vs. SMA200 at $47.73 (current price at $51.51). MRQ revenue growth at 3.27% vs. MRQ inventory growth at 1.27%. Inventory, as a percentage of current assets, changed from 59.95% to 54.15% (comparing the 3 months ending 2009-12-31 vs. 3 months ending 2010-12-31). Short float at 1.73%, which implies a short ratio of 2.07 days. The stock has lost -5.10% over the last year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Momentum Ideas: Breakout Stocks With Improving Inventory Turnover