These six stocks have positive catalysts for future growth, profit margins of greater than 45%, latest quarter positive EPS % change, prices of greater than $15, average daily volume of greater than 400,000 shares, and are within 30% of their 52-week highs. These are bullish indicators regarding a stock's possible future performance. A robust profit margin is a trait of notable name. A profit margin of approximately 50% implies the company is generating 50 cents of profit for each dollar of sales. Moreover, most of these stocks are trading well below consensus analysts’ estimates, several have recent upgrades and positive analyst comments and pay dividends.
Nonetheless, this is only the first step in finding winners for your portfolio. Now that we have cut the wheat from the chaff, let's take a closer look to distinguish the driving factors behind these remarkable statistics and ensure the stories are intact.
Below is a table with detailed statistics regarding each company’s current profit and earnings information followed by a brief review of each company, a summary of current analysts' estimates and up/downgrade activity followed by a chart of the company's key statistics.
MasterCard Incorporated (MA) - Together with its subsidiaries, provides transaction processing and related services to customers principally in support of their credit, deposit access, electronic cash and automated teller machine payment card programs, and travelers check programs. Its payment solutions include payment programs, marketing, product development, technology, processing, and consulting and information services.
Indigo Books & Music Inc, Canada’s largest book retailer, recently announced a partnership with MasterCard (MA) Canada to roll out the acceptance of MasterCard PayPass contactless payment technology to all store locations across the country.
The company is trading significantly below analysts' estimates. MA has a median price target of $321.50 by 26 brokers and a high target of $382. The last up/downgrade activity was on Apr 16, 2010, when FBR Capital initiated coverage on the company with an Outperform rating.
Iconix Brand Group, Inc. (ICON) - Operates as a brand management company that engages in licensing, marketing, and providing trend direction for a portfolio of owned consumer brands.
Iconix Brand recently announced the closing of its private offering of $300 million aggregate principal amount of 2.50% Convertible Senior Subordinated Notes due 2016 (the "notes"), including $25 million aggregate principal amount of notes issued in connection with the full exercise by the initial purchasers of the over-allotment option. The notes were sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act").
The company is trading below analysts' estimates. ICON has a median price target of $26.50 by 4 brokers and a high target of $27. The last up/downgrade activity was on Mar 22, 2011, when The Benchmark Company initiated coverage on the company with a Buy rating.
Questcor Pharmaceuticals, Inc. (QCOR) - A pharmaceutical company, provides prescription drugs for central nervous system and inflammatory disorders. Its primary drug is H.P. Acthar Gel (repository corticotropin injection), an injectable drug that is approved for the treatment of certain disorders with an inflammatory component, including the treatment of exacerbations associated with multiple sclerosis, infantile spasms, opsoclonus myoclonus syndrome, and nephrotic syndrome.
Questcor recently reported record first quarter net sales.
2011 First Quarter Highlights:
- Expanded Sales Force Drives Record 508 Paid Acthar Prescriptions for MS, up 120% from Year Ago Period and up 44% from Fourth Quarter 2010
- Initial Sales Efforts in Nephrotic Syndrome Deliver Encouraging Results
- Q1 Net Sales a Record $36.8 Million, up 40% from Prior Year Period
- Q1 GAAP Net Income Per Diluted Share $0.17
- Q1 non-GAAP Net Income Per Diluted Share $0.20
The company is trading significantly below analysts' estimates. QCOR has a median price target of $27 by 5 brokers and a high target of $30. The last up/downgrade activity was on Feb 19, 2009, when Maxim Group initiated coverage on the company with a Buy rating.
NetEase.com, Inc. (NTES) - An Internet technology company, engages in the development of applications, services, and other technologies for the Internet in China.
"For the first quarter, total revenues from online games increased by approximately 28% year-over-year, driven by higher revenue contributions from our self-developed games, namely Heroes of Tang Dynasty, Fantasy Westward Journey, Westward Journey Online II and Tianxia II, along with continued revenue growth from World of Warcraft®, a game licensed from Blizzard Entertainment.”
The company is trading significantly below analysts' estimates. NTES has a median price target of $54.35 by 18 brokers and a high target of $65. The last up/downgrade activity was on Feb 24, 2011, when Brean Murray upgraded the company from Hold to Buy.
El Paso Pipeline Partners, L.P. (EPB) - Engages in the ownership and operation of natural gas transportation pipelines and storage assets in the United States. See map below.
El Paso Pipeline Partners recently reported first quarter 2011 financial and operational results for the partnership.
2011 First Quarter Highlights:
- $0.57 earnings per common unit for first quarter 2011, an 8 percent increase from first quarter 2010
- $230 million adjusted EBITDA for the first quarter 2011, up 35 percent from first quarter 2010
- $152 million distributable cash flow for first quarter 2011, a 67 percent increase from first quarter 2010
- Completed acquisition of an additional 25 percent interest in Southern Natural Gas (SNG)
- Raised quarterly cash distributions to $0.46 per common unit for the first quarter 2011, a 21 percent increase from the first quarter of 2010
Jim Yardley, president and chief executive officer of El Paso Pipeline Partners stated,
"We started 2011 the same way we finished 2010 -- executing on our acquisition strategy and delivering significant growth in distributable cash flow. Our recent acquisition of additional interests in Southern Natural Gas provides unitholders with more exposure to one of the country's best positioned pipelines and increases an asset base that consistently delivers very stable cash flows. We have made excellent progress towards our targets for the year, and will remain focused on execution as we move forward."
The company is trading significantly below analysts' estimates. EPB has a median price target of $41 by 11 brokers and a high target of $45. The last up/downgrade activity was on Dec 30, 2010, when Wunderlich initiated coverage on the company with a Buy rating.
QUALCOMM Incorporated (QCOM) - Engages in the development, design, manufacture, and marketing of digital wireless telecommunications products and services.
Qualcomm Atheros Inc., the networking and connectivity subsidiary of Qualcomm Incorporated recently announced the AR4100, a first-of-its-kind, highly integrated Wi-Fi® system-in-package (SIP) for microcontroller (MCU) based design. The new module is based on Qualcomm Atheros’ industry-leading 802.11b/g/n single-stream Qualcomm Atheros Align® technology, enabling long range transmission while minimizing energy consumption. The product is initially aimed at customers implementing machine-to-machine (M2M) communications in the smart home/building/grid markets, also referred to as the “Internet of Things.”
The company is trading significantly below analysts' estimates. QCOM has a median price target of $67 by 36 brokers and a high target of $80. The last up/downgrade activity was on Apr 8, 2011, when MKM Partners upgraded the company from Neutral to Buy.
Disclaimer: Information was gathered from CNBC, Yahoo Finance and respective company websites. Based on the current market conditions I would suggest scaling in to any position to reduce risk. I believe all these stocks are currently undervalued and provide significant opportunities for long term investors.