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

One helpful momentum indicator is the “golden cross,” in which the 50-day moving average crosses above the 200-day moving average. When this occurs, it indicates that there is recent upside momentum that may persist.

We searched for stocks with high five-year net income growth for those exhibiting this bullish momentum indicator. We narrowed this universe to those trading at steep discounts to mean analyst target price, possibly indicating undervalued opportunities. Finally, we took into account market sentiment by finding those that had bullish changes in the put/call ratio over the last two weeks.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

List sorted by potential upside implied by target price.

1. Materion Corporation (MTRN): Industrial Metals & Minerals Industry. Market cap of $700.68M. SMA50 at $37.74 vs. SMA200 at $36.10 (current price at $34.33). Target price at $46.75 (implies a potential upside of 36.18% from the current price). 5-year net income growth rate at 21.10%. Put/call ratio decreased 45.95% over the last 10 trading days (from 0.74 to 0.4). This is a risky stock that is significantly more volatile than the overall market (beta = 2.03). The stock has gained 57.91% over the last year.

2. Interactive Intelligence, Inc. (ININ):
Business Software & Services Industry. Market cap of $633.56M. SMA50 at $35.15 vs. SMA200 at $30.53 (current price at $33.88). Target price at $44.88 (implies a potential upside of 32.45% from the current price). 5-year net income growth rate at 47.87%. Put/call ratio decreased 38.24% over the last 10 trading days (from 0.34 to 0.21). The stock has had a couple of great days, gaining 7.9% over the last week.

3. Team Inc. (TISI):
Business Services Industry. Market cap of $437.95M. SMA50 at $23.24 vs. SMA200 at $22.89 (current price at $22.39). Target price at $29.60 (implies a potential upside of 32.20% from the current price). 5-year net income growth rate at 23.43%. Put/call ratio decreased 89.55% over the last 10 trading days (from 0.67 to 0.07). The stock has gained 66.47% over the last year.

4. Harris Corp. (HRS): Communication Equipment Industry. Market cap of $5.60B. SMA50 at $48.36 vs. SMA200 at $46.87 (current price at $44.03). Target price at $57.97 (implies a potential upside of 31.65% from the current price). 5-year net income growth rate at 22.41%. Put/call ratio decreased 16.13% over the last 10 trading days (from 0.31 to 0.26). The stock is a short squeeze candidate, with a short float at 9.23% (equivalent to 10.88 days of average volume). The stock has gained 0.5% over the last year.

5. RPC Inc. (RES): Oil & Gas Equipment & Services Industry. Market cap of $3.34B. SMA50 at $23.88 vs. SMA200 at $19.55 (current price at $22.54). Target price at $29.64 (implies a potential upside of 31.50% from the current price). 5-year net income growth rate at 17.16%. Put/call ratio decreased 37.78% over the last 10 trading days (from 0.45 to 0.28). The stock is a short squeeze candidate, with a short float at 21.61% (equivalent to 5.81 days of average volume). The stock has gained 139.79% over the last year.

6. NYSE Euronext, Inc. (NYX): Diversified Investments Industry. Market cap of $8.35B. SMA50 at $36.83 vs. SMA200 at $33.25 (current price at $31.87). Target price at $41.44 (implies a potential upside of 30.02% from the current price). 5-year net income growth rate at 69.70%. Put/call ratio decreased 56.94% over the last 10 trading days (from 0.72 to 0.31). The stock has gained 14.97% over the last year.

7. PolyOne Corporation (POL): Synthetics Industry. Market cap of $1.37B. SMA50 at $14.25 vs. SMA200 at $13.38 (current price at $14.67). Target price at $18.67 (implies a potential upside of 27.24% from the current price). 5-year net income growth rate at 20.80%. Put/call ratio decreased 48.28% over the last 10 trading days (from 0.29 to 0.15). This is a risky stock that is significantly more volatile than the overall market (beta = 2.51). The stock has gained 61.74% over the last year.

8. 3D Systems Corporation (DDD): Application Software Industry. Market cap of $938.43M. SMA50 at $19.89 vs. SMA200 at $16.78 (current price at $18.72). Target price at $23.75 (implies a potential upside of 26.87% from the current price). 5-year net income growth rate at 20.42%. Put/call ratio decreased 24.74% over the last 10 trading days (from 0.97 to 0.73). The stock is a short squeeze candidate, with a short float at 87.23% (equivalent to 8.45 days of average volume). The stock has had a couple of great days, gaining 5.35% over the last week.

9. Nasdaq OMX Group Inc. (NDAQ): Diversified Investments Industry. Market cap of $4.13B. SMA50 at $25.63 vs. SMA200 at $24.16 (current price at $23.39). Target price at $29.42 (implies a potential upside of 25.78% from the current price). 5-year net income growth rate at 48.21%. Put/call ratio decreased 42.86% over the last 10 trading days (from 1.12 to 0.64). The stock has gained 23.82% over the last year.

10. Snap-on Inc. (SNA): Small Tools & Accessories Industry. Market cap of $3.50B. SMA50 at $59.45 vs. SMA200 at $55.74 (current price at $60.06). Target price at $75.13 (implies a potential upside of 25.08% from the current price). 5-year net income growth rate at 16.16%. Put/call ratio decreased 43.66% over the last 10 trading days (from 1.42 to 0.8). The stock has gained 45.99% over the last year.

Options data sourced from Schaeffer's, price and net income data sourced from Screener.co, all other data sourced from Finviz.

Source: 10 Undervalued Momentum Plays With High Earnings Growth and Bullish Options