I regularly post a "Stocks I'm Watching This Week" article. Two weeks ago I featured
21 stocks including MDF and TGI, which both finished down for the week. Last week, amid a market sell-off only 3 instruments made the list
- Caribou (CBOU
) and 2 ETFs, FXF
(Swiss Franc Trust) and TFI
(SPDR Nuveen Barclays Capital Muni Bond). This week we have only two stocks on the list, First Cash Financial Services (FCFS
) and Mistras Group (MG
). The criteria for a stock making the list is for it to finish on Friday at a 52-week high on 2x average volume, a minimum 50k share average volume, and finish the day higher than it opened.
Given that Caribou exhibited so much strength on August 5th, I added it to my watch list last week. CBOU finished the week up 10.14% while SPY finished the week down 1.63%. Stocks that can withstand a strong market sell-off are ones to watch for they could exhibit even further strength if we get a bounce in the overall market. Caribou announced earnings August 3rd and increased guidance for 2011, expecting sales growth of 11-13% and diluted EPS between $.39 and $.41.
First Cash Financial Services (FCFS
) had a strong week--despite the market sell-off--on no official news. The company operates retail-based pawn and consumer finance shops in the United States and Mexico. The company has a forward P/E of 17.46 and a price-to-earnings-growth (PEG) of 1.23. The company has a strong balance sheet with no long-term debt and a quick ratio of 4.57.
It could be a play on a deteriorating US economy and struggling consumer. Cash strapped consumers and individuals may seek the services of pawn shops during periods of uncertainty, which may explain in part why it had a strong week this past week while the rest of the market struggled. (Daily chart courtesy of Finviz)
Mistras Group (MG) was a new name to me this week. MG provides technology-enabled asset protection solutions to evaluate the structural integrity of critical energy, industrial, and public infrastructure worldwide. It announced earnings August 9th. Revenue for the fourth quarter of fiscal 2011 was $102.1 million, an increase of 28% over 2010's fourth quarter. Net income for the quarter was $.25 versus $.20 in 2010, an increase of 27%.
The company provided guidance for 2012 of double digit growth in revenue and Adjusted EBITDA. It projected revenue between $375 - $390 million and Adjusted EBITDA of $59 - $64 million. Revenue for 2011 was $338.6 million and 2011 Adjusted EBITDA was $52.3 million. The company has a debt/equity ratio of .22 and a quick ratio of 1.92.
I am also watching PriceSmart (PSMT
) but no longer hold a position in it after being stopped out last week. It has exhibited fairly good resiliency and it announced a week ago that its July revenues increased 21% versus last year. The stock has been in a range between $55 and $61 since earnings in early July. The exception was when it touched its 50 day moving average last week during one of the market's sell-offs:
Disclaimer: No current positions in stocks mentioned. Please note that Scott's Investments is not a financial adviser. Please consult your own investment adviser and do your own due diligence before making any investment decisions. Please read the full disclaimer at the bottom of Scott's Investments.