FTI Consulting: Good Hedge Against Troubled Financials

I have recently been adding financial stocks to my portfolio, but as a hedge I also have a modest position in FTI Consulting Inc (FCN). I first learned about this stock a few months ago from Gary Smith who is an e-mail buddy. Gary likes to scale into strong stocks making new highs and FCN has been a real winner for him.

FCN is a leading consulting firm that specializes in financial restructuring, litigation support/reputational issues, and engineering/science investigations. One of FCN's experts was recently interviewed on 60 Minutes about credit card fraud.

FCN will benefit greatly from increased bankruptcies and securities litigation. It is a good hedge against positions in big banks, brokers and insurers.

The company stock is not a cheap and has a PE ratio above 30. But it has very strong revenue and income growth, expanding margins and a positive outlook. FCN also uses a "rollup" strategy with strategic acquisitions.

I like to buy stocks like FCN on short-term price pullbacks. The 50-day moving average is around 57.70, so I may add to my position on a pullback to 58 or so.

Full Disclosure: I am long FCN.