Are you looking for some positive stocks in this uneasy market that are just getting ready to break out? Take a look at these two companies, they may be worth your time to research further.
American Vanguard Corp (AVD) develops, manufactures, and markets specialty chemical products for agricultural and commercial uses. The company manufactures and formulates chemicals for crops, human, and animal health protection.
Piper Jaffray believes that American Vanguard is poised for a strong Q4 following Q2 and Q3 results that may be weak due to seasonality. The firm reiterates an Overweight rating and $30 price target on share. One good piece of news for the company came in a government report that this year's corn crop is apt to be smaller than expected. If it is, that could lift prices for the grain, and fuel demand for products like fertilizer that will increase crop yield. The U.S. Department of Agriculture rated only 56% of the U.S. corn crop as good to excellent. That's down 7 percentage points from a week earlier and well below the 61% analysts estimated.
The stock has just broken out of the ascending triangle it was in and looks poised to continue to move up. For an income play, if you are interested in short term income as well as long term investing, I suggest a Bull Call Spread, but buy the first option (in the money).
The Options Play
- Buy the August 2012 call with a strike of '25.00' (priced at $3.60)
- Sell the August 2012 call with a strike of '30.00' (priced at $0.55)
- Net Debit to Start: $3.05
- Maximum Profit: $1.95
- Maximum Risk: Net debit
- Maximum Length of Play: 5 weeks
Reasoning behind Play
- Bought in the money to make sure the play was close.
- Stock is bullish with no signs of turning around.
- Bad corn crop should enhance the company's ability to make money.
Advent Software Inc (ADVS) provides software and services that automate work flows and data across investment management organizations, as well as the information flows between an investment management organization and external parties worldwide.
Here is a strong company that others recognize! It has been recognized as "Best Technology Provider" in the 2012 Citywealth Magazine Magic Circle Awards in London. The company has consistently invested approximately 17-18% of annual revenues in R&D, and is leading the industry in bringing cloud and mobility solutions to the investment management industry. Presently in a long ascending triangle, I expect the stock to eventually break above the 28 level and keep moving up. Presently it trades at 27.29 so it should be watched. Twice it recently touched the 28 level before pulling back. Upon breaking through on increased volume, it would make a good long term investment.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.