4 Exceptional Stocks Defying the Downturn

Is this the right time to invest in stocks? Well, it depends on who you listen to and what the psychological make-up of the investor in you is.

Contrarian investors believe in buying low—if that’s your make-up, then you’ll be all over the stock market right now. However, in doing so, you are betting on the economy following a cyclical pattern.

I’m one such investor. There are always rules that govern the dynamics of society; even chaos has order. If that’s the case. then shouldn’t all stocks go down or grow conservatively when the market’s down? Shouldn’t events that create pandemonium and panic such as the current energy crisis and politics govern all sectors of stock markets as well? Shouldn’t small caps be down when investors are shying away from well-established and proven blue-chips with guaranteed revenue streams?

There are always rules and there are some exceptions. Here’s my list of exceptional stocks that defy the rules and are beating the downturn in Wall Street. They are:

1. Advance Battery Technology (ABAT)
2. AZZ Incorporated (AZZ)
3. Comstock resources (CRK)
4. Somanetics Corporation (SMTS)

I like these companies for the following reasons:

• 3-year Revenue Growth Rate   >   20 %
• Return On Equity   > 10 %
• YTD Return   >  Sector average
• 1-year Return  >  S&P 500
• 5-year Return   >   Sector average
• 1-month Return  >   20 %
• 3-month Return   >   20 %

Their fantastic performance numbers in recent times (and especially in the past year) below shows why they are worth a deeper analysis. Their numbers over 5 years indicate there’s not much to worry about either.

Click to enlarge

I’ll cover them more comprehensively and share my analysis with you in the next few posts. More later!

Comments

[NOWHEREMAN:]

Where were you when ABAT was trading below a $1?

They had the same technology, revenues were rising by a couple of hundred percent, They were winning one Chinese award after another. Contracted to provide Batteries for 3000 all electric cars for the Olympics and now you discover it.

Good, keep up the good work. I need a move above $10 to unload most of my shares for a 300% gain on the overall while retaining a couple of hundred.

Meanwhile, instead of just putting together parameters for a screen and showing the results, a brief description of what they do and what has made these your choices is really in order.

2008 Jul 14 04:00 AM

[Stockerati:]

Good for you. You should share your findings with the community more often. Time you gave something back to us, hey who doesn't like a 300% profit. BTW, did you also discover the other 3 stocks really early?

If you had paid attention to the last part of this article, you wouldn't be complaining about the lack of numbers. BTW, my analysis of ABAT also got posted on SA earlier today. Seems like celebrations are in order!

2008 Jul 14 10:04 AM

[Peter W:]

So you ran a screener which anyone could run and now you have four ideas that have outperformed looking back. Two ideas which are essentially trading at their all-time highs. Simply b/c these companies have outperformed in the past means nothing. Paultaut was right, you need to be looking forward rather than running basic screens.
No one should be celebrating you pointing out stocks that have likely already made their run.

2008 Jul 14 12:08 PM

[NOWHEREMAN:]

Aaw, come on, This lithium Nanotech at work, have a little respect. They have great promise but expect them to go looking for money after a runup. They will need money to expand.

I loved this little Puppy, sold half at 2.12, got all my money out but got greedy. So when it approached $10, I stuck with it. Now that its a little long in the tooth and no longer a puppy, I'm waiting for the Earnings comparisons to blow eveyone away in the short term.

2008 Jul 14 01:11 PM

[Stockerati:]

Peter, I was beginning to miss your delightful commentary. Thanks for your support :)

The fact that you read all my articles (despite always claiming they are not useful to you) all the time, is fantastic to see.

FWIW, if you'd understood the article you won't be asking this question. Maybe, a second read?

2008 Jul 14 01:14 PM

[Stockerati:]

Paul's assessment is quite in line with mine and I was surprised by their super-low D/E ratio-- definitely can be higher.

Use your own judgement to decide though.

2008 Jul 14 01:18 PM

[richrdinbel...:]

Some say this investment is too profitable to fall in price ... Yet the lollipop hanging man candlestick and rising price on falling volume in the weekly chart of this small cap US based industrial electrical equipment manufacturer relates its all over.

2008 Jul 16 10:00 PM