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  • Are These Rallying, Outperforming Space Stocks About To Take Off?

    Forty-five years ago this Sunday, the Apollo 11 lunar module landed on the moon with two of the most famous astronauts in US history. The mission was a success on two fronts: it achieved President John F. Kennedy's objective of putting a man on the moon, and it placed the US ahead of the Soviet Union in the space race.

    Today NASA is no longer sending astronauts to the moon, instead focusing its efforts on deep space exploration. Earlier this month, the agency signed a $2.8 billion contract with Boeing (NYSE:BA) for the development of the core stage of the Space Launch System (NYSE:SLS). The SLS, which will be most powerful rocket ever built, will transport cargo, including the Orion spacecraft, and crew to near-Earth asteroids and, eventually, Mars.

    The upcoming anniversary of the moon landing inspired us to look for investment opportunities amongst space stocks. We began by creating a universe of space stocks, which we pulled from NASA's list of its top 100 contractors in 2013 as well as press releases announcing contracts awarded this year. Then we screened that group for stocks that are rallying above their 20-day, 50-day, and 200-day moving averages (NYSE:SMA). This indicates that these stocks have strong upward momentum and may soon be taking off like a rocket.

    Next, we took a look at past performance and screened for stocks that have outperformed over the last quarter, with at least a 10% return. While past performance isn't indicative of future success, a solid performance in the previous quarter combined with the current momentum may lead to another strong quarter.

    1. Air Products & Chemicals Inc. (APD, Kapitall snapshot): Provides atmospheric gases, process and specialty gases, performance materials, equipment, and services worldwide. Market cap at $27.55B, most recent closing price at $129.80.

    The stock is rallying 0.86% above its 20-day SMA, 5.51% above its 50-day SMA, and 13.77% above its 200-day SMA.

    Performance over the last quarter at 13.19%.

    Air Products and Chemicals won a $10.5 million contract to provide liquid nitrogen and oxygen to NASA's research centers and space center in California, Ohio, and Alabama.

    2. General Dynamics Corp. (GD, Kapitall snapshot): Provides business aviation, combat vehicles, weapons systems and munitions, military and commercial shipbuilding, and communications and information technology products and services worldwide. Market cap at $40.22B, most recent closing price at $117.51.

    The stock is rallying 0.53% above its 20-day SMA, 1.11% above its 50-day SMA, and 15.62% above its 200-day SMA.

    Performance over the last quarter at 12.37%.

    General Dynamics was NASA's fourth top contractor in 2013 and has received $13.11 billion dollars from the agency.

    3. URS Corporation (URS, Kapitall snapshot): Provides engineering, construction, and technical services to public agencies and private sector clients worldwide. Market cap at $4.04B, most recent closing price at $58.56.

    The stock is rallying 20.34% above its 20-day SMA, 25.71% above its 50-day SMA, and 19.78% above its 200-day SMA.

    Performance over the last quarter at 24.78%.

    URS Corporation was NASA's seventeenth top contractor in 2013 and has received $3.16 billion dollars from the agency.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Business relationship disclosure: Kapitall is a team of analysts. This article was written by Mary-Lynn Cesar, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

    Tags: APD, BA, GD, SLS, SMA, URS, long-ideas
    Jul 18 9:47 PM | Link | Comment!
  • Funds Like These 3 Construction Stocks As Manufacturing Picks Up

    Industrial production rose about 0.2% this month, rounding out the strongest quarter in almost four years. Over the quarter, production at factories, utilities, and mines grew at an annualized rate of 5.5%, the highest since 2010.

    A lot of the growth has come from a resurgent auto sector. When families buy more cars, it drives up demand for aluminum, component parts, and factory equipment. The gain in automobile manufacturing output was its largest in eight years.

    The Institute for Supply Management's Factory index still signals expansion and is mostly unchanged near a five-month high.

    In the event that manufacturing continues to gain speed going into the rest of the year, we decided to screen industrial goods stocks.

    To do that, we started with a list of the entire industrial goods sector, and then built a list of stocks with a price-to-equity (P/E) ratio below 20, indicating that the stock isn't trading at a large premium.

    Next, we screened for stocks that had spikes in institutional buying from groups like pensions and hedge funds. Since the managers of these funds often have access to the best information, these spikes in purchasing are often seen as a catalyst for stock moves.

    1. MDC Holdings Inc. (MDC, Kapitall snapshot): Engages in homebuilding and financial services businesses in the United States. Market cap at $1.43B, most recent closing price at $29.23.

    Net institutional purchases in the current quarter at 3.9M shares, which represents about 11.29% of the company's float of 34.55M shares. Major holder: State Street Corporation at a 6.97% stake.

    P/E at 4.75.

    2. Meritage Homes Corporation (MTH, Kapitall snapshot): Engages in designing and building single-family attached and detached homes in the southern and western United States. Market cap at $1.64B, most recent closing price at $42.01.

    Net institutional purchases in the current quarter at 4.1M shares, which represents about 11.89% of the company's float of 34.49M shares. Major holder: BlackRock Fund Advisors at a 8.34% stake.

    P/E at 11.70.

    3. PGT, Inc. (PGTI, Kapitall snapshot): Engages in the manufacture and sale of windows and doors. Market cap at $387.76M, most recent closing price at $8.21.

    Net institutional purchases in the current quarter at 6.7M shares, which represents about 15.74% of the company's float of 42.57M shares. Major holder: Renaissance Technologies, LLC at a 5.91% stake.

    P/E at 16.53.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Business relationship disclosure: Kapitall is a team of analysts. This article was written by James Dennin, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

    Tags: MDC, long-ideas
    Jul 18 9:42 PM | Link | Comment!
  • Why Is Apple Buying Beats Headphones?

    Apple (AAPL) doesn't acquire a lot. It's got one of the biggest cash reserves in corporate America, which it frequently gets criticized for not spending. That changed this morning.

    Unlike Facebook (FB), which has a reputation for frequent and intriguing blockbuster acquisitions (like its purchase of Occulus Rift earlier this year), Apple's acquisition strategy is to target small companies that can easily be incorporated into the company.

    Apple's biggest acquisition of 2013 was an Israeli chipmaker called Primesense. Can't imagine how you could have missed that one.

    The Beats deal is worth at least $3 billion, and it seems to have to two major components. On one hand, Apple has always marketed itself as the hardware of choice for the affluent and stylish. It's no surprise they might want to bring the stylish, high-end headphones, which sell for as much as $400 for a single pair, in house.

    On the other hand, there is the content play: Beats subscription service would beef up Apple's music catalogue at a time when the individual downloads championed by the iTunes store are waning and subscription services likes Beats and Spotify appear to be on the rise.

    What do you think of the deal? Will Beats bring enough to the Apple team to be worth such a big departure from business as usual in Cupertino? Let us know what you think in the comments.

    1. Apple Inc. (AAPL, Earnings, Analysts, Financials): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Market cap at $472.72B, most recent closing price at $527.55.

    2. Amazon.com Inc. (AMZN, Earnings, Analysts, Financials): Operates as an online retailer in North America and internationally. Market cap at $161.82B, most recent closing price at $351.78.

    3. Pandora Media, Inc. (P, Earnings, Analysts, Financials): Operates as an Internet radio company in the United States. Market cap at $6.88B, most recent closing price at $37.26.

    (List compiled by James Dennin. Monthly returns sourced from Zacks Investment Research.)

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    © Kapitall, Inc. All rights reserved. Kapitall Wire is a division of Kapitall, Inc. Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.

    Kapitall Wire offers free cutting edge investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by Kapitall Inc., and its affiliate companies.

    Open a free account today get access to virtual cash portfolios, cutting-edge tools, stock market insights, and a live brokerage platform through our affiliated company, Kapitall Generation, LLC.

    Securities products and services are offered by Kapitall Generation, LLC - a FINRA/SIPC member.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: AAPL, AMZN, P
    May 12 5:04 PM | Link | Comment!
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