It certainly is a "stockpicker's market", as the pundits like to say, since the tried and true indexing and buy and hold methodologies have pummeled investors over the past year. It's therefore instructive to consider which stocks are making new highs naturally. By naturally, I mean, it's not an inverse ETF and it's not a buyout that was just announced. These are stocks that are rising in this insidious environment through organic growth, P/E expansion, "rumored" buyouts or otherwise...with more room to run.
AeroVironment, Inc. (NASDAQ:AVAV) - I had highlighted this one in August in a similar post on new highs and from there, it continues to run up 25% vs. a loss of 36% for the S&P. Some Highlights:
- Manufacturer of unmanned aircraft systems up on news that it has received a $4.6 million federal grant to develop a next-generation small unmanned aircraft system
- Also in the wind turbine business, which is trendy at the moment (albeit, wind shares off their recent rally highs)
- Financials looks nice; healthy year over year top and bottom line growth based on cursory review of income statement
- 1 Year Return - Up 74% vs. 39% Loss for S&P500
Brinks Home Security Holdings Inc. (CFL)
- This is one of those stocks that everyone looks back at and says, "Oh yeah, of course it should do well in a severe recession". Crime is up. Fear is up (the press loves to push negative and shocking stories of both financial ruin and personal danger and I question how much of the current economic sentiment could be attributed to the evening news). Amidst stories of home invasions and thievery, Americans are signing on to new security monitoring services rather rapidly.
- Brinks installs, services, and monitors security alarm systems for residential and commercial properties in North America.
- Its primary customers include residents of single-family homes.
- Note: Next Earnings call is this Wednesday Feb. 18
- The IPO occurred in the fall in a train wreck of an environment. Subsequently, the stock tanked, but YTD it's been quite strong. It's likely that institutional investors are starting to pick it up and with few other places to invest for growth, it may continue to run.
- YTD gain is 10% vs. a loss of 9% for the S&P500
American Italian Pasta Co. (AIPC) - Yes, I'm recommending you check out a pasta stock. With a doubling stock price since November, it's worth taking a look. Shoppers are going pasta in a big way and this is the biggest player out there. It's unlikely Americans are going to reverse course on a dime and dump pasta now that the fear is ingrained in the consumer's mind. High end eating out is dead and pasta is in.
- North American pasta play - also into organic
- Recent share jump on earnings beat.
- YTD up 39% vs. 9% loss for the S&P500
If you're looking for other contrarian plays and shelter from the storm, consider this list of 37 high-yield megacaps . Conversely, if you feel investors will tire of storing funds at no interest in Treasuries, consider Shorting Treasuries or diving into high yield muni bonds.