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Tickers in this Article: AZZ, APOL, HK, ANDE, RBN
Just as individual stocks can fall amidst a declining market by 10%, 20%, or even more, a few all-stars will rise to the surface to shine. The markets present us with these winning stocks every day. Taking a position in one of them may be risky, but it has also been said that the largest risks to your portfolio are the ones not taken.

Many investors and traders know the thrills and profit that can be had from investing in rallying stocks. These momentum traders know that by being able to separate great stock opportunities from a plethora of options, can lead to big profit. That being said, great losses can be had from picking the wrong stock to jump in on. (For related reading, check out Introduction To Trading: Momentum Traders.)

When looking at a company that has seen extraordinary gains, it is important to understand why the gains have occurred, so as to help protect us from the opportunities that, at first glance, look much better than they actually are.

Would you like some high quality stocks with bullish momentum in your portfolio? Here are five companies, whose stocks have produced large gains this week.

Bull Pen

One Week Gain*
Community Sentiment
AZZ Inc.
100% Bullish
Apollo Group
87% Bullish
Petrohawk Energy
97% Bullish
The Andersons
100% Bullish
Robbins & Myers
100% Bullish
*Data as of market close July 3, 2008

While these single-week gains certainly seem impressive, it is crucial to dig beneath the surface to see what has caused these extraordinary gains.

It seems that every week, I write about how oil has hit a record high. This week is no different, with oil closing above $145 for the first time ever on Thursday, causing prices at the pump to remain high as we go into the long weekend. Average gas prices across the country are now above $4 per gallon, (around $5 per gallon in Canada) and so the hunt for alternative fuels remains the focus for car manufacturers, consumers, and investors alike.

Agri-Business is Growing
No matter which side of the biofuels debate you are on, you can't argue that demand for ethanol is increasing. That, coupled with an increase in food demand due to an increasing global population, is driving agri-businesses such as The Andersons. (To learn more, see The Biofuels Debate Heats Up.)

Shares surged last week as the company's guidance was raised. Full-year 2008 estimates were increased to $4.40-4.80 per diluted share from the previous $3.65-$4.00 range. The company set a new record last year with earnings per share of $3.75. (Explore the controversies that surround companies commenting on their forward looking expectations in Can Earnings Guidance Accurately Predict The Future?)

Stock Picking Community
member cat4unt tells us in a recent stock pick that he is expecting The Andersons to continue to impress:

[With] the ever increasing price of gasoline, bio-fuels such as ethanol are poised for huge gains in the near future. I feel that its at a low and will soon be on a strong and hopefully very powerful upswing in response to the national average of gas exceeding .00 throughout all 50 states.

Another quite exciting fact on this story, is a grant recommendation The Andersons received. The company announced on Tuesday this week, that a team it is leading has been recommended for $5 million in grants from the Ohio Third Frontier Commission. The research will provide solutions for the economic, health, and environmental concerns plaguing the agricultural industry, specifically through the development and commercialization of advanced granules and other emerging technologies.

The Andersons is also benefiting from having its operations located in the Eastern corn belt. This is an area where flooding has been minimal. The company is also diversified across many areas of the agriculture business, including nutrients and fertilizer, transportation, and retail. This finger in the nutrients pie has been a huge benefit as fertilizer prices have been on the move this year with food demand increasing. With guidance on the rise, analysts such as Farha Aslam with Stephens are suggesting an 'overweight' rating with price target of $53 per share.

Add Your Two Cents
What do you think will happen with The Andersons going forward? Will the company's diversified business help it take advantage of the booming parts of this sector, while weathering the storms of others? Be sure to join me (aytonmm) in the FREE Stock Picking Community to share your thoughts and see what other investors are saying.

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