As we head into the new week, it's time to look at a few of the stocks at the top of my "watch list." These four are very unique and do not have much in common, which is a good thing if you are searching for diversification.
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Energy Equipment and More
Newpark Resources (NYSE:NR) is an oil and gas equipment services company that operates in three divisions: fluid systems and engineering, integrated services, and environmental services. As the drilling for natural gas and oil increases in the U.S. and the environmentalists are cracking down on the energy industry, it appears NR could be well positioned for the future. Fundamentally, the stock trades with a forward P/E ratio of 9.78 and a PEG ratio of 1.17 - both attractive numbers. The stock hit a 10-year high earlier this month before pulling back around 10%, and back to the breakout level of $9.50. If NR can hold the $9 during the current pullback, this could be the time to begin building a position. (To learn more, read How To Interpret Technical Analysis Price Patterns.)
Shares of Brookfield Infrastructure Partners (NYSE:BIP) are pulling back after hitting a historic high last week. During the current losing streak the stock has been able to hold above the prior high near the $28 area. The company owns a basket of assets in the utilities, transport and energy, and timber sectors around the globe. The company's chart looks healthy, it's in a strong industry and it also pays around a 4.9% dividend. The fundamentals are not as attractive, but partnerships are often tough to compare with other stocks.
Problems Solving and Credit Cards
Exponent (Nasdaq:EXPO) is a problem solver; it offers 90 different technical disciplines to solve complicated issues facing the public and private sectors. Some services involve product recall, regulatory compliance and litigation. In this type of environment EXPO should be thriving. The stock hit an all-time high in October and has since pulled back and is consolidating. With support in the mid-$40s, EXPO could be setting up for a buying opportunity. Fundamentally, the stock is not overly attractive with a PEG ratio of about 1.90 and a forward P/E ratio of roughly 20.7; however, the nature of the business and the chart are enough for me to consider buying. (For more on technical indicators, read Peak-And-Trough Analysis.)
Visa (NYSE:V) is a brand name most people in the world recognize as a credit card company. This company also facilitates payments in a variety of different ways around the world. The stock recently pulled back from an all-time high and was able to find support at the 50-day moving average. The chart is one of the best in the market and fundamentally the stock trades with a PEG of approximately 0.9 and forward P/E ratio of around 14.8. The stock appears to be a fundamental and technical gem as long as the global economy does not crash. (For related reading, see Blending Technical And Fundamental Analysis.)
The Bottom Line
One of my biggest questions involves when to buy into a stock on the watch list. The answer is to set a level where you feel comfortable buying the stock, and when it enters that zone, hit the buy button. Unfortunately, many investors struggle to buy when a stock pulls back to support, as they would rather buy when it is hitting highs. The four stocks mentioned above are pulling back to support and that is why they were highlighted this week. (Also, check out Support & Resistance Basics.)
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At the time of writing, Matthew McCall did not own shares in any of the companies mentioned in this article.