Your Dream Stocks are on Sale - Investment Ideas
August 03 2011 - 8:00PM
Zacks
The sell off in stocks over the last week has been pretty brutal.
The averages have been taking it on the chin due to some less than
stellar economic data, with Q2 GDP coming in soft and weakness in
both manufacturing and services ISM. And when you throw in problems
with the debt ceiling and further weakness in the Euro zone,
bearish sentiment is running strong.
Fear Takes Over
That dynamic has been fueling the action on the
Street for the last few days, where even the best stocks in the
best sectors have been getting hammered as investors rotate out of
equities as an asset class and into more defensive areas. While its
true the move lower has been painful for anyone who owns stocks,
its also important to recognize that when the baby gets thrown out
with the bath water, tremendous opportunity is at hand. Or as
Warren Buffet says, "Be greedy when others are fearful."
So on that note, let's use the recent sell off as
an opportunity to look at some momentum high flyers that have
traded sharply lower. The biggest challenge investors have with
buying momentum stocks is buying the 52-week high. So this recent
pull back could be an opportunity to pick up a few high-beta names
while the market is dragging top momentum stocks lower.
4 Momentum High Flyers on Sale
Carbo Ceramics, Inc. (CRR) is a specialized
energy services and products company with a market cap of $3.15
billion. CRR has seen a sharp pullback in the recent sell off,
falling from $180 to $132. That has helped the valuation picture
for this Zacks #2 Rank stock. Beyond that, CRR has an average
earnings surprise of 15% over the last four quarters and a bullish
31% growth projection.
Lululemon, Inc. (LULU) hasn't pulled back as
much CRR, but its 16% decline presents a solid opportunity to pick
up shares at a discount to last week. LULU is a Zacks #1 Rank stock
with an industry rank of 55 out of 265. The company also has an
average earnings surprise of 23% over the last four quarters.
Huntsmen Corp (HUN) took a 31% beating today
after falling one penny short of the Zacks Consensus Estimate. That
has made this chemical maker and Zacks #2 Rank stock a huge value
play, trading at just 10X forward earnings that looks even better
when considering its bullish 22% growth projection.
Travelzoo, Inc. (TZOO) has been volatile for
the last few weeks, topping off above $100 before recently pulling
back to the $50 area. In the meantime, estimates are unchanged,
with the current year holding at $1.46 after falling from $1.63 and
the next-year estimate pegged at $2.05, a bullish 41% growth
projection.
So as you can see, it doesn't have to be all doom
and gloom. The recent sell off in stocks offers an opportunity for
those with long-term vision and the conviction to go against the
herd.
Michael Vodicka is the Momentum Stock Strategist
for Zacks.com. He is also the Editor in charge of the Zacks
Momentum Trader Service.
CARBO CERAMICS (CRR): Free Stock Analysis Report
HUNTSMAN CORP (HUN): Free Stock Analysis Report
LULULEMON ATHLT (LULU): Free Stock Analysis Report
TRAVELZOO INC (TZOO): Free Stock Analysis Report
Zacks Investment Research
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