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Monday, January 19, 2009

TradeRadar SuperList - the best of our weekly picks for Jan 16, 2009

This post looks at the results of combining two stock screens that we ran this weekend at TradeRadar.

We executed the usual weekend Alert HQ process (read about this weeks results) and generated several lists of stocks based on our special screens including: Bollinger Band Breakouts, Trend Leaders and Cash Flow Kings (you can download these lists at the Trend Leaders page).

Trend Leaders represents a collection of stocks in strong up-trends. These stocks are registering strong signals using Aroon analysis, DMI and MACD. They are also above their 50-day exponential moving average. To obtain the list of Cash Flow Kings we calculate the free cash flow yield of all the stocks we scan and pick the ones whose yield is 50% or greater.

All these screens generate big lists since we run them against essentially the entire stock market. It occurred to me that combining the Trend Leaders and the Cash Flow Kings might provide an interesting outcome.

So what did we get when we combined these two scans? A bunch of little-known small caps and one mid-cap that you might not have expected. The list is as follows:

SymbolNameExchangeLast PriceMarket Cap
FNSCFirst National BankNGM3.1519.8M
ICTGICT Group, Inc.NGM6.2599.5M
LCAPALiberty Media Corp NewNasdaqNM5.48610.8M
LIONFidelity SouthernNasdaqNM4.0538.5M
PULBPulaski FinancialNasdaqNM7.5276.8M
SUAISpecialty UnderwritersNGM3.5755.6M
ZRBAZareba Systems, IncNCM2.74996.8M

With oil prices in decline again I was surprised to see Tesoro (TSO) on the list but then I read that the company provided upbeat guidance with its most recent quarterly results. In addition, the refining business seems to be doing better as its most important raw material - oil - drops in price. Tesoro, whose primary business is refining, is therefore benefiting from the rout in the oil market.

Another surprise is that four entries are in the financial sector. First National Bank (FNSC), Fidelity Southern (LION) and Pulaski Financial (PULB) are small-cap regional banks. The latter two are participating in the TARP program but are pretty small potatoes compared to the money-center banks. All three have seen share appreciation as investors are apparently considering them to be a lot less risky than most other financial institutions. Specialty Underwriters Alliance (SUAI) is an insurance company and their most recent quarter was nothing to brag about but the shares have been advancing relentlessly. As financials, the price-to-book ratio may be more important than cash flow. This measure is also pretty attractive for all four of these stocks.

Another interesting candidate is Liberty Media Corp. Capital Group (LCAPA). This is one of the segments of John Malone's conglomeration of companies and stock holdings. Did you ever want to own a baseball team? Here's your chance. This company owns the Atlanta Braves as well as a couple of television stations, a unit that provides location-based services to mobile phone users (E-911, for example) and various other niche businesses.

There are a few more companies on the list that I won't go into at this time. If you'd like to download the entire list with added fundamental data you can use this link. There could be a few stocks here that you will want to add to your watch list.

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