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Thursday, June 23, 2011

Seven Profitable, Dividend-paying Bollinger Band Breakouts

We've been presenting our Bollinger Band Breakouts at Alert HQ for quite a while now. What's nice is being able to use the stock screeners at our sister site TradingStockAlerts.com to refine the selection.

Accordingly, I started with bullish Bollinger Band Breakouts (those whose price exceeded the upper Bollinger Band) and selected those stocks that were profitable and offered a dividend. The following seven stocks popped out.

Symbol Name Last Price Sector Industry
AVD American Vanguard Corporation $13.38 Basic Industries Agricultural Chemicals
FUL H. B. Fuller Company $23.64 Basic Industries Home Furnishings
MLHR Herman Miller, Inc. $26.75 Consumer Durables Office Equipment/Supplies/Services
NYMT New York Mortgage Trust, Inc. $7.82 Consumer Services Real Estate Investment Trusts
RBN Robbins & Myers, Inc. $49.03 Capital Goods Fluid Controls
WAC Walter Investment Management Corp. $19.95 Consumer Services Real Estate Investment Trusts
WSCI WSI Industries Inc. $5.70 Technology Industrial Machinery/Components

These stocks range from micro-caps to small caps. All have charts that show bullish moves upward within the last couple of days.

For those of you who are interested in the dividend aspect, there are two real standouts on this list. First, we have New York Mortgage Trust, Inc. (NYMT) with a generous yield of 12.8%. The second is Walter Investment Management Corp. (WAC) which offers a yield of 11.1%. Note that both of these are Real Estate Investment Trusts.

Neither is without risk. For example, this is the description of Walter Investment Management: "Walter Investment Management Corp. is an asset manager, mortgage servicer and mortgage portfolio owner specializing in non-conforming, less-than-prime, and other credit-challenged mortgage assets." What is giving WAC a boost is that the company was able to successfully float a new securitization of residential mortgages, building and installment sale contracts, promissory notes, related mortgages and other security agreements. The proceeds will be used to compete an acquisition.

As for New York Mortgage Trust, Inc., there have been a number of bloggers and analysts highlighting the stock and its substantial dividend.

One more stock I'd like to highlight is Robbins & Myers, Inc. (RBN). This stock has an extreme chart. The big jump appears to be due to an enthusiastic analyst upgrade. R.W. Baird raised its price target on Robbins & Myers following solid Q3 results citing better than expected demand, strong execution, and raised guidance. The company is an illustration of the resurgence in U.S. manufacturing. They provide fluid management systems for energy, waste water processing and related industries and packaging solutions for pharmaceutical, food and cosmetic industries. Not as sexy as an iPad but profitability can come from some unlikely sources.

One thing I'd like to mention before closing. There is a saying among investors: "don't buy the breakout". Some of these stocks appear to be breaking out sharply. As such, you may want to be patient. Keep an eye on them and see what happens next. There may be a better entry price in the offing.

Disclosure: no positions in any stocks mentioned in this article

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