Earnings surprises are rolling in regularly every day. And so far, we’ve picked stocks that simply couldn’t be kept down, no matter what the market did. In fact, our positions average gains in the double digits.
Before I give a quick rundown of all of our holdings, let me give you a heads up on what’s headed for your inbox in the next week.
First of all, I’m putting the finishing touches on our next monthly FastCap Strategist report.
It includes two picks that are poised to surge on the post earnings drift and have served us well.
The report will also include a full description of a brand-new strategy designed to accelerate our gains… sometimes by tenfold. Some of you are already familiar with the strategy, but I’m not going to give away anymore until the full report.
Sorry to tease, but I want to make sure everyone reads the upcoming issue.
Meanwhile, here’s where we stand with each of our holdings…
Cytec Industries (NYSE: CYT) – Current Gain: 26.0%
During the month of February, shares of Cytec were on an unstoppable rise. After a surprise on third-quarter earnings, we bought in. Cytec then went on to surprise again for fourth-quarter numbers… earning $0.70 per share instead of the expected $0.39!
Shares didn’t surge right away though, reflecting the slow “re-evaluation” of businesses that allows our system to profit.
Cytec also announced a huge $800 million project with Bombardier. Cytec will supply its composite materials to Bombardier’s CSeries and LearJet projects.
For now, keep enjoying the ride and tighten your sell stop to $36.50.
MSC Industrial Direct (NYSE: MSM) – Current Gain: 2.8%
We had a gain around 6% in MSC Direct before management came out with a “mixed outlook,” even though company guidance was still above that of the analysts. In the most recent earnings, the company proved it could do exactly what we needed it too… take market share.
Our prediction of MSC was that its strong financial position would allow it to outperform competitors, leading to new loyal customers. We were correct. As management says, “Our work through the downturn has set the stage for significant revenue and earnings growth over the long term as economic conditions normalize.” It’s these unappreciated changes that will surprise most investors over the long haul. That said, if MSC’s current rally starts to peter out, we may move on to another pick soon.
Power Integrations Inc. (Nasdaq: POWI) – Current Gain: 8.4%
Power Integrations came out on February 4 with record revenue – up 56% over last year… and in a recession, no less! The news led to a flurry of upgrades and the stock was off to the races.
Meanwhile, the expected “softness” in semiconductors has not touched Power Integrations’ niche – namely power management chips.
We’ll hold on longer for bigger things up the road.
Perrigo Co. (Nasdaq: PRGO) – Current Gain: 25.8%
After a very slow start, this Israeli generic pharmaceutical manufacturer became one of our best performers.
It’s not hard to see why. Since my recommendation, Perrigo has issued another earning surprise, the dismissal of a lawsuit, new product approvals, analyst upgrades and a doubling of profits.
On top of that, Israeli stocks are on a tear.
While the stock can’t rise like this forever, Perrigo isn’t finished yet. Raise your sell stop to $42.
Lindsay Corp. (NYSE: LNN) – Current Gain: -5.8%
Our sole loser at this point, Lindsay’s benefits from infrastructure and agriculture spending were always meant to be more long term. Still, Linsday announced a quarterly dividend and was named a “Top Pick” by analyst Paul Mammola. He says, “I think looking out, given that strong contango curve in corn and soybeans, you could see those guys start to come back. And it continues to convert international farmers, where the technology is less than 5% penetrated.”
Lindsay’s share prices have shown regular ebb and flow since last May. And in the next monthly issue we’re going to use that new strategy to earn extra profits.
The Shaw Group (NYSE: SHAW) – Current Gain: 15.2%
Shaw is a new pick… but when Obama came out in favor of nuclear power and guaranteed $8.3 billion in loans to Southern Company it sent Shaw’s shares soaring. Why?
Shaw is a major contractor of the power plants that Southern Co. is building. In fact, since Obama’s announcement, Shaw’s performance has outpaced Southern Co. by threefold!
Raise your sell stop to $30.
SVB Financial Group (Nasdaq: SIVB) – Current Gain: 5.5%
SVB Financial Group is such a new pick that there’s not much news to report… except that the classic post-earnings drift has already tacked on 5%. Raise your sell stop to $37.
Ahead of the tape,
Matthew Weinschenk