Our Take on Numbers

Written by GSCR Staff   
Friday, 06 September 2013 10:13

The US department of labor released the monthly job report for August this morning, and let’s just say that any signs of a boom economy are nowhere in sight. The labor participation rate is just shy of 63%, which is the worst since the summer of 1978 and the height of stagflation. However, all indications are that the market will trade up at the opening.

What’s going on? First of all, there cannot be any doubt that we are in a sideways or ultra slow growth economy. The decrease in the overall unemployment figure by 0.1% every month is due to the creation of lower paying and decreased benefits part-time jobs and a general trend of people leaving the job market, not by any real growth. Obamacare is not to blame for everything, but can certainly take a lot of the brunt for this phenomenon. With that said any ‘taper’ program from the Fed just keeps getting delayed, and unless a miracle occurs, somehow it is probable that the easy money policy will continue well into 2014 and the midterm elections.

So remain bullish and keep playing the trade on momentum and future financial outlook. For instance, our biggest Market Monitor winner, Lannett Company, Inc. (NYSE – LCI - $13.86) is up nearly 150% since we highlighted it in February. Keep buying if possible. The technical analysis looks very bullish on the 5-day, 20-day, and 50-day SMA. Additionally, the Company was in the black for 2Q13 from an EPS perspective, and is forecast to earn $0.40 a share this year and next. This simple equation continues to work like a charm.

Have a great weekend!

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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