We’re Here to Pump...You Up!
|Written by GSCR Staff|
|Friday, 20 September 2013 06:50|
The SNL catch phrase headlines were not intended this week, but we will keep it going from the 2000's Wednesday, the 1990's yesterday, to the 1980's today. "Pumping Up with Hans and Franz" was a regular with Kevin Nealon and Dana Carvey late in the decade and was a steady go to skit for the show at the time. My favorite was when the real Arnold showed up.
The steady go to for market analysts and commentators for discussion is the eventual Fed 'taper', which will end the “pump up” of the market in many experts’ opinions. The meeting Wednesday was status quo, as the minutes stated the Fed would continue the massive bond buying program which should keep the bull market going.
OK, if you are like me these stories are becoming like an overdone SNL skit, which even “Pumping Up with Hans and Franz” became eventually. Having said that, two-thirds into the month of September the Russell 2000 is up over 5% for the month, which is bucking the recent trend of September sell-offs. So until Uncle Ben does anything different, don’t be a “girlie man”, keep on riding the highs.
Check this one out, from our previous Market Monitor picks that has great momentum/accumulation, very bullish technical analysis, and a strong valuation based on future earnings. This is the winning formula right now.
Harmonic, Inc. (NASDAQ – HILT - $7.68) +32%
It was a slow, steady climb for the media technology firm from our first spotlight in mid March. About the end of June the stock entered an accumulation phase and is up nearly 25% from the $6.25 levels at that time, trading over 750,000 shares per session on average. The 5-day, 20-day, and 50-day all are very bullish when analyzing the charts. The forward P/E is under 24, which is decent. However, earnings per share are forecast to jump over 80% from 2013 to 2014, going from $0.18 to $0.33. All three components of the equation are intact, does it make sense? Just at quick glance, the Company has had tremendous deal flow over the past several months, no doubt one of the big reasons the stock has jumped. We think the momentum continues to the $9.00 level be November 1.
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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