Get Back on the DOLE
|Written by GSCR Staff|
|Tuesday, 15 October 2013 07:08|
In Monday’s Goldman Guide we discussed playing your favorite names. While the small cap universe is somewhat void of household names when it comes to stocks and companies, there are still some famous or infamous names in the space if you follow it regularly. Additionally, we mentioned that now is the time to start thinking about the Holiday season plays.
Dole Food Company, Inc. (NYSE – DOLE - $13.66) is great combination of the Guide parameters mentioned above.
What do people do more of during the time between Thanksgiving and New Year’s? The answer is obvious, they eat! Dole is a household name that grows, processes, and distributes fruits and vegetables in both raw and specialty package forms through its two segments Fresh Fruit and Fresh Vegetables. I can see the pineapple in the punch bowl now!
DOLE looks great from our three-tiered recipe for success given current market conditions right now. The 5 to 50 day DMA technical analysis is very bullish. Additionally, the stock has had over a 6% bounce on huge volume of nearly 1.3 million shares traded per day in the current accumulation phase. Plus, the FY P/E is under 19 as EPS is forecast to get back into the black this year and increase nearly 40% in 2014.
Finally, in Monday’s Guide our third point of emphasis was to be aware of a trigger event. Back in June it was announced that Dole was an acquisition target and the stock catapulted from $9.27 to $12.46 over 4 trading sessions. The deal has been relegated to the back burner while the lawyers take a look at it, but this could be a huge catalytic event if and when the deal is finally approved.
DOLE is poised for a nice bump over the next month or so. A 20% return in the near term is not out of the question.
Have a great day!
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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