A Possible 50% Grower Next Year |
Written by Rob Goldman |
As expected, stocks are surging higher due in part to low gas prices. However, the current rise cannot go on forever. We believe we have identified what could temporarily curtail stocks as well as when this will occur. Check out the latest Goldman Guide by clicking the link below to see and prepare for these catalysts. Looking for a NASDAQ stock trading at only 10x next year’s EPS despite a 50% EPS growth forecast, on top of huge profitability this year? Click the link below to view this well-known company that could jump 50% next year if these estimates hold true. STOCKS TO ROCK UNTIL THIS OCCURSWe are in the early innings of the time when investing is akin to shooting fish in a barrel, as evidenced by the strong market performance last week. One could expect that the trend (although not the magnitude) will continue for the next few weeks only to be potentially halted in its tracks by big picture economic figures. It’s funny. One of the primary drivers of the current market rise, lower oil prices, could also hurt us. How? Well. given the swift decline in oil prices and subsequent layoffs in the oil services industry here in the U.S., you need to be aware that we could see some concerning employment figures next month. For starters, the end of the holiday season usually is marked by a seasonal uptick in unemployment as the part-time workers hired in late 2014 have their jobs eliminated in January 2015. This is no surprise given its seasonality, although the market sometimes treats higher unemployment figures in January it as if this event has never happened before. The bigger wild card is the impact on unemployment due to the degree of current and pending layoffs by U.S. energy companies. While small business seems poised to truly higher again next year, offsetting a portion of these job eliminations, some of the fastest growing markets in the country (such as North Dakota and the Permian Basin) will experience unemployment for the first time in a few years and that could have a cascading effect on those regions’ economies. After all, an oil industry slowdown eventually will affect the consumer segment and other sectors in those regions as unemployment rises. Make no mistake—-lower prices are great for most of America, but not all of America and that could mean GDP growth is found elsewhere. This Stock Could Jump 50% in 2015For weeks we have banged the drum on consumer stocks, certain tech segments and the avoidance of energy companies. While there may be more money to be made abroad given the current U.S. stock valuations, there is one microcap financial services company that we believe will jump 50% in 2015, in conjunction with a 50% increase in EPS. The Company’s 3Q14 results were one of the best in recent memory and a favorable equity and investment market bodes well for its business segments in 2015. At present, the stock trades 15.8x the expected $0.30 in EPS in 2014, up from $0.05 last year, and trades roughly 10x the 2015 EPS projection of $0.46. At 15x next year’s EPS, COWN would reach a target price of early $7, which is an almost 50% gain from current levels. Since achieving a recent (but not 52-week) low of just under $4, the stock has been on fire and is just below its 52-week high, reached in March of 2014. In our view, COWN is primed to be a microcap under accumulation by opportunistic investors seeking an under the radar stock enjoying huge EPS growth. As an aside, it does not hurt that COWN is not in the consumer, tech, or health care space for those who already have a meaningful presence in those sectors. Happy New Year!
1498 Reisterstown Road, Suite 286 Baltimore Maryland 21208 Phone: 410.609.7100 Launched in May 2010, The Goldman Guide is a free weekly publication of Goldman Small Cap Research and is written by Founder Rob Goldman with contributions from the GSCR contributor team. This non-sponsored investment newsletter seeks to provide investors with market, economic, political and equity-specific insights via an action-oriented, straight to the point approach. No companies mentioned in this newsletter are current sponsored research clients of the Company or its parent, unless noted, With rare exceptions, all companies or investment ideas mentioned in this publication are publicly traded stocks listed either on the NYSE or the NASDAQ. Goldman Small Cap Research members and contributors' bios, certifications, and experience can be found on our website: www.goldmanresearch.com. Disclaimer This newsletter was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces non-sponsored and sponsored (paid) investment research. Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co. The Firm's non-sponsored research publications category, Select Research, reflects the Firm's internally generated stock ideas, along with economic, industry and market outlooks. In virtually all cases, stocks mentioned in Select Research offerings are listed on the NYSE or the NASDAQ. Publications in this category include the weekly newsletter The Goldman Guide, daily Market Monitor blogs, Special Reports, and premium products such as The 30-30 Report. Goldman Small Cap Research analysts are neither long nor short stocks mentioned in this newsletter. Opportunity Research reports, updates and Microcap Hot Topics articles reflect sponsored (paid) research but can also include non-sponsored micro cap research ideas that typically carry greater risks than those stocks covered in Select Research category. It is important to note that while we may track performance separately, we utilize many of the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company's individual disclosures for each engagement, which can be found in company-specific Opportunity Research reports, updates and articles. Goldman Small Cap Research has not been compensated for any content in this issue. All information contained in this newsletter and in our reports were provided by the companies mentioned via news releases, filings, and their websites or generated from our own due diligence. Economic, market data and charts are provided by a variety of sources and are cited upon publication. Stock performance data is derived from Yahoo! Finance. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, other firms, or other financial news outlets. Goldman Small Cap Research relied solely upon information provided by companies through filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report, update, article, blog, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed. This newsletter does not take into account the investment objectives, financial situation, or particular needs of any particular person. This newsletter does not provide all information material to an investor's decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with the FINRA or with any state securities regulatory authority. ALL INFORMATION IN THIS REPORT OR NEWSLETTER IS PROVIDED "AS IS" WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION. For more information, visit our Disclaimer: www.goldmanresearch.com. |