Basket of Buys for the Best Months

10/23/2015 9:00 am EST

Focus: STOCKS

Jeffrey Hirsch

Editor-in-Chief, The Stock Trader's Almanac and Almanac Investor

With the market now beginning its historically best six-month period, we’ve developed a list of stocks that all have reasonably solid valuations, explains seasoning timing strategist Jeffrey Hirsch, editor of Stock Trader’s Almanac.

These 16 stocks also show healthy revenue and earnings growth, while exhibiting positive price and volume action as well as other constructive technical and chart pattern indications.

The group covers a broad array of sectors and industries. It also runs the gamut of market capitalization with a mix of large-, mid-, and small-caps.

We first sifted through the universe of about 8,000 US-traded stocks for those with a market cap of at least $25 million and average daily volume of 50,000 shares or more on average over the past 20 trading sessions.

Then we winnowed the list down to only those stocks with relatively low price-to-sales and price-to-earnings ratios. From there we looked for stocks that were exhibiting revenue and earnings growth.

With this list of about 50 stocks we dug into each individual company and chart before settling on these final 16 stocks.

chart
Click to Enlarge

Our underlying theme was to find reasonably priced stocks quietly growing sales and earnings that are flying somewhat under the radar with few on the Street paying close attention to them.

As market cap goes higher, this becomes increasingly challenging and a history of earnings surprises becomes even more important. 

At the end of the screening process we found that homebuilders, medical, and financial industries were well represented in the basket.

We did not search specifically for top-performing stocks within these sectors, this just happens to be where reasonable value and solid growth currently exist.

This basket is being presented in order to take advantage of the best six months (November to April) for stocks. Volatility is still present and we will look to add these stocks on dips.

For each stock we have provided the ticker, name, sector, general business description, plus annual sales growth, PE, price-to-sales ratio, market value, a dividend yield, and a suggested buy limit and stop loss. 

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