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Overview
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Xoom (XOOM)
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5 Stocks to Double
Overview
Thank you for your interest in Zacks and the Stocks to Double report. This report
will give you an idea of the enormous resources available on Zacks.com. I invite
you to visit the site and get familiar with the Zacks Rank, our stock picking framework that has an impressive track record of generating market-beating returns
year after year.
Each of the 5 stocks in this report was hand-picked by one of our stock strategists,
who explain their rationale in the included stock write-ups. Clearly, this report was
not written for the risk-adverse or conservative investor. Rather, these stocks are
for the aggressive investor looking to add home-run potential to his or her portfolio. It would be prudent to devote no more than a small portion of your overall
portfolio to these stocks.
That said, we hardly threw darts at a board to arrive at these choices. All of the
stocks have catalysts that we think could fuel strong gains over the coming year.
We sifted through stocks that met Zacks Rank criteria and then chose the crme
de la crme. Each of the five stocks has unique qualities that make it a candidate
for this report. And they are all from different sectors, offering a level of diversification even in this small sample.
Most of the stocks in this report are currently flying under the radar of most Wall
Street analysts and traders, which provides a good opportunity to get in on the
ground floor. The market is littered with these kinds of stocks, but only the ones
with positive catalysts on the horizon burst onto the scene with monstrous gains.
We made sure that we could identify specific factors that would bring these stocks
out from obscurity and onto the lists of top performing stocks.
We are confident that you can realize enormous gains with these 5 stocks. Leave
the singles and doubles for other portfolios; we are swinging for the fences on
this one!
Best regards,
Sheraz Mian
5 Stocks to Double
5 Stocks to Double
Not resting on its heels, Callon has been aggressive in its acquisition activities as
well. Since late 2012, the company established two new core development fields
in the Southern Midland Basin and follow-on transactions near core fields have
added value and helped to leverage its operational footprint. In total, Callon has
added 5,745 net acres of land in Reagan and Upton counties.
5 Stocks to Double
From a technical perspective, Callon stock has been on a sustained run since late
June 2013 when the stock was trading just above $3 per share. The first push took
the stock to $7.50 before finding resistance and selling off. The sell-off had CPE
hovering near $6 and locked in a range below $7 for the better part of four months.
In March CPE broke above $7 and hasnt been back below it since. The last three
months the stock has traded above its 25 day moving average shifted by 5 days
(25x5). The 25x5 has a positive slope indicating a bullish trend for the stock. This
provides support for the bottom end down near the $9 level.
In addition to a bullish trend and 25x5, the stochastic indicator flashed a buy in
mid-May as CPE bounced from $9. Since then its moved to slightly overbought
territory but have yet to reach any sort of overbought extreme.
Should a pullback occur, you can use the June low and the recent high as a point of
reference for retracement. The first level down would give $9.03 as a support level.
This coincides with price levels that were areas of resistance during CPEs meteoric
rise to the top.
Using the power of the Zacks Rank and adding a bit of technical analysis can help
you find the best of the best to invest in. Callon Petroleum has all the ingredients
you need for a stock to double over the course of the next year. Remember to
keep your risk parameters in check. Let the winners run and cut your losses short.
5 Stocks to Double
5 Stocks to Double
The company reported closure of a large deal with a leading CPG client during the
quarter. During the conference call Genpact announced the acquisition of
Pharmalink Consulting, which would add domain capabilities in the regulatory
affairs space of targeted Life Sciences vertical. The company also reported a strategic partnership with Oliver Wyman to build and market risk solutions for
Financial services industry.
5 Stocks to Double
The chart above shows the recent positive earnings momentum for the company.
Attractive Valuation
The company is trading at 16.6x 12 month earnings currently versus 17.5x for the
industry. On the other hand, it has a higher EPS growth estimate (5 year)14%
versus 13% for the industry. At these levels, the shares look well poised to move
higher.
5 Stocks to Double
Why UPL?
You probably havent heard of Ultra Petroleum as it is often overshadowed by the
much larger companies in the space. However, this exploration company, with a
market cap of about $4.2 billion, is a pretty dynamic Texas-based firm that has
operations across the country including ones in Wyoming and Pennsylvania.
The current focus of UPL is on its natural gas business, as this accounts for roughly
75% of its revenues, compared to roughly 25% for oil sales. And though natural gas prices have been extremely volatileto say the leastthey have been on
an upswing overall as of late thanks to huge demand in the American market for
heating to start the year, and now cooling demand for the summer.
Fortunately, UPL has a low cost structure, so even subdued natural gas prices do
not hamper this company and their outlook. In fact, during 2013, the firm reported
all-in operating costs of $2.86 per thousand cubic feet equivalent, one of the best
in its peer group and one of the key reasons why UPL was able to deliver an impressive 28% net income margin for the time frame.
5 Stocks to Double
This natural gas business is expected to be a huge driver as the Wyoming field
remains largely untapped and natural gas demand seems likely to remain high,
and it could remain in an elevated position if we have a hot summer or if there is
a bad hurricane season. However, UPL isnt relying on that to power growth alone
as the company recently made an interesting acquisition in Utah in order to beef
up the oil-side of its business as well.
Utah Acquisition
UPL reported great figures for its Q1 2014 oil production levels, as these soared
145% year-over-year. This was largely thanks to its Q4 2013 purchase of some oilproducing properties in Northeast Utah in the Uinta Basin.
This often overlooked Basin appears likely to offer Ultra Petroleum solid returns,
and more importantly, help to diversify the companys energy portfolio so that it
wont be quite so dependent on volatile natural gas in the future. Plus, after UPLs
mishaps in developing Colorado fields, this purchase of already producing wells
looks to be a much safer bet for investors.
5 Stocks to Double
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In fact, the company said that is planning to increase oil production by eight fold
while gas production will be flat over the next three years. The company even
expects to triple oil production in 2014 alone suggesting that big plans are ahead
for this often overlooked company that is targeting regions of America that are
not exactly well known for their oil production as of yet, though may still have
incredible potential.
Given this focus, it is pretty clear that UPL is putting itself in a great position for
more gains in the future. Analysts seem to agree as well, which is why the stock
was recently upgraded to a Zacks Rank #1 (Strong Buy) and could keep up its streak
of outperformance.
Analyst Expectations
Recent earnings estimate revisions for UPL have been extremely positive, while
the industry rank for the oil/gas exploration segment is also very strong. In fact,
the segment is in the top third of all industries in the market, while recent earnings estimate revisions have pushed the current growth rate projection for the full
year up to 75%.
Furthermore, not a single estimate has been revised lower for the past 60 days
when looking at the current year or next year time frames. Instead, analysts have
been scrambling to bump up their estimates, pushing the 2014 earnings consensus from roughly $2.30/share 90 days ago to its current level at $2.88/share today.
Clearly analysts really believe in the UPL growth story, and are betting that this
company can continue to deliver. And there is plenty of reason to assume that
Ultra Petroleum can live up to these expectations too; the firm has beaten esti-
5 Stocks to Double
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mates in each of the last four reports and it has a pretty solid track record overall
when it comes to earnings season lately.
Bottom Line
Despite these impressive growth rate projections, UPL is actually trading at
a forward PE right around 10. So, in other words, even with all the opportunities ahead for this firm, the stock hasnt become overbought even though it has
already run up a bit to start 2014.
Instead, UPL remains extremely well-positioned to benefit from the many trends
in the energy space right now, a sector which is really proving itself to be a leader
in the current market environment. This is especially true given the stable situation
on the oil price front, and ever-present concerns from Russia which could shake up
the geopolitical situation of the hydrocarbon market at any time.
And when you add in Ultras attempts at diversification and its shrewd movement
away from Pennsylvania and towards more untapped markets, it becomes clear
why the company has earned itself a top rank and how the company can continue
to move higher in the months ahead.
So if you are looking for a top stock that has the potential to surge in the oil and
gas exploration market, make sure to take a closer inspection of the often-overlooked UPL. The firm has a great growth plan, has analyst support, and is still relatively cheap despite its potential, making it a great candidate to double from its
current levels in short order.
5 Stocks to Double
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5 Stocks to Double
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U.S. construction employment has also been trending higher every month which
has reduced the unemployment rate in that industry.
Another positive signal for construction is that the sale of pick-up trucks remains
robust. When contractors are feeling good about business, they will buy new
trucks and also expand their fleet with more workers.
Non-residential construction is a huge portion of United Rentals business. Its
a bullish indicator for 2014 is construction is finally waking up from the Great
Recession doldrums.
5 Stocks to Double
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5 Stocks to Double
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Xoom (XOOM)
Given the heroic task of picking a stock that is highly likely to double in the next
year, I like to clear my mind of my favorite biases and go back to basics. That starts
with an unbiased screen which seeks to capture strong growth trends. My simple
parameters
100% annual EPS growth past two years
50% annual sales growth past two years
Zacks Rank of #2 or better, indicating strong current EPS revisions
This screen returned 18 names in early June, including some favorites like Facebook,
VIPShop, and SM Energy. It also had a young company I was just becoming familiar with, Xoom (XOOM), an $850 million online payment transfer company. I think
XOOM has the most potential of the 18 to appreciate 50% or more in a year, and
possibly double in a few years.
Xoom provides services which consist of cash pickup, bank deposits and home
delivery, sending money online directly to bank accounts and receiving money in
local currency or US dollars. The company offers services through xoom.com and
walmart.com over the Internet, mobile devices or tablet.
5 Stocks to Double
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5 Stocks to Double
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5 Stocks to Double
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Bottom line: Under $25 is a good place to begin building positions in XOOM.
Our personnel may own positions in the equities mentioned in our reports.
However, all employees are prohibited from any transaction that directly or
indirectly competes with the interests of our subscribers. We are not compensated
by the companies on which we report in any way for our publications.
5 Stocks to Double
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