May 12th, 2008

Momentum Stocks: NTES, SYKE and EXM

Relative strength, new highs, life cycle (corporations that are reborn through new management, merger, technological breakthroughs, etc.), IPO’s – all are filtering sub-sets within the general Momentum Investing style.

I scroll through the list of stocks produced daily by each and, given the state of the general market, often find exceptional investment candidates after checking their chart. For example, this weekend I precipitated out the following excellent candidates based on a earnings and sales growth and stock price relative strength:

  • NTES (Netease): Another internet company operating an interactive online community in China and is a provider of Chinese language content and services through its online games, Internet portal and wireless value-added services businesses. Other Chinese internet companies include BIDU, SOHU and SINA. All have or on the cusp of breaking into new all-time high territory.

  • SYKE (Sykes): is a business software firm providing outsourced customer contact management solutions and services. The stock’s all-time high is around 30 and the consolidation it’s in the process of completing may represent the half-way breather before it continues its assault on that target.

  • EXM (Excel Maritime Carriers): provides worldwide sea borne transportation services for dry bulk cargo, including among others, iron ore, coal and grain (collectively referred to as major bulks), and steel products, fertilizers, cement, bauxite, sugar and scrap metal (collectively referred to as minor bulks). The stock is about to make an attempt at breaking through resistance at it’s all-time high; if successful, it should again lunge forward to even higher new territory.
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