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Ross’ Watchlist Week of Sep. 13th

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Skyline Champion Corp.

Skyline Champion Corp. (SKY) is in the factory-built homes business. It designs, produces and sells manufactured homes, modular homes and component buildings for single and multifamily residences for customers throughout the US and Canada.

Based in Elkhart, Indiana where locals are famous for their mobile RVs and other major products, the company just takes the talent and refocuses it on boxes that don’t have to always move down the freeway – even if they do for their delivery.

Revenue is surging with heavy, heavy demand. Sales are up for the recent quarter by 86.69%. And it runs a reasonably efficient operation resulting in operating margins at 7.70%. And it delivers to the bottom line with a return on shareholders’ equity at 21.00%.

Here’s how the chart sets up:

Daily Chart of Skyline Champion (SKY) — Source: TradingView

And here’s how the stock sets up with my data:

  • Surge score: 96/100
  • % Above 52-wk low: 171%
  • MFI reading: 57
  • Sales growth: +87%
  • Triple momentum: yes

Sklyine has been an absolute monster of a stock, hence the Surge Score of 96. But the chart is beginning to tighten up.

This one may continue to consolidate for another week or two. And if it does, that would only strengthen the setup.

I’m looking to buy on a break above 65.60.

Syneos Health, Inc.

Syneos Health, Inc. (SYNH) provides services for biotherapy and biopharmaceutical product development with varied expertise to deliver what is needed quickly and efficiently.

And given the soaring demand for product development – the company is well place to continue to capitalize on its markets.

Revenue is up by 26.57% for the recent quarter and it manages to make a reasonable margin on that revenue with operating margin running at 6.60%. And in turn, while it could be a bit better – it does deliver a return on shareholders’ equity of 7.60%.

For this sector, it is not too overvalued as it is priced at 3.01 times book (intrinsic) value and only 2.10 times trailing sales.

Here’s how the chart sets up:

Daily Chart of Syneos Health (SYNH) — Source: TradingView

And here’s how the stock sets up with my data:

  • Surge score: 87/100
  • % Above 52-wk low: 90.2%
  • MFI reading: 50
  • Sales growth: +27%
  • Triple momentum: yes

SYNH recently made new all-time highs. Then, a shakeout day took place last Tuesday, which likely hit a lot of stops and consolidated shares into even fewer hands.

Volume is drying up big time, which to me signals almost no supply coming to market. It will only take a small increase in demand to propel this stock to new heights.

If SYNH gets above 95.60, I will likely buy it.

Avery Dennison Corp.

Avery Dennison Corp. (AVY) loves the pressure. It specializes in pressure-sensitive materials and products that are used in labels, product tickets and even radio frequency identification devices (RFID).

Its customers are just as sticky as its label and other products. With its product line up – it continues to maintain a good base of varied companies from many different industries.

The market for its products continues to soar in demand. This is resulting in sales gains that for the recent quarter are up by 37.52%.

And while its overall product line up runs from simple to complex, it maintains a good level of operating margin for an industrial at 11.60%. But it does really deliver for shareholders with a return on their equity running at a whopping 50.40%.

Here’s how the chart sets up:

Daily Chart of Avery Dennison (AVY) — Source: TradingView

And here’s how the stock sets up with my data:

  • Surge score: 88/100
  • % Above 52-wk low: 96.5%
  • MFI reading: 64
  • Sales growth: +38%
  • Triple momentum: yes

AVY is completing a four-month cup and handle pattern.

The cup is also shallow, retracing just 13% from peak to trough. That makes this a less volatile stock than most, despite its strong price action.

I will be looking to buy the stock above 229.00.

Given the 13% cup depth, my sell target would be more conservative at around 260.00.

But with the tight trading range in the handle, you can play this one very tight.

My stop would be at 221.75 to risk just 3% on this trade.

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2 Comments

  1. SKIP JOHNSON
    September 14, 2021 @ 3:50 am

    I’m pumped about this opportunity & thanks for making it so affordable! Please enroll me in the “Beyond the Trade” newsletter. I’m looking for good things from you guys. Thanks again! -Skip

    Reply

    • Traders Agency Analyst Anthony Speciale
      September 18, 2021 @ 11:50 pm

      Hi Skip! We LOVE messages like this. Nothing makes us happier then folks finding value in all we have to offer. Happy Trading!

      Reply

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