It seems half the financial analysts are warning of global recession and the other half are saying it may be the best time in years to buy. For those investors more inclined to believe the ‘glass is half-full' outlook, here is an interesting seasonal trade possibility.
Pool Corporation (POOL) is a wholesale distributor of pool products to builders, retailers, and commercial customers. The company has decent fundamentals, such as a Return On Equity (ROE) of 42%, and fairly consistent earnings and revenue growth histories. Pool's next earnings release will be on February 18th, before the open. At the last earnings release on October 22nd, they guided above consensus.
The number of institutions holding the stock is slowly increasing. And one director recently bought 1,000 shares of the stock, although that likely was because he was appointed to the board two months earlier.
The stock has generally stayed above the 200-day moving average since 2009. Back in August of last year, the stock rebounded exactly at the 200-day MA. POOL is once again approaching the 200-day MA.
The stochastics are in deeply oversold territory, and the four previous stochastic declines below 20 led to very nice rallies.
Seasonally, the stock has a 100% track record of gains over the next 20 weeks.
Pool Corporation pays a small dividend, currently yielding 1.4%. But it has increased its dividend for five consecutive years, averaging a 14% each year. If I purchased this stock as a long-term investment, I would be sure to reinvest the dividends.
So if you have a positive outlook on the economy, and feel this is a good time to investigate quality stocks that could rebound nicely, it may be time to jump into POOL.
Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day. To find out more, please click on the following link: www.markettamer.com/seasonal
By Gregg Harris, MarketTamer Chief Technical Strategist
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Gregg Harris is the Chief Technical Strategist at MarketTamer.com.
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