Thursday June 28, 2012
by Kevin Kennedy, editor Coolcat Report
The markets continue to be sluggish as we get into the heart of the summer. The narrow strength remains in areas that have led the market, including home construction, retail and biotech. Here's a play in each of these sectors.
Anika Therapeutics (ANIK), a microcap, makes therapeutic products based on hyaluronic acid, a naturally occurring biocompatible polymer found in the body.
Its lead products help treat osteoarthritis in knees and various joints and it has a number of other products that treat wounds, scars, ear, nose and throat disorders and prevent post-surgical adhesions among other things.
The company has strung together 35 straight profitable quarters and four straight quarters of sales and profit gains. It reported record first-quarter revenues May 3.
The stock is up 36% this year, but is 25% off its high. It lost 20% in May after gaining 214% and rising in six of seven prior months.
Hibbett Sports (HIBB) operates sporting goods stores in small to mid-sized markets, mostly in the Southeast, Southwest, Mid-Atlantic and the lower Midwest regions of the U.S. The company has 835 stores in 26 states.
The company expects to open 55 to 60 new stores, expand approximately 15 high-performing stores and close up to 18 stores this year.
The company has increased its earnings guidance for fiscal 2013 to a range of $2.50 to $2.65 per share. It has seen 11 straight quarters of earnings and sales increases. Sales in 2012 rose 10% to $733 million, while earnings were up 34%. The stock is up 24% YTD and is 10% off its high.
The iShares Dow Jones US Home Construction ETF (ITB) tracks the Dow Jones U.S. Select Home Construction Index, which has 27 holdings.
Its top 10 positions make up about 65% of the index. Both DR Horton and Lennar make up about 10% of its holdings. It also includes home improvement companies like Home Depot and Lowe’s. ITB is up 31% this year and is within 5% of its high.
Learn more about this financial newsletter at Kevin Kennedy's Coolcat Report.