Follow The Leaders – 2-8-13

CasesarStone Sdot-Yam

My Follow The Leaders screen produced 12 stocks that had positive gains this week. Tightening the screen to 2% gain for the week got the list down to the five best performing stocks that met my leadership criteria this week.

CaesarStone Sdot-Yam Ltd (CSTE)

CSTE is based in Isreal and makes Quartz Countertops, so it is directly benefiting from the housing recovery. The stock was up 14.4% this week on volume that was 58% above average. The bulk of the gains came on Wednesday when it was up 9.1% in 333% greater than average volume. It continued to build on that gain on both Thursday and Friday, but volume was slightly below average.

The stock just reported stellar fourth quarter numbers including earnings growth of 68% and sales growth of 14%. This was the third straight quarter reporting earnings growth of at least 30%. Annual earnings have increased in each of the past three years and are projected to continue growing for the next two years.

CSTE is now well extended from the first stage flat base that it broke out of in early December.

Three D Systems Corp (DDD)

After dropping over 15% in heavy volume last week, DDD responded by regaining almost all of that loss this week in volume that was 34% above average, but still lighter than last week. It has been well documented that this stock has been a strong leader for most of 2012 and the first few weeks of 2013. It is currently well extended from a third stage cup base.

In the first three quarters of 2012, DDD reported earnings growth of 47%, 42%, and 78% and sales growth of 63%, 52%, and 57%. Annual earnings for 2012 are projected to be up 71%, which will be the fourth straight year of earnings growth. It also has a respectable return on equity of 18% and has seen increased fund ownership in each of the past four quarters. DDD is scheduled to report earnings on February 25.

Mastec Inc (MTZ)

MTZ was up 2.3% this week on volume that was 11% lighter than average. The stock jumped up on slightly better than average volume on Monday and then spent the rest of the week building on those gains despite giving a little back on Thursday. The stock is well extended from a first stage flat base that it broke out of in December.

In its most recent quarter, MTZ reported earnings growth of 25% and sales growth of 31%. This growth was down slightly from the previous quarter. Annual earnings are projected to be up 45% for 2012 and another 27% in 2013. It has a return on equity of 12%, which is below what we generally look for, but fund ownership has increased significantly all year. MTZ is scheduled to report earnings on February 28.

Ocwen Financial Corp (OCN)

OCN has made a couple of the weekend lists the past few weeks. This week it was up 3.2% on 4% faster than average trading. After breaking out of a third stage consolidation and then closing below its pivot point last week, OCN retook that pivot point on Tuesday in volume that was 39% above average.The stock is currently sitting in the buy range of that late stage consolidation. This week was its third week of accumulation since forming that consolidation versus only one week of distribution.

In its most recent quarter, OCN reported earnings growth of 95% and sales growth of 90%. Annual earnings are projected to grow by 86% in 2012 and another 213% in 2013. The stock has a return on equity of only 8%, but has increased fund ownership all year. It is scheduled to report fourth quarter earnings on February 23.

SodaStream Intl Ltd (SODA)

SODA was up 2.1% this week on volume that was 21% lighter than average. This gain only made up a small portion of the big loss the stock suffered last week. Up until last week, the stock had been on a nice run since breaking out of a first stage cup with handle base in December.

In its most recent quarter, SODA logged earnings growth of 58% and sales growth of 49%. Annual earnings for 2012 are projected to increase 30%, which will be the fifth straight year of earnings growth. Return on equity is a healthy 18%, but fund ownership has held constant all year. SODA is scheduled to report earnings on February 20.