Follow The Leaders – ALK, ASGN, BBSI, CBPO, SLCA

Alaska Ait Group Inc (ALK)

My Follow The Leaders Screen returned 17 stocks that had positive weeks and met my leadership criteria this week. I had to narrow the screen all the way to a minimum 9% return on the week to get the screen down to five stocks. By this measure, this was the strongest week of the year.

Alaska Air Group Inc (ALK)

ALK was up 9.7% this week on volume that was 60% above average. The stock burst out of the gate on Monday and closed at the high of the day on volume that was over 80% above average. It then continued higher on Tuesday in even greater volume. After pulling back a bit on Wednesday, it continued higher on Thursday and then again on Friday, closing at the high of the day on both days. ALK is currently way extended from the first stage cup with handle base that it broke out of in October. Since that breakout, the stock has logged 8 weeks of accumulation and only one week of distribution.

In its most recent quarter, ALK reported earnings growth of 37% and sales growth of 8%. This was the third straight quarter of positive earnings growth. Annual earnings are projected to continue growing by 15% in 2013 and 14% in 2014. ALK has increased fund ownership over the past year, has a strong return on equity of 26%, and is in a very strong industry group.

On Assignment Inc (ASGN)

On Assignment Inc (ASGN)ASGN was up 12.7% this week on volume that was 11% above average as the stock retook its 10 week moving average in powerful fashion. The stock got back to the 50 day line in above average volume on Monday and then rocketed through it on Tuesday. It continued a bit higher on Wednesday, then pulled back slightly on Thursday, then jumped even higher on Friday. ASGN is currently extended from a second stage flat base that it broke out of at the beginning of the year. Since that breakout, the stock has recorded four weeks of accumulation and two weeks of distribution.

In its past three quarters, ASGN has reported earnings growth of 75%, 62%, and 55% and sales growth of 97%, 139%, and 148%. It is a positive sign that the sales growth is increasing, but is worrisome that the earnings growth is decreasing. It is also concerning that annual earnings growth is estimated to decline in 2013. The company has a disappointing return on equity of 14%, but has increased fund ownership in each of the past four quarters and is in a very strong industry group.

Barrett Business Services (BBSI)

Barrett Business Services (BBSI)BBSI was up 9.3% this week on volume that was 11% below average. The stock was up slightly in each of the first four days of the week and then really took off on Friday. It was disappointing that volume was not very strong as the stock made a new high. BBSI is currently extended from a third stage flat base that it broke out of in September. Since that breakout, the stock has seen a lot of accumulation and very little distribution.

In its most recent three quarters, BBSI reported earnings growth of 89%, 93%, and 95% as well as sales growth of 26%, 30%, and 34%. Not only are these numbers very strong, they are also increasing. That is a very positive sign. Annual earnings are projected to grow 33% in 2013. The company has also increased fund ownership over the past year and is in a very strong industry group.

China Biologic Products (CBPO)

China Biologic Products (CBPO)CBPO was up 10% this week on volume that was 117% above average. This strong volume is exactly the kind of confirmation we like to see as a stock makes a new high. The stock was up huge in strong volume on Monday, then continued higher the rest of the week before giving back a good portion of those gains on Friday. While the stock didn’t close at the top of its weekly range, it did still manage to close in the upper half of the range.

In its most recent quarter, CBPO reported earnings growth of 29% and sales growth of 29%. Annual earnings are projected to be up 33% for 2012, but that growth is projected to slow to 5% in 2013. The company has a strong return on equity of 28% and is in a very strong industry group, but has almost no fund ownership.

US Silica Holdings Inc (SLCA)

US Silica Holdings Inc (SLCA)SLCA was up 10.1% this week on volume that was 78% above average as the stock managed to close above last week’s high. The stock was able to move higher in above average volume every day this week. It is currently extended from a first stage cup with handle base that it broke out of at the beginning of the year. Since that breakout, the stock has logged three weeks of accumulation and only one week of distribution.

In its most recent three quarters, SLCA reported earnings growth of 200%, 89%, and 41% as well as sales growth of 41%, 58%, and 42%. While it is impressive to see these strong and consistent sales numbers, it is concerning that the earnings growth is decelerating. The company has an incredibly high return on equity of 45%, has increased fund ownership in each of the past four quarters, and its industry group is right inside the range we look for.