Follow The Leaders – AZZ, DXPE, OCN, SLCA

AZZ Incorporated (AZZ)

My Follow The Leaders screen returned 13 stocks that had positive weeks and met my leadership criteria this week. Narrowing the screen down to stocks that were up at least 5% on the week left me with four stocks.

AZZ Incorporated (AZZ)

AZZ was up 8.7% this week, bouncing off its 10 week line in volume that was 10% above average, but still lower than the volume in last week’s distribution. The stock jumped up on Monday in big volume, then continued to climb in light volume on Tuesday and Wednesday. It paused, briefly, on Thursday and then continued higher on Friday. AZZ is currently extended form a third stage flat base that it broke out of in early January. This week was the first week of accumulation since that breakout, however the stock has logged two weeks of distribution.

In its most recent quarter, AZZ reported earnings growth of 54% and sales growth of 28%. These aren’t triple digit numbers that make us excited, but they more than meet our minimum goals. Annual earnings are projected to increase 43% this year and an additional 27% next year. At 15%, return on equity is slightly below what we look for, but fund ownership is increasing and the stock’s industry group is strong.

DXP Enterprises (DXPE)

DXPE was up 10.4% in volume that was 128% above average this week. The stock was down a bit on Monday and Tuesday, and then rebounded on Wednesday in very high volume. It then continued to push higher in increasing volume on Thursday and Friday. The stock is currently well extended from a first stage consolidation that it broke out of at the beginning of the year. Since that breakout, the stock has seen three weeks of accumulation and only one week of distribution.

In its most recent quarter, DXPE reported earnings growth of 51% and sales growth of 34%. This made eight straight quarters of earnings growth over 50% for the company. Annual earnings are projected to slow over the next two years to 14% and 15%. Fund ownership decreased in the company’s most recent quarter and its industry group is rank at the bottom of our acceptable range.

Ocwen Financial Corp (OCN)

OCN was up 6.8% this week in volume that was 29% greater than average. Volume was also stronger than last week as the stock bounced off of its 10 week moving average line regaining all of the losses it suffered last week. After losing the 50 day line on Monday, the stock regained it on Tuesday in slightly higher volume. It then proceeded higher for the rest of the week, with big volume kicking in on Thursday. OCN is currently in buying range from a third stage consolidation. Since forming that consolidation, the stock has seen four weeks of accumulation and only two mild weeks of distribution.

In its most recent quarter, OCN reported monster earnings growth of 488% and sales growth of 51%. Annual earnings are projected to increase 242% in 2013. These are the kind of eye catching earnings numbers we like to see. The company has increased fund ownership in each of its past four quarters and is in a very strong industry group.

US Silica Holdings Inc (SLCA)

SLCA rocketed over 30% higher on its biggest volume since the week of its IPO. The stock held steady on Monday and then soared higher on huge volume on Tuesday. It kept going up on heavy volume on Wednesday and Thursday and then pulled back a bit on Friday. The stock is currently well extended from the first stage cup with handle base that it broke out of in early January. Since that breakout, the stock has logged two weeks of accumulation and one week of distribution.

In its most recent quarter, SLCA reported earnings growth of 41% and sales growth of 42%. Annual earnings are projected to be up only 15% in 2013. The company has an incredibly strong 48% return on equity, has increased fund ownership all year, and its industry group is right at the bottom of our acceptable range.