Young Guns – 2-16-13

Michael Kors (KORS)

The Young Guns screen for leading stocks that have IPO dates in 2008 or later returned 9 stocks that had positive moves this week. Tightening the screen to stocks that were up at least 4% for the week gave us four young guns for the week:

Michael Kors (KORS)

KORS was up 10.8% this week on volume that was 124% above average. The stock gapped way up on Tuesday, then held those gains on Wednesday and Thursday and improved on them Friday. Volume was above average every day this week, but Tuesday’s gap up had by far the biggest volume. The stock has now broken out of a first stage consolidation that contained 5 weeks of accumulation and 3 weeks of distribution.

The stock reported another quarter of stellar growth numbers this week, posting earnings growth of 129% and sales growth of 70% for the fourth quarter of 2012. This was the fifth time in the past seven quarters that the stock reported triple digit earnings growth and the eighth straight quarter of sales growth of at least 50%. Annual earnings are projected to increase another 113% in 2013. The stock has a return on equity of 57%, which is incredible, and it has increased fund ownership significantly in each of its past four quarters. The only negative is that its industry group is not performing well.

Linkedin Corp (LNKD)

LNKD continued to build on last week’s huge gains by tacking on another 8.1% this week in volume that was 97% above average and just slightly lower than last week. The stock jumped up on Monday in its biggest volume of the week, pulled back a bit on Tuesday, then continued higher Wednesday, Thursday, and Friday. The stock is beyond well extended from a first stage cup with handle base that is officially broke out of in January, but really took off from last week.

In its most recent three quarters, LNKD has reported earnings growth of 45%, 267%, and 192% and sales growth of 89%, 81%, and 81%. It has reported triple digit earnings growth in four of its past five quarters and has posted sales growth of at least 80% in each of the past eight quarters. Annual earnings are projected to increase at least 50% in each of the next two years. Fund ownership has doubled over the past year, and its industry group is just outside of the level we look for.

Nationstar Mortgage Holdings (NSM)

NSM was up 7.1% this week on volume that was just slightly below average. The stock logged big gains on Tuesday, Wednesday, and Thursday with volume kicking in on Wednesday and Thursday, then gave back about half of those gains in above average volume on Friday. The stock did manage to close in the upper half of its weekly range and is now extended from its first stage consolidation.

NSM has reported earnings growth of at least 600% in each of its last four quarters and has reported accelerating sales growth of 37%, 90%, 143%, and 205% in its last four quarters. Annual earnings are projected to grow 917% in 2012 and another 68% in 2013. The company’s return on equity is only 8%, but it has increased fund ownership in each of its past four quarters and is in a very strong industry group.

Soufun Holdings (SFUN)

SFUN was up 7.2% this week on volume that was 3% lighter than average. The stock was up on big volume on Monday, then continued higher on lighter volume for the rest of the week. It broke out of a first stage consolidation in early October, but really started moving higher in December. It started to pull back in January, but appears to be poised to bounce off of its 10 week moving average line.

In its most recent quarter, SFUN reported earnings growth of 68% and sales growth of 30%. Annual earnings have increased in each of the past six years and are projected to continue that growth through the next two years. However, that earnings growth is only projected to be 10% in 2013 and 13% in 2014. The stock has also suffered from declining fund ownership in its most recent quarter and its industry group is just outside of the range we look for.