Young Guns – 2-23-13

Bonanza Creek Energy Inc (BCEI)

My Young Guns screen returned three stocks that meet my young growth stock criteria and posted positive returns this week.

Bonanza Creek Energy Inc (BCEI)

BCEI was up 1% this week in volume that was 33% lighter than normal. The stock started out the week strong, then collapsed on Wednesday. It fell further on Thursday, but rallied back to close at the high of the day on the highest volume of the week. It then pushed a bit higher on Friday but couldn’t get back to Tuesday’s closing price. The stock is well extended from a second stage cup base that it broke out of in December. Since that breakout, BCEI has logged five weeks of accumulation and only one week of distribution.

BCEI has reported tremendous earnings and sales growth in each of its past three quarters. Earnings growth over those quarters has been 211%, 158% and 363% while sales growth has been just as impressive at 133%, 113% and 125%. The company is next scheduled to report earnings on March 18. Annual earnings for 2012 are projected to be up 297% and then another 65% in 2013. Fund ownership has increased steadily for the past year, however return on equity is only 2% and BCEI‘s industry group has been struggling.

EQT Midstream Partners (EQM)

EQM logged a very tight week on low volume posting an increase of 0.2% in volume that was 52% lighter than average. Tuesday and Wednesday showed slight increases on light volume. Thursday saw a big drop followed by a nice recovery to close at only a slight loss in very light volume. Friday was yet another tight day in light volume. The stock is currently extended from a first stage flat base that it broke out of at the beginning of the year. Since that breakout, the stock has logged one week of distribution and no accumulation, but that week of distribution is the only down week this year.

In the past three quarters, EQM has reported earnings growth of 135%, 48% and 97% as well as sales growth of 18%, 26%and 38%. Annual EPS for 2012 was 1.54, which was a huge increase over 0.90 from 2011. Those earnings are projected to increase another 21% in 2013. The stock currently has very little fund ownership and its industry group is performing just slightly below the threshold we like to see. EQM is schedule to report earnings next on April 25.

SPS Commerce Inc (SPSC)

SPSC was even on the week with volume coming in 57% below average. The stock opened below its 50 day moving average on Tuesday and then traded slightly lower on Wednesday and Thursday. All three days were on very light volume. The stock rebounded to the 50 day line on Friday in even lighter volume. SPSC broke out of a second stage cup with handle base in January and has since trended downward. Since the breakout, the stock has recorded two weeks of distribution and no accumulation.

In its most recent quarter, SPSC reported earnings growth of 50% and sales growth of 42%. This was the fifth straight quarter of strong earnings growth and the third straight quarter of increasing sales growth. Annual earnings are projected to increase 22% and 24% over the next two years. The company has increased fund ownership over the past year, but is in a very poor industry group.