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Monday, October 31, 2016
Wednesday, August 31, 2016
Friday, August 5, 2016
Monday, June 20, 2016
Wynn Resorts (WYNN)
Market Cap: 10.3B
Sector: Consumer Discretionary- Resorts/Casinos
EPS Q/Q: 267.7%
EPS Growth Next Year: 34%
EPS Growth Next 5-yrs: 21%
Forward P/E: 21
Dividend Yield: 1.94%
Roll the Dice on WYNN
If you have been to Las Vegas you have no doubt been pleasantly awed by Steve Wynn's creations. The Bellagio, The Mirage and Wynn Las Vegas are his designs, in my opinion they are some of the nicest casinos in town. The art, the class, and luxury are what make Steve Wynn's resorts unlike any other. In 2000 Steve Wynn sold his company Mirage Resorts to MGM, he then proceeded to take Wynn Resorts public. He currently remains the Chairman and CEO.
Vegas however is not where the primary focus of the company lies. The Macau exposure always takes the driver seat in terms of market performance. If Macau is poor, WYNN struggles and vice versa. Anytime an investment has to deal with Chinese market influences results can be volatile. But with volatility and skepticism comes opportunity.
While most continue to hem and haw over future uncertainties, WYNN stock has now doubled off its January low and has been leading the market on this most recent recovery.
I'm a "price action" guy; I believe the market moves ahead of good/bad news. This is always evident after the fact where once the stock makes a huge recovery, fundamentals begin to show improvements. By the time the story catches up to the market you've missed the meat of the move. I believe the market is showing us something here. While investors remain skeptical on China, the stock continues to reverse its 2-year downtrend. For the first time since early 2014 WYNN has formed a major higher low on its weekly chart.
The Weekly chart shows a clearly formed Head/Shoulder Bottom formation and this week we saw the highest closing price for the stock since August of 2015. The new closing high has triggered this base formation and suggests higher prices are ahead.
The 20 WMA is below price and rising and above the 50 Week SMA for the first time since 2014. This tells me a significant trend change is underway. The risk/reward sets up very well as we can use the new higher low as our reference point to trade against. As long as WYNN stays above $87 on a weekly basis we want to be own this stock.
If we zoom in a bit and look at the Daily chart we can see the stock made its highest daily close since last August and is now breaking away from a 3-month sideways period. Following the torrid rally off the February lows WYNN has had a chance to cool off and position itself for the next run.
Its very useful to note how the stock behaved over the past few weeks as a hint to its future direction. While the market rallied to a higher swing high at the end of May, WYNN followed suit with a 20% gain in about 13 trading days. Since the early June peak for the S&P500, the market has pulled back roughly 3/4 of the prior rally. WYNN on the other hand traded perfectly sideways for the last 7 days and on Friday (another weak day for the market) broke to nearly 1-year highs.
This kind of Relative Strength is exactly what we want to see; rally with the market on the way up, consolidate sideways while the market pulls back, and then lead higher on the next advance.
Comparing WYNN to its peer group is also a helpful way to identify Relative Strength. When we look at the two other major Casino/Resort companies LVS and MGM, we can see that since the February lows WYNN has dominated vs its competition.
There is no question who the market favors in this group. Money is flowing into WYNN. Its our job to identify this behavior and jump on for the ride.
Our first objective will be to fill the open gap from April 2015 at $130.48. That gives us a roughly 30% upside target initially and then we can reevaluate the position. With an initial stop at $87 and target at $130 we will have a 2-1 risk/reward to start.
Trends have a way of persisting longer than seems reasonable so its very possible we continue to see more upside beyond this early assumption. As long as the trend remains strong we will want to be positioned aggressively in the stock. Seeing how WYNN traded at $250 per share as little as 2-years ago its very possible substantial upside exists beyond our basic estimates. At $103 per share we are getting a great entry point in an industry leader just as it is emerging from the depths of a major bear market correction.
Sector: Consumer Discretionary- Resorts/Casinos
EPS Q/Q: 267.7%
EPS Growth Next Year: 34%
EPS Growth Next 5-yrs: 21%
Forward P/E: 21
Dividend Yield: 1.94%
Roll the Dice on WYNN
If you have been to Las Vegas you have no doubt been pleasantly awed by Steve Wynn's creations. The Bellagio, The Mirage and Wynn Las Vegas are his designs, in my opinion they are some of the nicest casinos in town. The art, the class, and luxury are what make Steve Wynn's resorts unlike any other. In 2000 Steve Wynn sold his company Mirage Resorts to MGM, he then proceeded to take Wynn Resorts public. He currently remains the Chairman and CEO.
Vegas however is not where the primary focus of the company lies. The Macau exposure always takes the driver seat in terms of market performance. If Macau is poor, WYNN struggles and vice versa. Anytime an investment has to deal with Chinese market influences results can be volatile. But with volatility and skepticism comes opportunity.
While most continue to hem and haw over future uncertainties, WYNN stock has now doubled off its January low and has been leading the market on this most recent recovery.
I'm a "price action" guy; I believe the market moves ahead of good/bad news. This is always evident after the fact where once the stock makes a huge recovery, fundamentals begin to show improvements. By the time the story catches up to the market you've missed the meat of the move. I believe the market is showing us something here. While investors remain skeptical on China, the stock continues to reverse its 2-year downtrend. For the first time since early 2014 WYNN has formed a major higher low on its weekly chart.
The 20 WMA is below price and rising and above the 50 Week SMA for the first time since 2014. This tells me a significant trend change is underway. The risk/reward sets up very well as we can use the new higher low as our reference point to trade against. As long as WYNN stays above $87 on a weekly basis we want to be own this stock.
Its very useful to note how the stock behaved over the past few weeks as a hint to its future direction. While the market rallied to a higher swing high at the end of May, WYNN followed suit with a 20% gain in about 13 trading days. Since the early June peak for the S&P500, the market has pulled back roughly 3/4 of the prior rally. WYNN on the other hand traded perfectly sideways for the last 7 days and on Friday (another weak day for the market) broke to nearly 1-year highs.
This kind of Relative Strength is exactly what we want to see; rally with the market on the way up, consolidate sideways while the market pulls back, and then lead higher on the next advance.
Comparing WYNN to its peer group is also a helpful way to identify Relative Strength. When we look at the two other major Casino/Resort companies LVS and MGM, we can see that since the February lows WYNN has dominated vs its competition.
Our first objective will be to fill the open gap from April 2015 at $130.48. That gives us a roughly 30% upside target initially and then we can reevaluate the position. With an initial stop at $87 and target at $130 we will have a 2-1 risk/reward to start.
Trends have a way of persisting longer than seems reasonable so its very possible we continue to see more upside beyond this early assumption. As long as the trend remains strong we will want to be positioned aggressively in the stock. Seeing how WYNN traded at $250 per share as little as 2-years ago its very possible substantial upside exists beyond our basic estimates. At $103 per share we are getting a great entry point in an industry leader just as it is emerging from the depths of a major bear market correction.
Tuesday, April 5, 2016
Sun Communities (SUI)
Sector: REITS- Residential
EPS Q/Q: 678%
Sales Q/Q: 38%
Gross Margin: 59.7%
Return on Equity: 11.2%
Dividend Yield: 3.6%
The Real estate sector has been showing excellent relative strength recently. Going a step further, the Real Estate Investment Trusts are the best performers within the larger group. Investors are favoring their dividend yields and strong growth. This is a rare combination in the stock market. Typically if a company pays a substantial dividend, it does so to entice investors due to its general lack of growth prospects. Whereas with certain REITS you are getting this out-sized dividend payout plus 670% EPS growth Quarter over Quarter in the case of SUI.
Our current market is scrambling for yield and genuine Sales growth. Sun Communities is offering both; last quarter's Sales were a 38% increase over the previous quarter, and the current dividend yield is 3.6%.
Not only are these fundamental growth metrics fantastic, but the chart is offering a very favorable entry currently. I try to focus on stocks that align on all major timeframes, SUI fits this requirement.
SUI Monthly
When a stock consolidates so tightly after a substantial rally it shows current holders are unwilling to sell their shares and supply remains tight. When supply is tight, new buyers are forced to pay up to get in, which causes higher prices. What I like so much about a lengthy sideways move is that I know the stock is not extended and due a correction. The sideways pause allows the trend to cool off and reset a new support area to launch its next rally from.
The sideways movement also makes managing risk clear. If the breakout fails and the stock rolls over, we know not to hang around hoping for a bottom to form. We can simply move on and look for the next opportunity.
SUI Weekly
Last week's breakout to new weekly and monthly closing highs gives us our signal to initiate a long position. For risk management purposes we only want to own this stock above the recent pivot low at $66.65. Should that area fail to hold on a pullback we would know the breakout has failed and we would step aside. This sets up as a very favorable risk/reward where we only are risking $5/share or 7%. The measured move from the base alone targets prices near $81. On this modest target we already have a 2-1 risk/reward.
From large bases can come strong rallies. As they say, "the bigger the base, the higher the move in space". SUI has the makings of a tremendous growth stock and it now appears to be the right time to get involved. I'm a believer that the Fundamentals tell you "what" to buy and the Technicals tell you "when" to buy. The Fundamentals are clearly pointing higher for Sun Communities and the Technical picture suggests now is the time for new positions.
Monday, March 28, 2016
Nordic American Tanker (NAT)
Market Cap: 1.27B
Sector: Transportation- Shipping, Oil Tankers
EPS Past 5-years: 131%
PE: 11
Gross Margin: 76.8%
Return on Equity: 13%
LT Debt/Equity: 0.37
Dividend Yield: 12%
Sector: Transportation- Shipping, Oil Tankers
EPS Past 5-years: 131%
PE: 11
Gross Margin: 76.8%
Return on Equity: 13%
LT Debt/Equity: 0.37
Dividend Yield: 12%
In a market overflowing with oil supply, storage and maintenance are in high demand. Nordic American Tanker (NAT) has been taking advantage of this favorable environment and appears poised to continue in the future.
Markets are forward looking and the demand for NAT's services have been seen in the recent recovery of the share price. This glut of Crude Oil is not likely to dissipate any time soon which puts NAT in position to continue its recovery over the next year or more.
They also pay a 12% divided to share holders. While their payout ratio is on the high risk side, NAT has met its dividend obligations for 74 consecutive quarters.
We like a hefty yield, but this thesis is based on genuine price appreciation. For the last few years NAT has carved out a support base built on substantial demand. Looking at the historical volume trends, nearly 3/4 of the total shares exchanged have occurred below current prices. This means investors on the whole are showing gains and are supporting prices at current levels.
Since 2013 the average monthly volume has increased from 11 million shares/month to 26 million shares/month currently. That is an increase of 235% in average shares traded per month. This increase also occurred following an 87% decline from the high in 2005 to the lows in 2013.
When we see an increase in trading volume like this it tells us the "big money" is getting involved. It is up to us to decipher what that means. They are either doing one of two things: either large institutions are liquidating positions or large institutions are accumulating positions. We determine which of these two is taking place by observing the behavior of the share price.
Note on the Monthly chart how the majority of volume didn't take place until the stock already bottomed in June of 2013. When big money distributes shares the price declines, when they accumulate prices rise. We saw the stock stabilize at the $7 level and volume surged through 2014-2015. Was this volume distribution or accumulation? Well, one look at the chart shows the share price appreciating from a low of $7 to a high of $17 over that period. To me this shows blatant accumulation by big institutions who are preparing for the substantial rise in price to continue.
If we zoom in on this same Monthly chart we can see exactly what happened on the recent pullback in February. As the price dipped to retest the prior base highs from 2012-2014, volume surged again as buyers piled in on the markdown. In March we are seeing upside follow-through from that reaction.
Also note in the last quarter Institutions accumulated another 3.41% of the available shares outstanding according to Finviz.com. This is further confirmation of what we are observing.
Institutions are accumulating this stock in an agressive way. While $16-$17 has been a recent ceiling for NAT shares, its only a matter of time until that is broken and a new uptrend ensues.
I also like what is occurring over the shorter-term timeframe. For the better part of the last year the stock has been consolidating the large rally from 2014. NAT has traded from a high of $17.45 in July of 2015, down to the recent low of $9.94. Essentially we have seen a 2/3 retracement of the prior uptrend (Fibonacci aficionados will appreciate the "golden ratio" correction). With the bounce in the broad market since February, shares have recovered and now sit at $14 and change.
The recent bottom came on exceptionally high trading volume (~10x average daily volume) and then formed a reversal base. We now have a valid short-term signal that suggests more upside is likely and that buyers have regained control.
Since 2013 the average monthly volume has increased from 11 million shares/month to 26 million shares/month currently. That is an increase of 235% in average shares traded per month. This increase also occurred following an 87% decline from the high in 2005 to the lows in 2013.
When we see an increase in trading volume like this it tells us the "big money" is getting involved. It is up to us to decipher what that means. They are either doing one of two things: either large institutions are liquidating positions or large institutions are accumulating positions. We determine which of these two is taking place by observing the behavior of the share price.
Note on the Monthly chart how the majority of volume didn't take place until the stock already bottomed in June of 2013. When big money distributes shares the price declines, when they accumulate prices rise. We saw the stock stabilize at the $7 level and volume surged through 2014-2015. Was this volume distribution or accumulation? Well, one look at the chart shows the share price appreciating from a low of $7 to a high of $17 over that period. To me this shows blatant accumulation by big institutions who are preparing for the substantial rise in price to continue.
If we zoom in on this same Monthly chart we can see exactly what happened on the recent pullback in February. As the price dipped to retest the prior base highs from 2012-2014, volume surged again as buyers piled in on the markdown. In March we are seeing upside follow-through from that reaction.
Also note in the last quarter Institutions accumulated another 3.41% of the available shares outstanding according to Finviz.com. This is further confirmation of what we are observing.
Institutions are accumulating this stock in an agressive way. While $16-$17 has been a recent ceiling for NAT shares, its only a matter of time until that is broken and a new uptrend ensues.
I also like what is occurring over the shorter-term timeframe. For the better part of the last year the stock has been consolidating the large rally from 2014. NAT has traded from a high of $17.45 in July of 2015, down to the recent low of $9.94. Essentially we have seen a 2/3 retracement of the prior uptrend (Fibonacci aficionados will appreciate the "golden ratio" correction). With the bounce in the broad market since February, shares have recovered and now sit at $14 and change.
The recent bottom came on exceptionally high trading volume (~10x average daily volume) and then formed a reversal base. We now have a valid short-term signal that suggests more upside is likely and that buyers have regained control.
Remember, major bottoms are not put in by heavy selling. Major bottoms are formed from heavy BUYING. It appears we are seeing this here.
For risk management purposes we want to hold this position above $12.30 which is where the rising 20 Month SMA currently sits. That trailing moving average has acted as support on any dip over the last 18-months.
For risk management purposes we want to hold this position above $12.30 which is where the rising 20 Month SMA currently sits. That trailing moving average has acted as support on any dip over the last 18-months.
It appears there is substantial upside potential from current prices, especially once the $17 resistance is broken. The long-term chart and current base formation suggests measured targets and resistance near the $22-$23 area. If successful we are risking $2 for the potential to gain $8 or $9. Pair that with a 12% dividend payout and the risk/reward sets up very nicely in our favor.
Monday, February 29, 2016
First Solar: An Energy Play, The Clean Way
Market Cap: 7.15B
Sector: Technology- Semiconductor Specialized
EPS Growth This Year: 37.7%
PE: 13.13
Gross Margin: 25.6%
LT Debt/Equity: 0.05
First Solar just reported a very strong quarter last week posting EPS of $1.60 per share, crushing analysts estimates of $.80 per share. A 100% upside surprise launched the stock more than +13% on Wednesday to new 52-week highs.
Its difficult to compare FSLR's financial metrics to its peers and not be a bit underwhelmed.
However the stock YTD has been the leading performer in the group returning more than 8% so far in 2016. One reason for this is likely their low debt relative to the group as many of the other major solar names sport risky debt/equity levels.
Whatever the reason may be the performance shouldn't be discounted. While the Solar sector has been broadly weak, First Solar has broken away from the pack and appears likely to continue trending higher.
As Oil has continued its decline, the Solar ETF TAN has moved right with it. The two are almost perfectly correlated over the past 52 weeks.
As you can see TAN and USO have traded in lockstep for the past year. The standout here however is the graph of FSLR which completely decoupled in October 2015. The performance of First Solar recently has been staggering vs the broad sector, and yet has rallied along with Oil when it makes its bounces. The differences between the two however is that the bounces in USO have led to lower lows while the rallies for FSLR have led to higher highs.
It makes sense that Solar and Oil trade similarly. When Oil is low there is less demand for alternatives. Likewise when Oil is expensive many seek renewable resources to lessen the burden of higher fuel costs. If Energy is set to recover which many feel it is, it would follow that the Solar stocks would be in line to recover as well.
When seeking an investment opportunity we want to look for relative out-performers. We want to own the best, otherwise whats the point of picking stocks? With that in mind here are the YTD comparisons between First Solar and some of the higher profile Solar stocks in the TAN ETF:
Here is First Solar in green leading the pack by nearly a 20% margin so far in 2016. The next closest competitor is SEDG coming in at -12% YTD.
Playing an Energy recovery through a Solar company rather than an Oil specific company has several advantages:
-Less direct effect of the price of Oil on performance. FSLR has demonstrated since October that it can use bounces in Oil to rally strongly.
-Less direct risk to debt issues involved with the price of the Oil commodity. While a recovery in the price of Crude to ~$45-50/barrel would seem to benefit Solar stocks due to their high correlation, $45/barrel Oil is still generally below break-even pricing for most marginal US producers. This is likely to cause financial strain and potential bankruptcies on select companies. First Solar has already shown extremely low debt levels and the market seems to be rewarding that solvency.
-A growing movement toward alternative energy solutions tends to favor a company like First Solar.
First Solar Weekly chart
Zooming out to view the last 5-years of FSLR's performance we can see that the stock has gained 600% since its 2012 lows. It has also been making a series of higher highs and higher lows during this timeframe. I particularly like that the stock has managed to regain support at the $60 level as that has been a key inflection point during this 5-year basing period.
The stock has also triggered an 18-month Double Bottom formation
We can see the two recent lows from January 2015 and August 2015. These lows were accompanied by a positive momentum divergence and a strong volume breakout in December above the $61 level. Since December the stock has consolidated the recent rally and this week resumed to new 52-week highs on another surge in trading volume. Momentum is now in a bullish range and the stock continues to trend to higher highs and higher lows.
Our risk management is very simple for this trade. If the stock fails this high and falls below the most recent "higher low" the new trend would be invalidated and we would step aside. We also received a nice low volume pullback on Friday making our entry here even more favorable. We will place stops at $61 on a weekly closing basis with initial price targets at $100. This sets up a potential $30 gain for a $9 risk. With positive price action in place that is an easy risk for me to take.
Sector: Technology- Semiconductor Specialized
EPS Growth This Year: 37.7%
PE: 13.13
Gross Margin: 25.6%
LT Debt/Equity: 0.05
First Solar just reported a very strong quarter last week posting EPS of $1.60 per share, crushing analysts estimates of $.80 per share. A 100% upside surprise launched the stock more than +13% on Wednesday to new 52-week highs.
Its difficult to compare FSLR's financial metrics to its peers and not be a bit underwhelmed.
However the stock YTD has been the leading performer in the group returning more than 8% so far in 2016. One reason for this is likely their low debt relative to the group as many of the other major solar names sport risky debt/equity levels.
Whatever the reason may be the performance shouldn't be discounted. While the Solar sector has been broadly weak, First Solar has broken away from the pack and appears likely to continue trending higher.
As Oil has continued its decline, the Solar ETF TAN has moved right with it. The two are almost perfectly correlated over the past 52 weeks.
It makes sense that Solar and Oil trade similarly. When Oil is low there is less demand for alternatives. Likewise when Oil is expensive many seek renewable resources to lessen the burden of higher fuel costs. If Energy is set to recover which many feel it is, it would follow that the Solar stocks would be in line to recover as well.
When seeking an investment opportunity we want to look for relative out-performers. We want to own the best, otherwise whats the point of picking stocks? With that in mind here are the YTD comparisons between First Solar and some of the higher profile Solar stocks in the TAN ETF:
Playing an Energy recovery through a Solar company rather than an Oil specific company has several advantages:
-Less direct effect of the price of Oil on performance. FSLR has demonstrated since October that it can use bounces in Oil to rally strongly.
-Less direct risk to debt issues involved with the price of the Oil commodity. While a recovery in the price of Crude to ~$45-50/barrel would seem to benefit Solar stocks due to their high correlation, $45/barrel Oil is still generally below break-even pricing for most marginal US producers. This is likely to cause financial strain and potential bankruptcies on select companies. First Solar has already shown extremely low debt levels and the market seems to be rewarding that solvency.
-A growing movement toward alternative energy solutions tends to favor a company like First Solar.
First Solar Weekly chart
The stock has also triggered an 18-month Double Bottom formation
Our risk management is very simple for this trade. If the stock fails this high and falls below the most recent "higher low" the new trend would be invalidated and we would step aside. We also received a nice low volume pullback on Friday making our entry here even more favorable. We will place stops at $61 on a weekly closing basis with initial price targets at $100. This sets up a potential $30 gain for a $9 risk. With positive price action in place that is an easy risk for me to take.
Friday, January 29, 2016
Popeye's Louisiana Kitchen (PLKI)
Market Cap: 1.36B
Sector: Restaurants
EPS Growth This Year: 13.5%
EPS Growth Next Year: 17.49%
Sales Growth Q/Q: 11.30%
ROE: 64.6%
Gross Margin: 66.1%
Popeye's Louisiana Kitchen has strong metrics for sales growth and profits. They expect earnings per share to increase in the high double digits for the next 5-years. Boasting a stellar 64.6% Return on Equity and 66.1% Gross Margin, PLKI has the numbers in place to be a consistent winner going forward.
The stock has been consolidating near its all-time highs for 14-months, this has occurred after a very strong second half of 2014 where it gained 50% from September through February of 2015.
Despite the overall market's weakness and volatility, PLKI has continued to press against its highs. Since the beginning of 2016 the SP500 has declined -7%. PLKI has gone from a price $57 to nearly $61 over the same timeframe, a gain of +6.5%. This shows tremendous out-performance and Relative Strength, which is exactly what I look for when choosing a new investment.
While the overall market is trying to find support, PLKI is making new 40-week highs.
+PLKI WEEKLY
January 29th is the close of the month, the worst starting month in the history of the US stock market. Meanwhile PLKI is setting new monthly closing highs and is displaying very constructive behavior.
+PLKI MONTHLY
I like how this stock has pulled back to the rising 20 Month SMA. This is a very important bull market indicator. When the moving average is rising and price is above it is said to be in a secular uptrend. This is exactly what we are seeing here. Price is also kicking right off that line suggesting its ready to begin its next leg higher.
My indicators align nicely here as the stock is setting new all-time Relative highs vs the SP500.
The weekly MACD line has also reset to Zero, is positively crossed and turning higher.
The risk/reward is largely in our favor. Since the sideways action has been relatively tight, we can place our stops just below the pivot at $56.45. This means we are only risking 8% for potentially limitless upside.
In a market struggling for growth and positive stability, Popeye's Kitchen is a rare bright spot. As investors our job is to position our capital into the highest probability opportunities. PLKI is giving us resiliency to downside volatility and strong relative performance. Now is a great opportunity to buy into a market leader after a healthy and stable digestion of a long-term uptrend.
Sector: Restaurants
EPS Growth This Year: 13.5%
EPS Growth Next Year: 17.49%
Sales Growth Q/Q: 11.30%
ROE: 64.6%
Gross Margin: 66.1%
Popeye's Louisiana Kitchen has strong metrics for sales growth and profits. They expect earnings per share to increase in the high double digits for the next 5-years. Boasting a stellar 64.6% Return on Equity and 66.1% Gross Margin, PLKI has the numbers in place to be a consistent winner going forward.
The stock has been consolidating near its all-time highs for 14-months, this has occurred after a very strong second half of 2014 where it gained 50% from September through February of 2015.
Despite the overall market's weakness and volatility, PLKI has continued to press against its highs. Since the beginning of 2016 the SP500 has declined -7%. PLKI has gone from a price $57 to nearly $61 over the same timeframe, a gain of +6.5%. This shows tremendous out-performance and Relative Strength, which is exactly what I look for when choosing a new investment.
While the overall market is trying to find support, PLKI is making new 40-week highs.
+PLKI WEEKLY
January 29th is the close of the month, the worst starting month in the history of the US stock market. Meanwhile PLKI is setting new monthly closing highs and is displaying very constructive behavior.
+PLKI MONTHLY
I like how this stock has pulled back to the rising 20 Month SMA. This is a very important bull market indicator. When the moving average is rising and price is above it is said to be in a secular uptrend. This is exactly what we are seeing here. Price is also kicking right off that line suggesting its ready to begin its next leg higher.
My indicators align nicely here as the stock is setting new all-time Relative highs vs the SP500.
The risk/reward is largely in our favor. Since the sideways action has been relatively tight, we can place our stops just below the pivot at $56.45. This means we are only risking 8% for potentially limitless upside.
In a market struggling for growth and positive stability, Popeye's Kitchen is a rare bright spot. As investors our job is to position our capital into the highest probability opportunities. PLKI is giving us resiliency to downside volatility and strong relative performance. Now is a great opportunity to buy into a market leader after a healthy and stable digestion of a long-term uptrend.
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