Sponsored by The HOT STOXX LETTER from DrStoxxTrading.com

I run a series of momentum stock scans each market day, and my most profitable of these is my "TOP 3 HOT STOXX SCAN." This is the scan that lies behind our brand-new HOT STOXX LETTER This momentum system is designed to buy the 3 best stocks in the entire universe of stocks based on market cap (under $2B), low key valuation metrics, strong peer industry standards, strong sales growth, and, of course, strong price momentum over 3 time frames.

Our "TOP 3 HOT STOCKS SCAN" and the trading system that goes with it has an historical performance record of +158.3% average ROI per year for the past 7 years.

For the past couple of weeks, MDCA has shown up on this scan. Subscribers to the letter are now long the stock and are enjoying its recent breakout run. I believe this run is just getting started. Let's look at the numbers:

Company Name: MDC Partners

Market Cap: $592M (smallcap)

Profile: MDC Partners is a Canadian company does marketing, customer service management, branding, social media, and e-commerce management for mid and large size companies. They serve over 1700 clients worldwide. They operate on a "partner" model which allows their best talent to flourish entrepreneurially.

Analyst Support: a recent upgrade from Jefferies from Hold to Buy, and a raised price target from Wedbush. The "business services" sector has been super hot this earnings season, with 67% beating earnings estimates and 100% of companies reporting beating sales estimates.

Why I Like the Stock: in addition to showing up on my scans, I particularly like shares of MDCA here for the following reasons:

• shares trade at only 0.4x sales and only 12x free cash flow, suggesting a healthy balance sheet
• EPS grew 55% last quarter and are expected to grow +113% in 2018
• shares pay an 8% dividend which is very healthy
• institutions own 85% of outstanding shares and funds have been net buyers in recent weeks
• price popped higher out of a 5-month base in late June following an investor conference, suggesting strong demand
• price recently cleared new 9-month highs and are higher by 67% over the past half year
• MDCA carries a Zacks Rank of 2 (buy) and is estimated to beat estimates by 46% when it reports on August 3

The price chart below shows the breakouts we mentioned. We like shares up to $10.75 with a stop-loss under $9.50, and a 1 year price target of $18.