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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 ...