OPINION

Stocks in Motion

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Attention momentum investors:  

Newton’s Laws tell us that objects in motion tend to stay in motion.  This applies to stocks going down, stocks going up, and also stocks experiencing repetitive motion, a.k.a. trading ranges. 

I usually write about “buy low” opportunities within such trading ranges, but today I’d like to point out some “objects in motion” — a.k.a. stocks — which are bucking the market and possibly breaking out on the upside.

Copa Holdings (CPA, $67.46) is a Latin American provider of airline passenger and cargo service in Panama, Colombia, Venezuela and Ecuador. CPA is projected to have earnings (EPS) growth of 65% through fiscal year 2013, and the stock pays a dividend of 2.4%.

The stock rose to a trading range of $61 to $70 since early May 2011 and did not suffer through recent summer doldrums in the stock market. There’s some price resistance at $70 as the stock re-visits its 2007 highs, but considering its earnings momentum and share price outperformance, I would be happy to buy this stock at $66 or $67 and wait for the next breakout.

Visa (V, $91.42) is a global payments technology company that connects consumers, businesses, banks and governments in more than 200 countries and territories. The company is projected to have earnings (EPS) growth of 67% through fiscal year 2013.

Visa stock fully recovered from the 2008 Financial Meltdown, reached a new high, established a new trading range of $66 to $96 during the last 18 months, and now appears to be completing that trading range in preparation for another move upwards. I would buy Visa on any down day in the market for a good growth stock opportunity.

Kimberly-Clark (KMB, $69.29) is a global consumer products company which manufactures diapers, paper towels, tissues and more. Corporate net income is projected to grow 23% through fiscal year 2013.

The stock has recently broken past resistance at $68. The next stop on its upward climb should be at $72 as it re-visits its 2007 highs.  There will be some price resistance there as frustrated people who’ve owned the stock for four years will be selling, causing the price to bounce around a bit in the $68-$72 area.

But there aren’t too many of those people, because KMB has outperformed most other stocks relative to the 2008 Financial Meltdown, AND investors are receiving a 4% dividend.