3 High Momentum Stocks to Watch This Week

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Each week I publish stocks to watch for the upcoming week as potential momentum trades or longer-term investments. The stocks below all have a 50k minimum average daily share volume and traded at a 52-week high on strong volume, with a minimum of two times relative volume on Friday, July 1st. In addition, stocks were required to close Friday higher than the open price. The full list with weekly performance is tracked on the right-hand side of Scott's Investments.


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Last week 30 stocks made the list and this week we also find 30 stocks on the list.  There are several intriguing trade candidates on this week's list.  Biotech/drug manufacturing remains a hot, speculative industry.  XLV (SPDR Health Care ETF) is also a top 3 selection in my US Sector ETF Portfolio for July due to its relative strength compared to other sectors.  I will be watching the following four stocks this week and in coming weeks for sustained momentum and improving fundamentals:


Antares Pharma (AIS)


AIS, a pharmaceutical company, focuses on self-injection pharmaceutical products and technologies, and topical gel-based products. The stock is up over 28% in a month and 36% year-to-date. It saw increased volume in June and could be poised for further gains. Oppenheimer initiated coverage in May with a $3.20 price target and an "Outperform" rating.  Insiders purchased shares in March and April below $2 and Deerfield Capital recently reported a 9.59% passive ownership in the company.  The company did announce a share offering in May of 12,500,000 shares at $1.60/share, which is dilutive to existing shareholders. The company has new treatments in Phase 2 and 3 clinical trials, which could serve as future catalyst. 


My primary interest in the company is from a technical perspective. It is in a sector currently showing strength and the stock recently broke through a trading range of $1.40-$2 and hit a multi-year high  as indicated by the weekly chart below:


Charts courtesy of Finviz
























Questcor (QCOR)


QCOR is another health care/biotechnology stock showing recent price momentum. Its primary drug is H.P. Acthar Gel (repository corticotropin injection), an injectable drug that is approved for the treatment of certain disorders with an inflammatory component, including the treatment of exacerbations associated with multiple sclerosis, infantile spasms, opsoclonus myoclonus syndrome, and nephrotic syndrome. It is up almost 80% year-to-date and over 15% in a month.  With no debt, a strong balance sheet, and earnings expected to grow at over 40% next year, the stock could see further gains, especially given that institutions have been accumulating the stock.  Institutional ownership increased from 15.6 million shares (quarter 4 2010)  to 20.7 million shares in the first quarter of 2011 (source: AlphaClone). It also sports a return on equity and return on investment of over 35%.


Recently the stock hit an all-time high as indicated by the weekly chart:






















Darden Restaurants (DRI)


Darden Restaurants, Inc., through its subsidiaries, owns, operates, and franchises full service restaurants in the United States and Canada. The company operates restaurants under the brand names of Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze, and Seasons 52.  Last week DRI reported fourth quarter earnings of $1.00/share, up from $.81 a year ago. Revenue was also up 6.8% versus the prior year quarter. Darden expects 2012 earnings per share growth in the range of 12% to 15%, based on overall sales growth between 6% and 7%, giving it a forward P/E ratio of 12. It also hiked its dividend, declaring a $.43/share quarterly dividend payable on August 1st, up from the previous dividend of $.32/share.  This gives DRI a current yield of 3.26%.


It is also trading a new all-time high as indicated by the weekly chart:





















While I track the overall weekly performance of each list, my objective is not to purchase or recommend every stock on the list.  The primary objective is to identify stocks that are either short-term trades or long-term investments.  PriceSmart (PSMT) was featured in my 5/6/11 list and had volatile price action in subsequent weeks. After waiting for PSMT to form a wedge pattern, I initiated a long position. I like the long-term growth prospects of PSMT and technicals; however, my long position was not initiated until over a month after it appeared on my "Stocks to Watch This Week" list.


Disclosure: Long PSMT. May initiate positions at any time in the future in the stocks mentioned in this article.



Ticker Company Sector Market Update Market Cap
AFCE AFC Enterprises Inc. Services Here 418.44
AGP AMERIGROUP Corporation Healthcare Here 3586.08
AIS Antares Pharma Inc. Healthcare Here 194.37
AMSWA American Software, Inc. Technology Here 223.52
ANH Anworth Mortgage Asset Corporation Financial Here 964.16
AZZ AZZ Incorporated Industrial Goods Here 639.79
BDX Becton, Dickinson and Company Healthcare Here 19534.38
BLT Blount International Inc. Consumer Goods Here 873.09
CACI CACI International Inc. Services Here 1955.34
CAMP CalAmp Corp. Technology Here 104.25
CEC CEC Entertainment Inc. Services Here 832.51
DGII Digi International Inc. Technology Here 362.62
DRI Darden Restaurants, Inc. Services Here 7202.14
EAT Brinker International Inc. Services Here 2218.11
ECON EGShares Emerging Markets Consumer Financial Here
ELD WisdomTree Emerging Markets Local Debt Financial Here
ENTG Entegris, Inc. Technology Here 1402.61
EVV Eaton Vance Limited Duration Income Fund Financial Here 1963.1
EWM iShares MSCI Malaysia Index Financial Here 1026.72
IDX Market Vectors Indonesia Index ETF Financial Here
JVA Coffee Holding Co.Inc. Consumer Goods Here 96.08
MA Mastercard Incorporated Services Here 37947.1
NWBI Northwest Bancshares, Inc. Financial Here 1361.13
PBH Prestige Brands Holdings Inc. Healthcare Here 659.89
PJP PowerShares Dynamic Pharmaceuticals Financial Here 111.68
QCOR Questcor Pharmaceuticals, Inc. Healthcare Here 1634.52
RFG Rydex S&P Midcap 400 Pure Growth Financial Here 481.66
RPG Rydex S&P 500 Pure Growth Financial Here 99.36
SDIV Global X SuperDividend ETF Financial Here
V Visa, Inc. Services Here 73021.26


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