As I Add a Brand New Stock to My Portfolio, This Intriguing Name Is on My Radar
Now is a good time to review reports and find stocks that may see a shift in the way they are viewed by the market.
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We have mixed action on Tuesday as the market digests recent gains and waits for more new flow. Earnings from Disney DIS were a disappointment, and the Magnificent Seven names are seeing some profit-taking.
The good news is that breadth is running nearly two to one positive as the Russell 2000 small-cap index continues to perform well. It is trading up 0.44% versus the Nasdaq 100 QQQ, which is flat.
I’m primarily focused on trading individual stocks right now and not too worried about indexes or macro matters. If the Russell 2000 can continue to outperform, then it should be a great market for stock pickers.
On Monday, I discussed Viking Therapeutics VKTX, and it continues to act well. I will add to that position on a close over the $80 level.
A new name I am adding today is CompoSecure CMPO. CompoSecure is a leader in premium metal payment cards. It has had great success recently with a 3% Cash Back card for Robinhood HOOD. The valuation looks attractive, and I am going to buy and look into it more closely.
Second-quarter earnings season is winding down, and now is a good time to review reports and find stocks that may see a shift in the way they are viewed by the market. Another name that is on my radar now is Chart Industries GTLS.
Chart is the leader in liquifying gases for transport. In order to transport natural gas, hydrogen, and other fuels, they must be supercooled. The company has to manufacture locations around the world with the goal of being "the global leader in the design and manufacturing of cryogenic process technologies and equipment regardless of molecule."
In 2022, Chart acquired Howden, which provided air and gas handling solutions. The market hated the deal, and the stock crashed from $240 to $110 in a matter of weeks.
It turns out that the deal may not have been that bad after all. There have been some big jumps in estimates, and the market is starting to regain interest in the stock. The company missed estimates in its most recent report, but that was well anticipated, and the stock has moved up strongly over the past few days.
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What is most intriguing to me about Chart is that it trades with a forward P/E multiple of around 15x, but it is expected to increase EPS by 160% to $11.02 in 2024 and then see an additional jump of 30% in 2025 to $14.30.
The average analyst estimate for GTLS is around $195, which is about 20% higher than current levels.
Chart was chugging along very nicely before its poorly timed acquisition, but that may end up paying off as it was originally planned. If the company can meet or exceed estimates, this stock is likely destined to move nicely higher.
At the time of publication, Rev Shark was long GTLS, VKTX, CMPO and DIS.
