For much of my career, I've tracked growth stocks of all market caps. I've expanded my view to include some dividend-payers that couldn't be classified as growth, though I definitely still consider growth names as one of the tent poles of most investors' portfolio construction.
On Thanksgiving night, I, like many stock geeks, found myself running a few screens (most likely just a bad habit reinforced by many years of such aberrant behavior).
Putting aside the fact that I was studying moving averages and earnings performance while others were lining up for early Black Friday deals, I was curious about which growth names are currently showing technical leadership.
I ran one of my tried-and-true growth screens. Among several other factors, I built this particular screen to ferret out stocks priced above $15, and moving at least 300,000 per shares per day.
Earlier this week, I wrote about some solid performers from the world of pharmaceuticals. One I didn't include in that article was Valeant Pharmaceuticals (VRX), which is up 18% year-to-date, and was edging slightly higher Friday morning, trading near $55.11. Valeant specializes in meds to treat neurological and dermatological ailments, among other conditions.
This is one of those large caps with a high beta, 1.21. Its current pullback looks pretty orderly, however. The stock is hovering below its 50-day average, but found support above its 200-day.
The company has been in the news lately. On Nov. 16, the company got the Federal Trade Commission's OK for its acquisition of Medicis Pharmaceutical (MRX), another maker of dermatological drugs. On Nov. 19, Valeant said it would buy back $1.5 billion of its debt and equity.
Analysts see Valeant earnings growing at hefty rates in the next couple of years. Income is expected to be $4.54 per share this year, a gain of 55%. In 2013, analysts expect earnings at $5.50 per share, an increase of another 21%.
Jumping off the pharmaceutical bandwagon, another growth performer is Ulta Salons (ULTA). Like Valeant, this is a familiar name to those who have tracked growth names since March 2009, when the market rally kicked off.
The stock is up 42% year-to-date, and is currently in the midst of what appears to be a constructive pullback. It sliced its 200-day line in heavy volume on Nov. 9. It was Ulta's first 200-day breach in more than three years.
Personally, I'm excited about this company because it plans to open a new location five minutes from my home in Santa Fe, N.M., in a site formerly occupied by the dearly departed Borders chain.
But putting on my stock-analysis cap again, I continue to like the fundamental case for Ulta. Wall Street sees earnings growing by 37% and 26% in the next two years.
The company reports its third quarter Nov. 29 after the close. Analysts are eyeing earnings of 56 cents per share on revenue of $504.11 million, which would mark significant year-over-year increases. The company beat views in each of the past four quarters.
I like the stock's current pullback. The stock joined other retailers in rally mode on Black Friday. Ulta gapped higher, and climbed back above its 200-day line. It's in a potential buy zone, but medium- and short-term traders should use caution if (more like: when) market volatility returns, possibly dragging the stock lower again.