Get a Load of These IPOs

As I write this early Thursday evening, I know full well the market could go either way Friday, based on how the February jobs report turns out. It isn't great to see higher-volume declines followed up by lower-volume gains, and that's exactly what's happened in the major averages in recent days. On Feb. 29, the Nasdaq reversed off its high on volume of 2.08 billion shares. Then, on Tuesday, it fell in higher volume again on volume of 1.8 billion shares. For the next two days, as the Nasdaq bounced back in lower volume each day, there wasn't much conviction behind the buying. This generally makes for a weak foundation, and it's the main reason why I'm still cautious on this market. Conviction behind the selling and lackluster buying are not a recipe for success. While recent price and volume trends in the major averages point toward mild institutional selling, the vast majority of market-leading growth stocks are holding up just fine. Several names in my model growth portfolio continue to work nicely, among them Priceline (PCLN) and Buffalo Wild Wings (BWLD). So the market's giving mixed signals for now, which means both the bull case and the bear case hold water. I'm prepared for anything at this point. If the market suffers another higher-volume decline Friday, it'll be another feather in the bear cap. But if buyers come into the market again, I'll have my watch list ready and won't be afraid to put more money to work. Two fast-growing, yet lesser-known recently debuted names popped up in one of my screens Thursday that deserve a closer look. Both are speculative small-cap stocks, but they have plenty of positive qualities. With so many extended stocks out there, it makes sense to look at recent new issues showing price strength that could still be in the early stages of a move higher. The first is Tangoe (TNGO), with market capitalization of $617 million. The company makes on-demand software that helps firm manage the entire lifecycle of a product from beginning to end, and the stock went public in July at $10 share. Shares closed Thursday at $18.74, up 3.4% on the day. The stock recently pulled back to its 20-day moving average, but it quickly found support. Tangoe's 50-day line at $16 is also a key support level. It could try to take out its recent high of $19.90. If it does, look for strong volume. If it's there, a small position could be started. Tangoe (TNGO) -- Daily Source: StockCharts.com View Chart » View in New Window » Tangoe shares broke out powerfully Feb. 14, soaring nearly 14% in strong volume, after the company reported strong earnings. Quarterly profit rose 100% from a year ago to $0.08 a share, while sales grew 57% to $29.2 million. Earnings prospects look solid going forward, with annual profit expected to rise 62% in 2012 (compared with 2011) and 36% in 2013. The company turned its first annual profit in 2010. At the end of the fourth quarter, 128 mutual funds owned the stock, up from 98 at the end of the third quarter. Meanwhile, over in the oil-and-gas sector is Denver-based producer Bonanza Creek Energy (BCEI). It might be an unfamiliar name, but it's another fast grower in the group showing relative price strength. The company went public in December at $17. Shares closed Thursday at $19.04, up 1.2%. Bonanza Creek's primary assets are in the Niobrara shale in the Greater Wattenberg Field in Colorado and the Cotton Valley formation in southern Arkansas. It has a market cap of $781 million. Bonanza Creek hasn't released fourth-quarter earnings yet, but the consensus estimate is for profit of $0.20 a share on sales of $35.36 million. In the year-ago quarter, it earned $0.09 a share with sales of $20.6 million. Full-year profit in 2011 is expected to rise 75% from 2010 and 165% in 2012. That would be eye-popping growth indeed. Bonanza Creek also has a compelling chart because the stock continues to be accumulated. As of Friday's close, it was only 3% away from its recent high. The stock fell below its 20-day moving briefly during Tuesday's market downdraft, but it's back above the line. Similar to Tangoe, Bonanza Creek could try to take its recent high of $19.69 -- and the more volume, the better. Bonanza Creek Energy (BCEI) -- Daily Source: StockCharts.com View Chart » View in New Window »

Get a Load of These IPOs

These speculative, recently debuted names could be in the early stages of a move higher.

Columnist Conversation

Wednesday Morning Fibocall for 8/12/2020

Tuesday Morning Fibocall for 8/11/2020

Monday Morning Fibocall for 8/10/2020

COLUMNIST TWEETS

Please Join or Log In to manage and receive alerts.