Recently I discussed six stocks that I believe will do well in 2020. My plan is to discuss all six names periodically and provide some insight into how I am trading them.
It is particularly important to have a clear trading style when dealing with these stocks. My style is to own them in a variety of timeframes and to buy weakness and sell strength as opportunities arise. I tend to make numerous buys and sells in the stocks I favor.
Aurinia Pharmaceuticals (AUPH)
AUPH is currently in a news vacuum as it awaits the next catalyst. That catalyst is likely the filing of a new drug application for voclosporin in the first half of the year for the treatment of dry eye syndrome.
I believe the stock is a potential takeover candidate but that is highly speculative and there is no way to time when something might occur. My intention is to trade around a core position while awaiting more news.
This article provides a good overview of the company's business.
Datadog (DDOG)
DDOG has traded nearly straight up since the first of the year and is technically extended as it awaits earnings after the close Thursday.
The company likely lowballed guidance last quarter and there is anticipation of a very strong report. The question is whether it will be strong enough to keep the stock running higher.
I've reduced my position in front of earnings and will be looking for a chance to re-enter following the earnings report.
InMode (INMD)
INMD has been riding its 50-day simple moving average and is building some decent support. Earnings are due on the morning of Feb. 18 and I expect an upbeat report with good guidance.
The stock is viewed by some as expensive so Datadog will need a good report to keep it going. The company is rolling out some new products into new markets so the potential for increased guidance is good.
Tempur Sealy (TPX)
TPX reported excellent earnings Wednesday night with substantial beats on both the top and bottom lines. The company reported EPS growth of 52% over the same quarter last year and revenues were up 29%.
With a trailing P/E of 24, the stock still looks like a value even though it is at all-time highs. I'll be looking for entry points on a pullback from the gap-up open Thursday morning.
Recro Pharma (REPH)
REPH has not yet announced its fourth-quarter earnings report date but it should be coming soon. One of its top customers, Teva Pharmaceutical TEVA reported strong earnings, which bodes well for the company.
The stock is acting well and seems to be anticipating a good report.
Personalis (PSNL)
PSNL has been the laggard of my group primarily due to a lack of news flow and the likelihood that there is some selling of shares that were locked up. The company announced one joint venture for its NeXT product and will likely update progress on its earnings call.
No date has been confirmed yet for the fourth-quarter report. I'm holding a core position and waiting for better price action before adding.
