Five Must Buy Breakout Stocks

So you’re the sort of person that’s always fashionably late to the party? The kind that the rest of the family lies to and tells the party starts an hour earlier than it really does. You can be as cool as you want to be when it comes to little Timmy’s First Communion, but don’t let that spill over to your investing.

Unfortunately, just about everybody I’ve talked to is arriving late to the rally here. First they called it a “relief rally” as the oil and biotech stocks started to bounce. But now it just keeps on going. Here we are quickly approaching those three key levels that we’ve seen all year on the Dow, S&P 500 and the Nasdaq, 18,000 – 2,100 – 5,000.

You may be feeling like the move is already in the books. Like you’ve missed out on the easy money trade already. Boy, if I had a nickel for every time I’ve heard that since 2009 I’d have…well, I’d have a lot of nickels. Don’t think that you’ve missed the boat here, in fact, this may be the beginning of a fresh leg higher for a lot of stocks.

The market will continue to reward quality names that have great earnings potential. Here I’ve uncovered five stocks that are Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy) stocks with Momentum Style Scores of “B” or better that are at or very near 52-week highs. These are the strongest stocks in a strong, sharply rebounding market, that give you a great chance to make money heading into the end of the year.

Atmos Energy (ATO - Snapshot Report)

Atmos Energy Corporation, headquartered in Dallas, is one of the country's largest natural-gas-only distributors, serving over three million natural gas distribution customers in over 1,400 communities in eight states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energy also manages company-owned natural gas pipeline and storage assets, including one of the largest intrastate natural gas pipeline systems in Texas and provides natural gas marketing and procurement services to industrial, commercial and municipal customers primarily in the Midwest and Southeast.

ATO shares have broken away from previous resistance at the double top near $59. The probe higher has taken shares all the way above $63. The 20-day moving average is positively sloped and well below the current price all the way down at $58.34. With a commodity channel index (CCI) that’s a little overbought right now above 200, any small pullback should be seen as a buying opportunity. Heavy support sits at the previous double top.

Chubb (CB - Analyst Report)

The Chubb Corporation, through its subsidiaries, provides property and casualty insurance to businesses and individuals. It offers personal insurance products for homes, valuable articles, homeowners, automobiles, and yachts; and personal liability, and personal accident and supplemental health insurance products. 

I tried to avoid any puns using the word “Chubby” for Chubb but how can you resist? The stock is definitely getting…chubby here as shares have pushed through from below $120 to near the 52-week high just shy of $129. Looks like a retest of the post earnings spike is very likely here. If volumes can pick up in the short run I expect the stock to break through to the $130s.

Dr Pepper Snapple (DPS - Analyst Report)

Dr Pepper Snapple Group, Inc. operates as a brand owner, manufacturer, and distributor of non-alcoholic beverages in the United States, Canada, Mexico, and the Caribbean. The company operates through three segments: Beverage Concentrates, Packaged Beverages, and Latin America Beverages. It offers flavored carbonated soft drinks (CSDs) and non-carbonated beverages (NCBs), including ready-to-drink teas, juices, juice drinks, water, and mixers. The company sells its flavored CSD products primarily under the Dr Pepper, Canada Dry, 7UP, A&W, Crush, Sunkist soda, Schweppes, RC Cola, and Squirt brands; and NCB products primarily under the Hawaiian Punch, Snapple, Mott's, and Clamato brands.

DPS successfully leapfrogged the previous 52-week high reached in early August. The dip to the August lows matched up at support from June, providing a great base for the stock. The push through to new highs has been met with a CCI that has retraced back below 100, yet staying above the zero line, which tells me the short term bullish trend remains intact.

Mid-America Apartment Communities (MAA - Snapshot Report)

Mid-America Apartment Communities, Inc. is an independent real estate investment trust. The firm invests in the real estate markets of the United States. It is engaged in acquisition, redevelopment, new development, property management, and disposition of multifamily apartment communities. 

You don’t normally see me talking about REITs here but I can’t help it when we have one breaking out to new highs on such bullish action from analysts. The $84 was a firm cap on this stock all day but the momentum recently in MAA was too much for the top end to contain. Volume has remained relatively steady at just under half a million shares traded. The 20-day moving average still sits below the current price at $82.51 confirming the bullish intermediate-term trend.

Smith & Wesson (SWHC - Snapshot Report)

Smith & Wesson Holding Corporation manufactures and sells firearm products in the United States and internationally. The company operates in two segments, firearms and accessories. It offers handguns, including revolvers and pistols; long guns, such as sporting, bolt action, and single shot rifles; hunting rifles; black powder firearms; handcuffs and restraints; and firearm-related products and accessories. 

Shares of Smith & Wesson have been locked and loaded all year. After the August dip took shares down to $16.50 we’ve seen a strong rebound to within a buck of the previous 52-week high. With a CCI that’s above the zero line but barely overbought at 91, the next push higher could be right around the corner. The 20-day sits below the current price action down at $17.68 right now. Any positive news could be enough to get this one over the hump.

Bottom Line

Don’t let this market pass you buy. Look for quality names with great earnings stories like we find everyday using our Zacks Rank. With so many of these stocks breaking out to new highs, you’ve got a full roster of names you can ride into the end of the year for big potential profits.

 

Disclosure: Zacks.com contains statements and statistics that have ...

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