Some Stocks Rise Through the Fall
In times of weakness, it can pay to look for strength.
On the theory that stocks that hold up well--or surge--during a market “correction” are among the best candidates to climb further during any recovery that follows, the accompanying chart shows shares flexing their muscle of late.
Using Telescan Inc.’s database, we screened for: at least 2% share price increases over the last week, three weeks and 12 weeks; projected earnings-per-share growth of at least 15% for the next two years; debt-to-equity ratios of 1% or less (as a measure of safety); and market capitalization of at least $100 million, to weed out the iffy small fry.
After tossing out a couple of companies boosted recently by special situations, such as takeover offers, we ended up with the accompanying list of 20 stocks.
Though heavy in technology companies, the list includes firms specializing in everything from casual clothing (Abercrombie & Fitch of Reynoldsburg, Ohio) to high-speed chip-to-chip interface technologies (Rambus Inc. of Mountain View, Calif.).
They range in size from Noven Pharmaceuticals, a $147-million (market capitalization) drug company based in Miami, to Compaq Computer, the personal computer giant based in Houston, with a market cap of $52 billion.
Several of the companies specialize in medical technology. Noven develops advanced drug-delivery technologies; Xomed Surgical Products Inc. of Jacksonville, Fla., makes devices for ear, nose and throat specialists; and IDX Systems Corp. of South Burlington, Vt., provides health-care information systems.
Five of the companies are based in California, including QLogic Corp. of Costa Mesa, which designs and supplies semiconductor-related products; Steven Myers & Associates Inc. of Newport Beach, which provides management services; Xircom Inc. of Thousand Oaks, which makes PC cards; and Vitesse Semiconductor of Camarillo.
The farthest-flung entry is New Dimension Software of Tel Aviv, which develops management software.
Other tech-related companies on the list focus on different niches:
* Advantage Learning System of Wisconsin Rapids, Wis., develops educational software and training.
* Dendrite International Inc. of Morristown, N.J., markets computerized sales management systems.
* Inspire Insurance Solutions Inc. of Fort Worth specializes in outsourcing and software for the insurance industry.
* AVT Corp. of Kirkland, Wash., develops and markets a variety of telephony products.
* Mecklermedia Corp. of Westport, Conn., produces Internet content as well as trade shows and print material.
There’s no guarantee these stocks will continue to rise, of course. But their relative strength recently, as the broad market has tumbled, suggests some investors see appeal in these particular stocks, even as most stocks sink.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
A Show of Strength
Twenty stocks that have risen during the recent market correction, ranked by one-week performance:
*--*
Tues. 1-wk 3-wk 12-wk 2-yr Company Ticker close chg. chg. chg. PEG* Noven Pharmaceuticals NOVN $7.16 27.2% 21.7% 14.0% 110.5% AVT AVTC 24.13 20.6 3.2 30.4 25.1 IDX Systems IDXC 53.50 14.9 16.3 25.4 23.9 Rambus RMBS 60.75 14.8 7.2 44.4 57.2 QLogic QLGC 58.50 12.2 5.7 27.2 17.8 Steven Myers & WINS 28.06 11.6 28.6 54.2 58.7 Associates Anika Therapeutics ANIK 16.13 11.2 13.1 31.6 53.3 Xircom XIRC 22.88 10.9 12.2 36.1 49.7 Dendrite International DRTE 46.00 10.8 7.6 53.9 27.8 Vitesse Semiconductor VTSS 34.88 8.8 7.7 33.3 25.2 Abercrombie & Fitch ANF 49.88 8.2 6.6 17.8 29.7 Unitrode UTR 14.88 8.1 22.0 6.2 60.8 Geotel Comm GEOC 46.00 7.2 10.8 50.8 31.0 Advantage Learning ALSI 35.13 6.8 4.4 9.7 32.6 System Mecklermedia MECK 24.25 6.0 7.1 16.1 82.0 Compaq Computer CPQ 33.88 6.0 4.4 12.8 240.7 Inspire Insurance NSPR 36.25 5.0 9.0 9.8 37.0 Solutions Intelligroup ITIG 21.38 4.9 19.1 18.7 35.9 Xomed Surgical Products XOMD 35.38 3.2 6.4 22.0 26.5 New Dimension Software DDDDF 29.19 2.4 2.8 5.9 34.6 S&P; --0.3 --8.2 --3.7
*--*
* Projected annualized earnings-per-share growth for the next two years.
Source: Telescan
