As I explained in my previous post, my trading strategy is based on buying companies with improving fundamentals at proper technical buy points. My best trades have something in common: the stock had a solid fundamental and technical picture before I bought it.
This is the second part of the list of companies I am currently observing in order to buy them as soon as they break key resistance levels with above than average volume.
Home Loan Servicing Solutions (HLSS)
Barclays recently upgraded HLSS to Overweight from Equal Weight and raised the target to $21 from $15 as Barclays believes that earnings growth from funding cost improvements and accretive portfolio acquisitions is not fully reflected in the stock price. In September HLSS reported Q3 earnings of $0.37 per share, $0.03 better thanthe Capital IQ consensus estimate of $0.34 while revenues came strong at $28.5 million in comparison to the expected $27.65 million. I think investors are pleased with HLSS results for the quarter which exceeded the company’s guidance primarily because lower than expected prepayments reduced amortization.