Portfolio Armor's New #1 Name

We made 100% trading this one in August.

Painting of a KitchenAid mixer by a local artist, Jennie Traill Schaeffer. Our current number #1 name sells KitchenAid appliances, among other things.

A Successful Earnings Trade In August

Back in August, we placed a bullish trade on a stock based on these four criteria:

1. LikeFolio’s earnings score based on social data. The higher the number, the more bullish, the lower (more negative) the number, the more bearish.

2. Portfolio Armor’s gauge of options market sentiment.

3. Chartmill’s Setup rating. On a scale of 1-10, this is a measure of technical consolidation. For bullish trades, we want a high setup rating; for bearish trades, a lower one.

4. Zacks Earnings ESP (Expected Surprise Prediction). This is a ratio of the most accurate analyst’s earnings estimate versus the consensus estimate.

That first criterion in this case, the social data earnings score, was a +50. Remember that number for a moment.

Two days later, we exited that trade for a 100% gain. Since then, that stock has dropped about 32%, but it’s back on our radar this week for a few reasons:

1. It was Portfolio Armor’s #1 name on Tuesday (I post Portfolio Armor’s top ten names here once per week, usually on Thursday nights, but the site runs that ranking every day the market is open).

2. LikeFolio just put out a bullish report on it noting that its current earnings score for the company is +64 (Remember, it was +50 back in August, and the higher the score the better).

3. It has an RSI (Relative Strength Index) of 26. Recall from our previous post that RSIs under 30 suggest a stock is oversold.

In short, social data (and Portfolio Armor’s gauge of options sentiment) are more bullish on the stock than they were in August, and the stock is nevertheless about 30% cheaper, and likely oversold.

Here’s a way we can try to make more than 100% on it this time.

Our Bullish Trade