A biomedical stock with momentum

Whole Foods is sagging, so I'm replacing it in my Wall Street Survivor portfolio with biotech company Techne.

By Jim Van Meerten May 2, 2011 1:47PM

Last week I detected some weakness in Whole Foods Market (WFMI) and needed to replace it with a stock that has positive momentum. The chart below should make it obvious why WFMI needed to be cut. 

 

Most of my picks follow what some people call momentum investing. I do not look for patterns, but I do use Barchart to find stocks that deserve to be recognized for their increases in sales and earnings.


Techne (TECH) is just such a stock, so I added it to my Wall Street Survivor portfolio.


Techne is a holding company with two operating units concentrating on hematology controls, which are used in laboratories to check the accuracy of blood analysis instruments, and biotechnology products such as purified proteins and antibodies.



Technical factors to consider:
  • 100% Barchart technical buy signal
  • Trend Spotter buy signal
  • 10 new highs and up 7.89% in the past month
  • Relative Strength Index 78.77 and rising
  • Trades around 78.37 with a 50 day moving average of 72.82
Fundamental factors:
  • Wall Street brokerage analysts have issued five recommendations on this stock.
  • There are two strong buy, one buy, two hold and no negative recommendations released.
  • Sales are expected to increase by 4.4% this year and 7% next year.
  • Earning are projected to increase by 5.7% this year, 8.4% next year and 10.33% annually for the next five years.
General investor sentiment:
  • As measured on Motley Fool, there is very positive investor sentiment for this stock to beat the market.
  • CAPS members vote 272 to 8 for that to happen.
  • The more experienced All Stars vote 104 to 1 for the same result.
This is a stock with positive momentum, Wall Street buy recommendations based on forecasts of increased sales and earnings, and a positive investor following. It definitely deserves a place on your watch lists.

Jim Van Meerten is an analyst for  Marketocracy Capital Management.  He shares his knowledge and experience from over 40 years of investing in stocks, mutual funds and ETFs on Barchart.com  in his daily blog -- Barchart Portfolio Blogs.
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