Up to this point in 2014, there are 60 stocks that have more than doubled YTD. What did they have in common early in the year?
59 out of 60 had a market cap of under 10 billion at the beginning of the year.
53 out of 60 had a float of under 100 million shares.
49 were trading under $25 at the beginning of the year.
3 are recent IPOs – $RDUS, $VTAE, $GPRO
19 out of the 60 are biotech. Another 4 are drug manufacturers. Industry momentum is a big contributor to individual stock performance.
Gold is about flat YTD. Gold miners have done even worse as a group. After a strong first quarter, they’ve been under tremendous selling pressure. There is one gold miner that has doubled YTD: $RIC
13 were foreign companies. China is the most represented, followed by Israel with $SPCB, $TSEM and $RDCM
The growth of smart phone usage could be noticed everywhere, even in the stock market. 5 of the doubles in 2014 are semi-conductors: $SWKS, $VIMC, $TQNT, $RFMD, $TSEM. Two of the doubles are cyber security companies: $SPCB and $VDSI.
16 of the 60 doubles in 2014 or 27%, doubled in 2013 too. This is a substantial percentage.
While it is true that long-term momentum (longer than than 3 years) tends to mean-revert, 6-12 month momentum tends to continue. Often, the next big winner in the stock market has already doubled in the recent past. For example, take the Chinese $VIPS and $BITA. Both quadrupled in 2013, before they went up more than 150% in 2014. $VIPS more than doubled in 2012, too.
Check my new book: The 5 Secrets To Highly Profitable Swing Trading
