By Timothy Lutts, Editor of Cabot Stock of the Month
From Cabot Wealth Advisory 7/11/11 Sign up for free Cabot Wealth Advisory e-newsletter
Chart-reading is one leg of the very successful investment system used by Cabot Market Letter and Cabot Top Ten Report, and when a strong market uptrend is interrupted by a haymaker like the market threw today, I like to scan my list of favorite growth stories and see which stocks are behaving best.
Today, I like the action of Sequans Communications (SQNS), which was featured in Cabot Market Letter back on June 1, when editor Michael Cintolo wrote this:
"Sequans represents the cutting edge of chip technology, with a product line confined to 4G circuits that run smart phones, routers, USB dongles and embedded wireless modems. Virtually all of the company's revenue comes from sales of chips that run the WiMAX system, which is essentially a WI-FI system on steroids. WiMAX systems bring high-speed Internet access to mobile devices and the global system is growing at an enormous rate. SQNS came public on April 18 at 10, and rocketed to as high as 19 when analysts added coverage with buy ratings. Sequans puts 26.3% of sales back into R&D, sports triple digit revenue growth and earnings are just picking up steam. Volatility is high, with big gains and big corrections, but SQNS is very hot."
Since then, the stock has behaved in a very constructive manner ... for a small, fast-growing technology stock. Buying volume has continued to outweigh selling volume, and the stock has calmed down as it consolidates its late-May blast-off.
Earnings will be released before the market opens on July 28, and the only question is how wonderful they'll be.
I think buying between here and the stock's 50-day moving average, now at 13, could work out very well.
Editor's Note: Cabot Market Letter is our flagship advisory and a Model Portfolio-based newsletter of the best leading growth stocks in the market. It's been four and a half years since Cabot's VP of Investments Mike Cintolo took over the Market Letter, and during that period he's beaten the S&P 500 by 13.3% annually thanks to top-notch stock picking and market timing. If you want to own the top leaders in every market cycle, be sure to give Cabot Market Letter a try by clicking HERE.
President, Chief Investment Strategist, Editor of Cabot Stock of the Month
Timothy Lutts heads one of America’s most respected independent investment advisory services, publishing eight newsletters to more than 165,000 subscribers around the world. Tim leads a dedicated team of professionals who serve individual investors with high-quality investment advice based on time-tested Cabot systems. Under his leadership, Cabot has been honored numerous times by both Timer Digest and the Hulbert Financial Digest as among the top investment newsletters in the industry. Tim also edits Cabot Stock of the Month.
|Sequans Communications (SQNS)
19 Le Parvis de La Defense
Paris, France 92073
33 1 70 72 16 00
|Index Membership: N/A
Industry: Semiconductor - Integrated Circuits
Full Time Employees: 182