WILC, NUTR & THER: Are These Small Cap Stocks About to Break the Trendline Resistance Barrier?

G. Willi-Food International Limited (NASDAQ: WILC), Nutraceutical Int'l Corp. (NASDAQ: NUTR) and Theratechnologies (NASDAQ: THER; TSX: TH) are three small cap stocks with trendlines that are approaching areas of resistance. That means these three small cap stocks could be on the verge of a breakout – so long has the fundamentals back them up. So does G. Willi-Food International Limited (WILC), Nutraceutical Int'l Corp. (NUTR) and Theratechnologies (THER) have what it takes to break the resistance barrier?

Starting with G. Willi-Food International Limited (NASDAQ: WILC), its an Israeli company that develops, imports, exports, manufactures, markets and distributes over 1,000 mostly kosher food products worldwide. On Monday, G. Willi-Food International fell 0.65% to $4.60 (WILC has a 52 week trading range of $4.24 to $8.08 a share) for a market cap of $62.44 million. G. Willi-Food International is up 0.57% since the start of the year but its also down 34% for the past year. Investors should be aware that when G. Willi-Food International reported third quarter results, its management indicated the company was hit by both rising costs and falling prices due to the wave of economic protests that hit Israel during the quarter. Moreover, G. Willi-Food International also expected this weakness to continue into 4Q2011 and 1Q2012 plus the chart looks like the stock has been moving sideways since December towards the resistance line. Baring anymore surprises, G. Willi-Food International should easily move beyond this point. Hence, traders and investors should watch for 4Q2011 and 1Q2012 earnings to see if G. Willi-Food International can finally produce some gains.

Meanwhile, Nutraceutical Int'l Corp. (NASDAQ: NUTR) is an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold to and through domestic health and natural food stores. On Tuesday, Nutraceutical International rose 3.54% to $12.47 (NUTR has a 52 week trading range of $10.65 to $15.99 a share) for a market cap of $128 million. Its also up about 13.7% since the start of the year but also down around 4.7% over the past year. Nutraceutical International is heading towards the resistance trendline and investors should note that last Thursday, the company reported fiscal 1Q2012 net sales of $46.6 million verses $45.2 million for the same period last year. On the other hand, Nutraceutical International did report lower net income of $3.4 million verses $3.9 million on the back of increased manufacturing overhead costs associated with new manufacturing facilities plus costs associated with recent acquisitions. Nutraceutical International’s Chairman and CEO noted that they will emphasize cost cutting and acquisitions of unique branded products plus proactive stock purchases. However and considering the chart, I wonder if Nutraceutical International can produce any other news that would effectively break the resistance barrier.

Finally, Theratechnologies (NASDAQ: THER; TSX: TH) is a Canadian specialty pharmaceutical company that discovers and develops innovative therapeutic peptide products, with an emphasis on growth-hormone releasing factor peptides. On Tuesday, Theratechnologies fell 2.22% to $2.64 (THER has a 52 week trading range of $1.76 to $5.00 a share) for a market cap of $164.4 million. Theratechnologies is also down about 2.58% since the start of the year and is down about 45% over the past year. However, Theratechnologies is approaching the trendline resistance point and the company will announce its financial results for the fiscal year ended November 30, 2011, on Wednesday, February 8, 2012 - before markets open. Early in December, Theratechnologies announced that it was discontinuing its muscle wasting in COPD clinical program plus downsize 60% of its workforce (costing $3 million related to severance costs) in order to accelerate profitability with the aim of being profitable in 2013. This will lead to $10 million in cost savings for 2012 plus Theratechnologies had estimated that the program would have required a total investment of approximately $90 million over the next four years. Hence, my guess is that Theratechnologies has a good chance of breaking the trendline resistance barrier in the charts.

The Bottom Line. G. Willi-Food International Limited (WILC), Nutraceutical Int'l Corp. (NUTR) and Theratechnologies (THER) are all very interesting small cap stocks but given the choice, I would say that investors should be watching WILC and THER.