Small Cap Network Blog

I think I may have stirred up a hornet’s nest with the whole ‘hot industry’ thing. I did it on a whim Friday, and followed up with some specific picks on Monday. As a result, we’ve now got several requests for us to keep digging - to pinpoint the exact stocks responsible for the industry’s strength. Here’s one of the requests from a reader….

Dear Sir,

In the newsletter you mentioned that food distributors were one of the groups you were looking at.  Will you be breaking that down to specific companies within that sector in a future newsletter?

I have been looking at Military Resale Group ( a food distributor ) for possible purchase, however I am unable to find much current information concerning the restructuring they have been undergoing. I believe there could be a lot of upside potential in this stock if the restructuring plan is successfully completed. They had mentioned a retail division in one of the press releases in the past, could you inquire about that and the overall progress of the restructuring plan.

Any information would be greatly appreciated.
 
Thank You

Thanks for the question. First of all, let me say to you and all the other readers….I’m really pleased that you’re thinking along these lines now. I’m convinced half of my success as a trader is directly the result of spotting the right sector at the right time, and then digging up the best stock in the group. The media - and most financial professionals - try it the other way around. But, that really doesn’t work the right way often enough.

Now, to answer your question….

I don’t know. I’d like to be able to highlight these trends and drill down into all of them. The thing is, time is an issue (for everyone, really). My plan was to dig deeper into the four groups I mentioned if I could find the time. I’ll try, but I can’t guarantee anything.

That said, I’ll make you a promise….if you help me, I’ll help you. If you vow to read the newsletter and blog on a regular basis - and contribute via the blog when you have something to add - then yes, I’ll break down all these trends into individual stocks. If there’s only a passive or mild interest in me doing this though, I really can’t afford to devote time to it.

Let’s try it for a few days and see what kind of feedback we get.

As far as Military Resale Group is concerned, your guess is better than mine. I’m not prepared to answer anything about it, but give me a few days and I’ll see what I can find.

In the meantime, I do have a curious observation about one of Monday’s rare bright spots. Small cap metal and glass container stocks were up pretty nicely….nearly 1%. I’m not always surprised to see a materials industry rally when the rest of the market sinks. However, Monday was a bloodbath, affecting every corner of the market - except small cap metal and glass container names.

Were it just one day, I might dismiss it. However, this group has had one wild-but-firm rally over the last month….following one wild plunge the month before that. With all that shakin’ going on, I think we at least owe it to ourselves to see if there’s a stock or two we need to look at.

Well, you can thank me later - I’ve narrowed the list down for you. If you get a moment you might want to do some due diligence on Pactiv (PTV), Northern Technologies International (NTIC), Myers Industries, Inc (MYE), Intertape Polymer Group (ITP), Crown Holdings, Inc. (CCK), Greif, Inc. (GEF), and Bway Holding Company (BWY). Here’s a quick fundamental snapshot; be sure to keep reading below for charts of each.

Now just so you know, I didn’t pick those stocks based on their fundamentals. I picked them based on their charts; it just so happens that the fundamentals are pretty good. (Kinda funny how that happens sometimes.)

And speaking of, here are those charts. What do you think?

If any of you have any thoughts or knowledge about any of these stocks, please let us know. The contact form is below.

In the meantime, a significant number of these stocks were heading higher on Monday despite the broad market’s big losses. That ain’t a coincidence, and I can’t chalk it up to a volatile dollar and the threat of inflation. Metal and glass containers…who woulda’ thunk it?

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