It’s been a volatile year already in the stock market. We’ve seen a move straight down from January 1st to the 20th, a whipsaw higher and retest of the lows in mid-February, followed by a rip your face off rally to 2,056. With all the back and forth action, it’s been hard to key in on a winner in this market. I bet you’ll be surprised when you hear which sector has led the market YTD. As of the close Thursday, the top performing sector this year has been Utilities with a 12.6% return.
Today’s Bull of the Day has quietly been coming on strong all year in a business that relates to this sector in a unique way. Mistras Group (MG – Snapshot Report) helps companies ensure the integrity of their products and processes in the most cost effective fashion possible. Mistras Group provides comprehensive Non-Destructive Testing services to a broad range of industries, including power generation, sanitation, refineries, pipelines and smart grids. To sum it up, Mistras Group helps utilities and refineries keep tabs on their infrastructure to make sure everything is working the way it should.
The company is coming off a couple of huge earnings beats in a row. Last quarter EPS came in at 39 cents, a full 11 cents ahead of our Zacks Consensus Estimate. The quarter before that MG saw 23 cents EPS versus expectations for 9 cents. The beats forced analysts to up their expectations for earnings for the current year and next year. The bullish sentiment has increased the Zacks Consensus Estimate from 71 cents to 82 cents for the current year and increased next year’s forecast from 78 cents to 92 cents.
The stock has been on a rampage since October when it gapped up from $14 to nearly $20 in one day. A volatile winter saw shares gyrate between $18 and $22.50. Since the market bottomed in February, MG has taken an upwards trajectory. The commodity channel index has remained above the zero line and shares have been increasing their distance from the 50 day moving average. With a 1.2% move on Thursday the stock is butting up against resistance from the July 2014 high. A breakout from this level would mean $30 is right around the corner.
