Cinemark Holdings (NYSE: CNK), a leading owner of movie theaters, is a recent buy candidate from Leo Fasciocco, whose Ticker Tape Digest seeks stocks poised for technical breakouts.
"CNK an excellent intermediate-term play due to the strong profit outlook. The stock came public in 2007 at $20. It fell during the bear market. The stock formed a bottom, rallied and is now in position to breakout to the upside.
"With annual revenues of $1.8 billion, Cinemark is the third-largest motion picture exhibitor in the United States, operating 4,568 screens in 37 states and 12 Latin American countries.
"The key breakpoint is at $11.03. The stock's momentum indicator is slightly bullish; most important the accumulation-distribution line is in a strong up trend and has already broken out to the upside.
"This year, analysts forecast a 41% surge in net to 68 cents a share from 48 cents a year ago. The highest estimate on the Street is at 81 cents a share indicating some see potential for a big year.
"The stock sells with a price-earnings ratio of just 15. That is well below the earnings growth rate of 41%. So, the stock is very appealing to value-growth investors.
"CNK has plenty of investor appeal, a low valuation, good dividend yield and strong earnings prospects. We suggest entry on a breakout over $11.10. From there, we would be targeting the stock for a move to 15 within the next few months."
Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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