Friday Haymaker
Friday Haymaker
Breaking Good
Breaking Bad is the phenomenally popular AMC series about a terminally ill teacher who resorts to making and selling meth to provide for his family after his demise. In today’s Haymaker, we’re going to look at a list of companies whose stock prices have broken out of multi-year trading ranges, usually about three years in duration. One could refer to these as breaking good.
Ironically, one company that is possibly the most superficially alluring name among this promising collection also sells a drug that is both addictive and harmful. That would be Altria, the former Philip Morris (hence the retro symbol, MO).
Before I analyze some of the companies that have experienced upside range expansions, including MO, I would like to relay some housekeeping notes. The first pertains to our Making Hay Monday (MHM) missives. To reiterate, our goal is to satisfy as many of our subscribers, at least of the paying variety, as we can. In that regard, we realize many like to follow our macro, or big picture, views. Others, probably more, are avid trackers of our specific investment ideas. As a result, we’ve been moving to more of a two-tier Monday format, with macro up first and the individual names, or asset classes, coming second. Often there is a linkage between the two. Essentially, we’re attempting to provide both big-picture and highly specific insights. Hopefully, you’ll find this a helpful structure and we do realize many of you are fans of both sections of our MHMs.
The other housekeeping type item is that we’ve had a number of reader questions lately. At the end of this edition you’ll see that we’ve attached a link to our responses for those who care.
Moving onto this Special Edition Haymaker’s main theme, it’s all about breakouts, a big shock (not!), I realize. Yet, as I’ve often conveyed, these are usually more reliable, and rewarding, if they coincide with improving fundamentals, such as accelerating earnings and/or improving industry conditions.
As this newsletter has repeatedly pointed out, many of the stocks or asset classes we’ve showcased that had broken out at the time they were covered, have done very well. In some cases, they’ve been spectacular performers, though, of course, these don’t always work. But the hit ratio has been noteworthy as we described in our April 28th, 2025, MHM.
To attempt to meld technical breakouts with robust fundamentals, I’ve been doing a search for stocks that have achieved fairly recent upward range expansions that also have Value Line earnings predictability ratings of 90 or higher. As you may suspect, that’s an elite group.
All of the below qualify except the last one, Wesdome Gold Mines. It is included because it displays the highly desirable combination of exploding earnings and a definitive technical breakout.
To narrow your focus, here are some of my thoughts on what I feel are the more interesting among them:…
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IMPORTANT DISCLOSURES
This material has been distributed solely for informational and educational purposes only and is not a solicitation or an offer to buy any security or to participate in any trading strategy. All material presented is compiled from sources believed to be reliable, but accuracy, adequacy, or completeness cannot be guaranteed, and David Hay makes no representation as to its accuracy, adequacy, or completeness.
The information herein is based on David Hay’s beliefs, as well as certain assumptions regarding future events based on information available to David Hay on a formal and informal basis as of the date of this publication. The material may include projections or other forward-looking statements regarding future events, targets or expectations. Past performance is no guarantee of future results. There is no guarantee that any opinions, forecasts, projections, risk assumptions, or commentary discussed herein will be realized or that an investment strategy will be successful. Actual experience may not reflect all of these opinions, forecasts, projections, risk assumptions, or commentary.
David Hay shall have no responsibility for: (i) determining that any opinion, forecast, projection, risk assumption, or commentary discussed herein is suitable for any particular reader; (ii) monitoring whether any opinion, forecast, projection, risk assumption, or commentary discussed herein continues to be suitable for any reader; or (iii) tailoring any opinion, forecast, projection, risk assumption, or commentary discussed herein to any particular reader’s investment objectives, guidelines, or restrictions. Receipt of this material does not, by itself, imply that David Hay has an advisory agreement, oral or otherwise, with any reader.
David Hay serves on the Investment Committee in his capacity as Co-Chief Investment Officer of Evergreen Gavekal (“Evergreen”), registered with the Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940. The registration of Evergreen in no way implies a certain level of skill or expertise or that the SEC has endorsed the firm or David Hay. Investment decisions for Evergreen clients are made by the Evergreen Investment Committee. Please note that while David Hay co-manages the investment program on behalf of Evergreen clients, this publication is not affiliated with Evergreen and do not necessarily reflect the views of the Investment Committee. The information herein reflects the personal views of David Hay as a seasoned investor in the financial markets and any recommendations noted may be materially different than the investment strategies that Evergreen manages on behalf of, or recommends to, its clients.
Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this material, will be profitable, equal any corresponding indicated performance level(s), or be suitable for your portfolio. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Investors should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.
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