Anatomy of Success: Short-Term (LXU) - Anatomy of Success

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Sometimes, getting into a good stock is the easy part. It's the 'staying in' that can sometimes prove to be most difficult. Investors talk themselves out of good trades all the time.

The Zacks Rank, of course, helps you find and get into the top performers. But also, with clear steps, it can show you how to stay in the most profitable ones.


LSB Industries ( LXU )

LSB Industries is a mid-cap blend (growth and value) stock in the Diversified Operations Industry. They manufacture and sell chemical products for a wide range of industries including the agricultural, industrial and automotive industries.

Even though it's a 25 year old company, it's not one of those names most investors are familiar with. But it's definitely a name Zacks customers are now familiar with after embarking on a 36% gain in less than 2 ½ months.

On July 20th, 2012, LXU, which had been in a trading range for months, got the signal that alerted investors that it was finally ready to breakout. That signal was the Zacks Rank #1 (Strong Buy), which forecast that it would outperform the market over the next 1-3 months.

At that time, it was trading at $32.03 with a 12 Month Forward Earnings Estimate of $3.75. Two and a half months later, and a series of upward earnings estimate revisions (see the green line in the chart below), LXU had retained its Zacks Rank #1, and gained for its investors a 36.97% return vs. the S&P 500's mere 5.73%.

When earnings estimates are going up, the stock should go up as well. In short, the price should follow the earnings estimates.

Overcome self-doubt and trade with confidence by focusing on the Zacks Rank and the most important factor influencing stock prices - earnings estimate revisions. When estimates start heading down that's your cue to get out. When estimates are going up that's when it's time to sit back and enjoy the ride.

Click here to find more Zacks Rank #1 stocks.

Disclosure: Performance information for Zacks' portfolios and strategies are available at: http://www.zacks.com/performance .



LSB INDS INC (LXU): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: LXU

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