Top 6 Stocks for October


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A Few Good Value Stocks

In mid-September, stocks broke through the top of a trading range that had stubbornly resisted both buyers and sellers for five months. But instead of the breakout being accompanied by high volume with emphasis on blue-chip stocks, the rally has lacked volume and is currently being led by lower-quality stocks. This conundrum has perplexed even the most experienced technicians and fund managers.

September turned the best performance in 71 years, with the major indices rising over 8%, but stocks now appear to be grossly overbought. Investors should consider locking in their gains by selling or using options strategies to stabilize their holdings. This is no time to be a hero by buying at the top. However, despite the short-term overbought nature of the market, there are always bargains to be found if you look hard enough. The six stocks to buy listed here represent extraordinary value even in the current market condition.

Top Stocks to Buy for October

Top 5 Stocks for the Fourth- Quarter Surge

Top Stock #1: Cliffs Natural Resources (CLF)

Cliffs Natural Resources Inc. (NYSE: CLF ), formerly Cleveland-Cliffs Inc., is an international mining and natural resources company that produces iron ore pellets and metallurgical coal. CLF should benefit from a strong market position in North America and a platform for expansion to Asia.

Technically the stock is in a powerful bull market, holding above both its bullish support line and 200-day moving average . Within the past month, two buys signals were triggered from our internal indicator, the Collins-Bollinger Reversal (CBR), and on Sept. 27, the stochastic issued a buy signal. The technical target for CLF is $75. S&P rates the stock a "four-star buy" with a 12-month target of $78.

Top Stock #1: Cliffs Natural Resources (CLF) Top 5 Stocks for the Fourth- Quarter Surge See Key

Top Stock #2: Sanmina-SCI Corp. (SANM)

Sanmina-SCI Corporation (NASDAQ: SANM ) is independent global provider of customized, integrated electronics manufacturing services. The stock has been in an intermediate downtrend since April, but recent accumulation and a host of buy recommendations from more than 20 analysts puts this stock back in the spotlight.

SANM recently crossed over its 50-day moving average, and its stochastic flashed a buy. Since it is technically still in a downtrend, stop-loss orders at $10 should be entered. The average target of the fundamental analysts is $24, and S&P rates the stock a "five-star buy" with a 12-month target of $20.

Top Stock #2: Sanmina-SCI Corp. (SANM) Top 5 Stocks for the Fourth- Quarter Surge See Key

Top Stock #3: Stanley Black & Decker (SWK)

Stanley Black & Decker, Inc. (NYSE: SWK ) is the largest producer of power tools and accessories with brands such as Stanley, Black & Decker, FatMax, DeWalt, Bostitch, Porter-Cable, Facom, Emhart Teknologies, Proto, Kwikset and Mac Tools. Sharp sales growth following the acquisition of Black & Decker in March 2010 focuses the company on the construction and do-it-yourself segments.

Credit Suisse has an "outperform" rating on SWK with an earnings estimate of $6.11 for 2012. Their price target is $72. Technically the stock is holding above both its 200-day moving average and its bullish support line. A break above $65 supports a price target of $73.

Top Stock #3: Stanley Black & Decker (SWK)

Top 5 Stocks for the Fourth- Quarter Surge See Key

Top Stock #4: Tenet Healthcare Corp. (THC)

Health care services company Tenet Healthcare Corporation (NYSE: THC ) operates 50 general hospitals and a critical access hospital serving urban and rural communities in 12 states. It was recently listed by CNBC as No. 3 on its list of "20 Stocks With the Potential to Pop."

THC is recommended by 20 analysts with a mean target of $6.96.

Technically its stochastic issued a buy signal and three recent CBR buys were triggered. A break above $4.60 would yield a target of $6.

Top Stock #4: Tenet Healthcare Corp. (THC) Top 5 Stocks for the Fourth- Quarter Surge See Key

Top Stock #5: Titanium Metals Corp. (TIE)

Titanium Metals Corporation (NYSE: TIE ) is a producer of titanium melted and mill products for commercial, aerospace, military and industrial applications. Ford Equity Research has a "strong buy" recommendation on TIE based on earnings strength, relative valuation and recent price movement.

Technically the stock has held well above its 200-day moving average and is supported by a strong bullish support line. It has been accumulating significant buying volume, and the stochastic and CBR recently issued buys. The technical target for TIE is $23, and within 12 months it could exceed $26.

Top Stock #5: Titanium Metals Corp. (TIE) Top 5 Stocks for the Fourth- Quarter Surge See Key

Top Stock #6: V.F. Corp. (VFC)

V.F. Corporation (NYSE: VFC ) is a global apparel company that designs and manufactures a variety of apparel and footwear for all ages. The company is transforming the denim and daypack area with lifestyle apparel brands, according to Standard & Poor's. And its Vans and North Face brands are viewed as growth drivers, along with its new store growth in Asia.

S&P has a 12-month target of $106 and a "five-star strong buy" rating on the stock. VFC has been consolidating for over a year between $70 and $86, but a recent double-bottom and a pending breakout from that pattern, and a stochastic buy are very powerful signals that this stock could make a run to over $90.

Top Stock #6: V.F. Corp. (VFC) See Key

Top 5 Stocks for the Fourth- Quarter Surge - Louis Navellier details five stocks set to deliver record earnings this October, and jump 30%-50% in the next 90 days as the big money piles in. Get their names online here, including Louis' buy-below and target prices.

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

This article appears in: Investing Stocks
Referenced Stocks: CBR , CLF , SANM , SWK , THC , TIE , VFC

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Sam Collins

Sam Collins

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