Indicator Signals Unknown Small Cap Is An Immediate ‘Buy’

Today, I’m going to do something I don’t usually do…

For those of you who don’t know me, I’m the chief investment strategist of Profitable Trading’s premium Alpha Trader service. 

I am a Chartered Market Technician (CMT) with more than 20 years of trading experience and a profitable history of using trading systems to manage money for investors.

The Alpha Trader system combines proven technical and fundamental indicators to find market-beating investments for 10 different portfolios. And today, I’m going to share one of the picks I just recommended to my subscribers.

It comes from our Doublers Portfolio, which covers top-rated small-cap stocks likely to double in the next 12 months.

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If you’re not an Alpha Trader subscriber, I’d venture to say you’ve never heard of this company, but it’s hitting it out of the park with its nut business. 

That’s right — nuts. 

John B Sanfilippo & Son (Nasdaq: JBSS) processes, markets and distributes nuts like pecans, cashews, peanuts, walnuts and almonds in dry roast, oil roast, salted, unsalted, trail mix, chocolate and yogurt-covered varieties under the Fisher, Orchard Valley Harvest and Sunshine Country brands.

It may not sound exciting, but there’s big money at play.

In the past four quarters, the company saw average year-over-year earnings growth of 45%, while sales growth averaged in the double digits as well.

The Alpha Trader system first alerted me to this relatively unknown small cap in late May. 

Its financials were solid, the company had just reported a blowout quarter and the price-to-sales (P/S) ratio was a minuscule 0.65. Technically, the stock was emerging from a large cup-and-handle base.

But most importantly, its Alpha Score of 160 (out of a possible 200) put it in the top 10th percentile of all companies in my database.

The Alpha Score is one of the most powerful indicators I have used in my two-decade career. It was designed to pinpoint stocks about to jump double and triple digits in the coming days, weeks and months.

It consistently beats the market with less risk than buy-and-hold investing, and JBSS is a great example.

The Alpha Score signaled a buy for JBSS on May 26. Traders who heeded its call bought in just below $52 and are now up 34% on the position. This handily beat the market, which is down more than 5% in the same period. 

But I think the gains are just getting started, which is why last week — in a first time ever for the Alpha Trader service — I re-recommend a stock.

Despite the harsh market selling since the beginning of the year, JBSS has held up amazingly well. Since my original recommendation, shares built a nine-month base.

On Jan. 28, following an earnings announcement in which the company reported a record quarterly profit, JBSS gapped up and made a new all-time high. Since then, it has continued higher, showing exceptional strength and offering a new tactical entry point.

JBSS Stock Chart

In addition to its technical strength, analysts have been upping their earnings estimates for John B Sanfilippo & Son and now project EPS will grow more than 40% this year.

But the main reason I am so bullish on JBSS going forward is that its Alpha Score has jumped from 160 to 185. It’s so high, in fact, that it now falls in the top 2% of all stocks in my database.

Given the technical and fundamental strength and sky-high Alpha Score, I believe JBSS can roughly double from our initial entry point and hit $100. Traders who get in now stand to make a nearly 45% profit if that target is reached.

If you’re interested in using the Alpha Score to uncover more stocks like this, I can show you how it works. 

However, part of its power comes from the fact that most people don’t know about it. Once an indicator is widely known, everybody starts using it and it loses its edge. 

So you have a limited time to access this presentation. Click here before it comes down.

This article was originally published on Profitable Trading: Indicator Signals Unknown Small Cap is an Immediate ‘Buy’​