3 Breakout Stocks Active Investors Should Buy for a Strong Portfolio

Core Insights - An active investing strategy focuses on identifying breakout stocks that trade within specific price ranges, with investors selling when prices fall below the lower band and holding when they break above the upper band for potential gains [1] Breakout Stock Selection - To identify breakout stocks, it is essential to calculate support and resistance levels, where support is the lower bound and resistance is the upper bound of stock movements [2] - Demand for a stock is lowest at the support level, while traders are more inclined to buy at the resistance level, indicating potential breakout candidates [3] Validating Breakouts - A genuine breakout occurs when the previous resistance level becomes the new support level, which can be confirmed through long-term price trend analysis [5] - Correct identification of breakout stocks can lead to significant returns, even if initial prices seem unattractive [5] Screening Criteria - The screening criteria for breakout stocks include: - A percentage price change over four weeks between 10% and 20% [6] - Current Price / 52-Week High greater than or equal to 0.9 [6] - Zacks Rank less than or equal to 2 [6] - Beta for 60 months less than or equal to 2 [7] - Current price less than or equal to $20 [7] - These criteria narrow down the stock universe to 19 candidates, with South Atlantic Bancshares, Crexendo, and Hecla Mining being the top three [7] Company Profiles - South Atlantic Bancshares: Holding company for South Atlantic Bank, expected earnings growth rate of 55.7% for the current year, Zacks Rank 1 [8] - Crexendo: Provides cloud communication services, expected earnings growth rate of 26.9% for the current year, Zacks Rank 2 [9] - Hecla Mining: Engages in precious and base metals production, expected earnings growth rate of 245.5% for the current year, Zacks Rank 2 [10]