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: