Get in Before It's Too Late
On May 18 I identified Applied Materials (AMAT), a semiconductor capital equipment maker, as being one to watch. At the time, I acknowledged that it looked as though the company's backlog had bottomed, which tends to signal a good buying opportunity for patient investor in cyclicals, as well as in growth cyclicals such as Applied Materials. I stopped short of recommending that investors buy the shares then and there, because the backlog stabilization had occurred for only a quarter -- meaning that it could resume falling.
For a fitting comparison, back in the fall of 2010, and again last October on Real Money, I positively wrote up railcar maker Trinity Industries (TRN) -- another name in a cyclical industry. One of the key indicators that initially enabled me to get behind Trinity shares was a stabilized railcar industry and a Trinity-specific backlog level, followed by increasing orders and rising backlog levels....432 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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