After much due diligence, technical, and fundamental analysis, these are five positions that we are excited about over the course of the next 12 months. The information presented is meant to be looked at from the standpoint of long-term holding.

SKYW

Chart : 1 Year Daily Candlestick Chart

  1. Technical Analysis:
    1. What we see above is the 1 year daily candlestick chart for SKYW. This means each individual candle is one day of price action on this security.
    2. A strong buy point from our perspective would be the 39.50 – 40.00 level. There are a few reasons to back this analysis:
      1. In the past when the RSI seen above has green shaded around the 79.00 level we have seen a downtrend. With the recent RSI green shade we expect a downtrend here to soon follow. On this downtrend, we see a long-term investment initial entry opportunity.
      2. The triple resistance near that 45.00 dollar level shown as the red line on the above chart. When a price fails to cross a resistance point for the 3rd time this typically leads to a downtrend.
      3. Recently, the accumulation is beginning to drop as seen above. Accumulation measures people buying and holding their shares. What this is showing is recent selling/disbursement of shares.
      4. Once this downtrend occurs we expect a bounce off this green line level area (support) and the uptrend to new highs/higher prices.
  2. Fundamental Analysis:
    1. 90.45% of shares are currently held by institutional investors and insiders.
    2. Revenue with current assets represent almost a 2:1 ratio versus the market cap.
    3. SKYW outperformed Q2 2016 Net income by 24.8%.
  3. Summary:
    1. Based off what we have said from a technical standpoint, many are probably wondering why is this a solid long-term investment if we are expecting a downturn. Simple answer to that question: We love the long-term possibilities with this position but why buy high when you can accumulate more shares at a cheaper price? That is the point being presented here –simple dollar cost averaging, accumulate on dips, and build a larger better priced position.
    2. Based off all the information presented above we see a company that is currently very undervalued and after a brief technical retrace to that 39.50 – 40.00 level is even more significantly undervalued which presents a stellar investment opportunity.

 

VIV

Chart : 6 Month Daily Candlestick Chart

  1. Technical Analysis:
    1. What we see here, in our opinions, is a solid reversal already underway. As you can see above (shown by the green line) this position bounced perfectly off its prior support with a reversal hammer and beginning of uptrend.
    2. As seen below there are several other indicators here showing a strong reversal in progress. The STO and Williams have all shown reversals from these technical markers.
    3. Unlike SKYW we see VIV as a solid buy right at this moment and continuation/uptrend to new highs/prices.
  2. Fundamental Analysis:
    1. Current market cap of 17 billion versus assets minus liabilities of 21.5 billion.
    2. Increase of revenue of 24.79% from Q2 2016 – Q2 2017.
    3. Company has set aside 565 million to complete a buyback of common and preferred shares until December of 2017.
  3. Summary:
    1. With increasing revenues, plans to buy back shares, and strong technical bounce underway we see this as a solid long-term investment possibility.

 

PNNT

Chart : 6 Month Daily Candlestick Chart

  1. Technical Analysis:
    1. The main aspect, technically, we are seeing here is an impending golden cross. A Golden Cross is a technical indicator that represents the 50 SMA (blue line) crossing through the 200 SMA (red line). This is well-known as a very bullish indicator and leads to what we call the price being dragged upwards.
    2. We are also seeing increased volume/money flow represented in this current uptrend. We are nearing an important resistance represented by the first red line. This resistance represents the beginning of the gap fill and will be very bullish if broken as we expect.
  2. Fundamental Analysis:
    1. Most recent 10Q released August 7th seemed to be received in a favorable fashion reflecting the company’s 1.36% net increase in assets.
    2. This increase in net assets can be greatly attributed to the 62.49% decrease they had in realized loss on investments.
    3. Dividend yield of 9.59%
    4. Recent Form 4 buying. Form 4 buying is when company upper management is acquiring more shares of their own company. This typically occurs if the company is expecting continued positive results and increase in PPS.
    5. Market Cap trailing net assets by 22.29%.
  3. Summary:
    1. With the impending golden cross more than likely signifying a future technical uptrend mixed with improving financials, PNNT could be a force to be reckoned with. The dividend yield reflected here just decreases the risk of a large long-term investment to an even greater degree.

 

NXEO

Chart : 6 Month Daily Candlestick Chart  

  1. Technical Analysis:
    1. A few interesting things are happening here. First note the nice uptrend since the RSI red shade that occurred and seeing that accumulation continually rise to higher levels. This is showing people are not only loading but holding as well.
    2. We have a key test coming up at the SMA 50 (Blue line) which will really decide the longer term fate of this chart –which, in the end, we believe will be a positive outcome.
    3. The biggest aspect that stood out to us on this chart is the possible cup and handle being formed as seen above. This is a very bullish chart pattern and what may ultimately lead to a healthy long-term gain here.
  2. Fundamental Analysis:
    1. Recent form 4 buying bringing institutional holdings up to a staggering 94.66%
    2. Recent filings showing the company turning a profit of 10 million in Q2 2017 versus 15 million in losses this same quarter last year.
    3. Current market cap undervalued by 15.66% based off assets.
  3. Summary:
    1. With the cup and handle represented above and the past success we have had with this chart pattern, along with the company turning a profit, we like the potential for future success.

ERJ

Chart: 6 Month Daily Candlestick Chart

  1. Technical Analysis:
    1. The main point we noticed, once again, with this stock is the golden cross. One of the more bullish indicators and personally one of our favorites to see on a chart.
    2. Near term indicators to monitor would be this resistance area around 24-24.50. A solid break of this resistance area would lead to much higher highs in our opinion.
  2. Fundamental Analysis:
    1. The main point here is definitely what we see fundamentally and sector wise. This is a strong aerospace and defense company located in Brazil but does the majority of its business within the United States.
    2. This Sector has seen significant gains since President Trump has taken office due to the large allocations towards that sector.
    3. Recent increased institutional holdings of 2.55% bringing the total to 50.21%.
    4. Current assets of approximately 12 billion.
    5. Showing Q2 2017 net income of 70.5 million versus a loss of 104.8 million the same quarter a year prior.
    6. Recent 1.1 billion dollar deal signed with SKYW, another long-term position already discussed.
  3. Summary:
    1. We like ERJ with a break of this resistance, shown above by the red line. With the golden cross that is now occurring, recent deal with SKYW, and improving financials, ERJ will be on our radar for some time to come.

 

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Initial Research by Jordan V; Technical Analyst
You can follow him on Twitter @Linchp1n

Technical and Fundamental Editing by Alex S; Owner/Founder
You can follow him on Twitter @SUNNYLAND24

Compiled/Proofread by Noëlle H; CTO/Site Administrator
You can follow her on Twitter @subliMINXal

**Disclaimer: Sunnymoneyfamily.com encourages readers and investors to supplement the information in these reports with independent research and other professional advice. This is independent research done by our team but also contains many opinions. Always be sure to trade at your own risk and your own loss. Sunnymoneyfamily.com is not a Registered Investment Adviser, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever and we are not qualified to give financial advice. Investing/trading in financial securities is highly speculative and carries an extremely high degree of risk. For further clarification, please see Terms and Conditions.**

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