Monday’s TSX breakouts: This stock has jumped during the market tumble

There are just four stocks on the positive breakouts list; however, the list of negative breakouts has been nearly cut in half to 58 stocks, down from 114 names the previous day.

While energy stocks dominate the negative breakouts, at 30 per cent of the names, what is disturbing is the large number of financials on the negative breakouts list, which now stands at 24 per cent., with blue-chip financial stocks like the Royal Bank on the list.

The broader index, the S&P/TSX composite index is now in oversold territory from a technical analysis perspective. The relative strength index is just below 30. Generally, a reading at or below 30 indicates an oversold condition. However, that is not to say that the index cannot remain in an oversold territory for some time.

On a valuation basis, the S&P/TSX composite index is now trading at a forward price-to-earnings multiple of 14 times the 2016 consensus estimate, below its historical multiples. The three-year forward p/e multiple is 16 times and the five-year forward multiple is 15 times.

Surfacing on the positive breakouts list is Progressive Waste Solutions (BIN-T), with is listed on both the Toronto Stock Exchange as well as the New York Stock Exchange under the same ticker. A brief overview is provided below that may serve as a springboard for further research.

Progressive Waste Management is in the garbage business. It provides non-hazardous waste and recycling collection and disposal services to commercial, industrial, municipal and residential customers in Canada as well as in the United States, and is one of North America's largest waste-service providers.

The catalyst that really got the stock moving recently was the Jan. 4 announcement by the company that it was reviewing "strategic alternatives" in order to unlock shareholder value, leaving investors wondering if this strategic review could result in a future sale of the company or perhaps part of the company. The stock price has jumped nearly 9 per cent during the first five days of the new year, while equity markets have tumbled.

Dividend policy

Management announced a 6-per-cent increase to its quarterly dividend this summer. The company pays shareholders a quarterly dividend of 17 cents per share, or 68 cents per annum, equating to an annualized yield of 1.9 per cent.

Analysts' recommendations

According to Bloomberg, there are eight analysts with buy recommendations, seven analysts with hold recommendations, and two analysts with sell commendations with the average price target at $38.65, implying a move higher in the stock price by 9 per cent.

The consensus EPS estimate is $1.26 (U.S.) in 2016 and $1.47 (U.S.) in 2017.

Technical analysis

The year-to-date rally in the stock price has been on high volumes, a positive technical sign.

The stock has downside support around $34, near its 200-day moving average. There is upside resistance around $36, and then near $38.

As always, I strongly encourage readers to consult a financial advisor, and to do their own proper due diligence before taking any investment action.

Below is a list of stocks in the S&P/TSX composite index and the S&P/TSX Small Cap index that are technically breaking out, reaching new 55-day highs or lows. Stocks on the positive breakouts list have displayed positive price momentum during this period. Stocks on negative breakouts list have experienced negative price momentum.