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Bull of the Day: Leucadia (LUK)

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Leading the market out of the gate on Election Day, financials certainly had their day in the sun. The fundamental driving forces behind the move higher were interest rates on the rise and small business optimism. The hope was that Trump’s infrastructure spending and tax plans would provide a huge boost to the domestic economy. Companies in the lending business would be positioned to benefit greatly from these policies.

One of those financials is today’s Bull of the Day Leucadia National LUK. Leucadia is a Zacks Rank #1 (Strong Buy). Leucadia Leucadia National Corporation operates as a diversified holding company that focuses on financial service businesses and investments in the Americas, Europe, and Asia. Its services include equities research, sales, and trading; financing, securities lending, and other brokerage; wealth management; fixed income sales and trading; futures; equity capital markets, debt capital markets, and financial advisory; and asset management services. The company also provides online foreign exchange trading, contract for difference trading, spread betting, and related services.

In addition to the favorable Zacks Rank, Leucadia has Value and Momentum Style Scores of B to go along with a Growth Style Score of B. A big reason for the rank is an analyst has increased their EPS estimate from $1.32 to $1.56 for the current year. The company is also coming off a big quarter where their earnings came in at 37 cents versus expectations for 23 cents per share.

Shares of LUK leapfrogged the 50-day moving average shortly after Election Day. Since then, the stock has rallied from $18 to new highs over $27. The initial surge in price stalled out just over $24. LUK retraced back to the 50-day moving average then found support from buyers. It rallied off that level , broke to new highs, then retested the 50-day again before pushing on through to new highs. Now the Commodity Channel Index is showing the stock is well oversold with the CCI at -177. Traders looking to jump in should wait for the CCI to cross up through the zero line to give a fresh “Buy” signal before loading up.

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