The Iconoclast Investor

While they don’t offer anything revolutionary, I’ve always been interested in what we at Cabot call “bull market stocks”–those companies whose businesses are directly tied to the fortunes of Wall Street.  Thus, in a bull market, their sales and earnings are almost guaranteed to grow dramatically … in a bull market, that is.  Examples include brokers, trading firms, mutual fund managers and the like.

Well, lately, I’ve seen some snazzy action from many of these stocks.  I wouldn’t say they’re off to the races, but a look at the charts below show some solid launching pads being built.

Blackrock (BLK) is partly owned by Merrill Lynch, and whether it decides to sell a chunk might have an effect on these shares.  But there’s no denying the big volume off the bottom, and recently, the tight weekly ranges, a sign of accumulation.  Of all the bull market stocks, BLK is the closest to its old peaks, an early sign of leadership.

T. Rowe Price (TROW) and Janus (JNS) have also popped on big volume the past couple of weeks.  Each firm’s growth doesn’t wow me, but again, if a bull market emerges, these firms will trounce estimates for next year.

These types of firms are rarely the huge, headline-grabbing winners of a bull market, but with their straightforward stories and leverage to a rising market, they can still provide juice to your portfolio … when the bulls take control of the market.  Keep them on your watch list.