The Iconoclast Investor

An investor with a system knows that research never stops.  Even when there’s no buying going on, the preparation for buying has to continue.  So here’s an idea for your growing watch list of stocks.

My investing idea is Icon (ICLR) an Irish company that provides support for pharmas, biotechs and medical device makers that need help with product development, research and clinical trials.  Icon has been consistently profitable, with positive earnings for more than a decade.  And after a modest rough patch in 2004–05, the company has booked 11 straight quarters of earnings growth, finishing with a 35% pop in earnings on a 48% gain in revenues.

The biggest attraction, for me, is the stock’s status as a tractor, a stock that just keep on grinding out gains, rain or shine.  Since the stock bottomed at 9 in late 2005, it has worked its way to 40 with not a single 20% correction!  That’s an impressive record.

The stock hasn’t shown up in any Cabot growth advisories because its trading volume (it averages just 267,000 shares a day) is too low for our screens.  However, since the trading volume screen is mainly there to eliminate excessive volatility, and ICLR hasn’t had excessive volatility, it seems like a wash.

Medical companies have been a moderately bright sector in this gloomy market, and Icon’s position as a supporter of research insulates it from the huge moves that drug makers can experience.  With a P/E of 37, it’s not cheap, but great growth stocks never are.  A record number of institutional investors have snapped up 19 million of ICLR’s 46 million share float.  The stock just split 2 for 1, which sometimes marks a temporary price peak, but there are no signs of a correction as of yet.