Here’s your trade on Palomar Holdings ($PLMR) – October 2, 2024
Dan Fitzpatrick here at StockMarketMentor.com. I want to look at Palomar Holdings ( NASDAQ: PLMR ). It’s an insurance company, they do specialty property, personal, and commercial property insurance.
The company has some smoking hot fundamentals, we’ll look at those briefly, and I’ll tell you how I found this stock. I’ll do some searches, I have a lot of scans based on a combination of fundamentals and technicals. I have several lists over on Stock Watch, which is a tool that I have for our members to find various stocks that I think are poised to continue to move higher and Palomar ( NASDAQ: PLMR ) is one of them.
If you are looking at it here, you can see you’re not exactly early. However, I like the way this stock has been drifting sideways here. It hit the 50-day and bounced, it even ran above it here. July is the first time where it broke through the 50. It bounced off the 50 here, it bounced here and didn’t even get the 50. It came down to the 50 here and it bounced.
Yesterday, the stock hit the 50 and closed below it. But today, it gapped down a little bit, and then traded higher, and it’s back above it. So I look at this and I feel like this could be a pretty good opportunity to start a position in a stock and have it be a pretty low entry, a low risk.
If you’re buying it here, you can put a stop really, really tight if you want to. Or maybe put it below this intraday low here of 91.14, back when it hit the 50 before. And so, you’re buying it here, you’ve got your stop down here, that’s 4 percent if you want to give it that much room to run, however, you want to do it.
I’ll show you what I see on MarketSurge here. I personally like the TC2000 charts better, I’ve been looking at them for 35 years, for a long time, but this totally does the job too. You see the pivot points here, this is right back down to the top of this pivot point, so it’s at a good pullback buy entry.
But if you look at these three rows along the bottom, Earnings, Sales, and Gross Margins, these numbers are compared to the same quarter of the prior year. And so for example, Earnings back in September 2023 jumped up 156 percent at 92 cents. That’s 156 percent higher than the prior September of 2022. Do you see what I mean?
This is the current number, 111.00, 109.00, and 125.00. Then compared to the same quarter the prior year is what we have here on these. So you can see a 156 percent jump from here up to here. A 35 percent jump from here up to here. A 36 percent jump from here up to here. A 45 percent jump from here up to here, that’s the same quarter in 2023.
We like to see all green stuff, we like to see double digits, and that’s what we’re seeing here. So this has got a really, really strong fundamental profile. The accumulation distribution rating is a B-, that’s fine with me. It means institutions are buying the stock. The growth rate is 3-5 years, 36 percent, guys, it’s an insurance company.
An insurance company that’s growing 36 percent annually, I’ll take that. I’m surprised Warren Buffett hasn’t bought this thing. Then we look at the weekly chart and now you can see graphically, this Earnings line here, throughout the years. This is in sync with the price, a nice run higher in earnings, and a nice run higher in price.
I’m looking at this stock, frankly, you could look at it as a trade, you can totally look at it as a trade. Buy it here and look to sell it when it comes up here or something. But I think it’s a stock that you could actually start building a position in. Certainly trade around some stuff, but maybe just tuck a few shares away and save it for a rainy day.
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