Swisher Hygiene helping investors clean up

Apr 11th, 2011 – Comment

As long as the company can continue to roll up players in the cleaning and maintenance space the stock looks like it has more room to grow.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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I bought this stock when it still was called Coolbrand (COB.TO). Since they merged with Swisher last September the stock has doubled.

My question is, should I sell and lock in the profit, wait or buy more? Your expert advise (as always) would be greatly appreciated.
Thanks
Bob

Hi Bob,

I last posted research regarding  Swisher Hygiene Inc. ( SWI TSX) on September 24,2010 when it was trading at $3.78. At the time I mentioned that you didn’t want to be betting against Wayne Huizenga the serial entrepreneur who has created a number of Fortune 100 companies.

 Since the deal with Cool Brands was completed SWI has been raising money and buying companies at a rapid pace. The frenzy of acquisitions has been the fuel driving the stock higher. As long as the company can continue to roll up players in the cleaning and maintenance space the stock looks like it has more room to grow. The charts will provide guidance as to the future potential of SWI.

The three year chart illustrates the rapid and continued rise in the price of the stock since August of 2010. The stock pulled back in November of 2010 as it hit $6.00 retreating to $4.00 in December. But after that it got back onto an uptrend, consolidated until late March at $6.00 amd then took off in April of 2011.

The six month chart provides a sharper image of the movement in SWI. The MACD has been providing a series of buy and sell signals since November of 2010. The sell signal in November at $6.00 ,followed by the buy signal in December at $4.00, another sell in February at $6.50 and the buy in March at $5.75.  All of these trades generated great opportunities to clean up with SWI.

As of this post the RSI is clearly indicating that the stock is overbought but not yet pulling back while the MACD has yet to rollover. But that doesn’t mean it won’t. I wouldn’t bet against Huizenga but I also wouldn’t want to buy and hold this stock. SWI is providing attractive trades while it advances and it is also generating effective signals ahead of its moves.  To your question regarding taking a profit I would say yes but think about a strategy of selling on advances and buying on pullbacks.

Happy Capitalism!

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