Market Overview

Papa John's, US Airways and Other Top Performers in May

Related AFCE
UPDATE: Jefferies Initiates Coverage on AFC Enterprises on Meaningful Growth Story
Earnings Scheduled For November 13, 2013

Here is a quick look at some of the top-performing service sector stocks in May. These companies all have a market cap of more than $500 million and their share prices are all more than 15% higher than 30 days ago.

AFC Enterprises (NASDAQ: AFCE) shares are trading more than 45% higher year to date, including up about 23% in the past month. The recent first-quarter report of the Atlanta-based franchiser and operator of Popeyes restaurants sent shares to a multiyear high. AFC has a long-term EPS growth forecast of 12.0% and a return on equity of 163.2%. Over the past six months, the stock has outperformed competitor Yum! Brands (NYSE: YUM) and the broader markets.

See also: AFC Enterprises Posts Upbeat Q1 Profit, Lifts Full-Year Forecast

The Fresh Market (NASDAQ: TFM) is trading more than 45% higher than at the beginning of the year after a surge of more than 23% in the past week to a new high. The supermarket chain operator just posted its fifth-consecutive quarter of double-digit revenue growth. The $2.8 billion market cap company has a long-term EPS growth forecast of 21.0%. The stock has outperformed rival Kroger (NYSE: KR) and the broader markets over the past six months.

Liquidity Services (NASDAQ: LQDT) is more than 206% higher than a year ago and recently hit a multiyear high. The operator of online auction marketplaces reported better-than-expected results for the most recent quarter. The Washington, DC-based company has a long-term EPS growth forecast of 29.7% and a return on equity of 21.9%. Over the past six months, the stock has outperformed eBay (NASDAQ: EBAY) and the broader markets.

Pandora Media (NYSE: P) is up more than 25% in the past month but only up a little over 7% year to date. The Internet radio company beat top line and bottom line estimates in its most recent report. The company is based in Oakland, Calif., and has a market cap of $1.7 billion. Its long-term EPS growth forecast is 43.7%. Short interest is 11.8% of the float. The stock's performance has been in line with Sirius XM Satellite Radio (NASDAQ: SIRI) over the past six months.

See also: Stocks to Watch for the All Things Digital Conference

Papa John's International (NASDAQ: PZZA) is up almost 18% in the past month, but has pulled back more than 7% from a recent multiyear high. This Louisville, Ky.-based pizza purveyor exceeded consensus estimates for the first quarter and raised its full-year guidance. It has a market cap of %1.1 billion. Its P/E ratio is less than the industry average and the return on equity is 25.8%. The stock has outperformed rival Domino's Pizza (NYSE: DPZ) over the past six months.

Sonic (NASDAQ: SONC) is more than 26% higher year to date but still about 27% below the 52-week high. Analysts predict that it will post results that are essentially flat for the current quarter and for the full year. The drive-in restaurant operator is based in Oklahoma City. Its operating margin is higher than the industry average. Over the past six months, the stock has outperformed larger competitors McDonald's (NYSE: MCD) and Wendy's (NASDAQ: WEN).

US Airways Group (NYSE: LCC) is more than 160% higher year to date and reached a new multiyear high yesterday. The Tempe, Ariz.-based airline rose as analysts upgraded the industry due in part to lower fuel costs. It has a $2.1 billion market cap and a P/E ratio of 10.6. The long-term EPS growth forecast is 38.5% and the return on equity is 275.3%. The stock has outperformed competitors such as Delta Air Lines (NYSE: DAL) and Southwestern Airlines (NYSE: LUV) over the past six months.

See also: Trade Setups To Watch on Friday, June 1

ACTION ITEMS:

Bullish: Investors also might want to consider the following trades:

  • ProShares Ultra Consumer Services (NYSE: UCC) is up more than 21% year to date.
  • iShares Dow Jones US Consumer Services (NYSE: IYC) is up more than 10% year to date.
  • EGShares Consumer Services GEMS ETF (NYSE: VGEM) is up more than 2% year to date.
Bearish:

Traders may prefer to consider these alternative positions:

  • ProShares UltraShort Consumer Services (NYSE: SCC) is more than 8% higher than a month ago.
  • ProShares UltraShort Consumer Goods (NYSE: SZK) is more than 8% higher than a month ago.
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Posted-In: AFC Enterprises Delta Air Lines domino's pizza EBAYLong Ideas Short Ideas Trading Ideas ETFs Best of Benzinga

 

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