Skip to main content

Posts

Showing posts from December, 2010

Is CSC on the verge of better things?

Computer Sciences Corp (CSC) popped up this weekend on one of our screens at Alert HQ Premium. It was on the short list of stocks that had just raised their dividend and that showed value stock characteristics.

CSC just increased their dividend by 33%, going from $0.60 to $0.80. The valuation measures are quite attractive: trailing PE less than 10, PEG = 1.12, Price to Sales less than 0.5, Enterprise Value/EBITDA less than 4.

Better things on the way?

First, the technical picture. CSC appears to be in the process of breaking out. It has pushed above its 200-day moving average. In addition, its 50-DMA has achieved a bullish crossover above the 200-DMA though, truth be told, by only one penny. The chart below shows the situation. Another half a buck and the stock will be breaking above the previous recent high. That higher high would be a confirmation of a bullish trend..

=
Looking back at the company's financials over the course of the last year, the results have not shown accelerati…

IT spending to increase in 2011 -- how should you invest?

A big part of overall technology industry profit is driven by spending in the Information Technology sector. Information Week recently released the results of a survey that provides a glimpse into 2011. The following chart summarizes the results of the survey:


The good news is that a total of 55% of of the 552 respondents do expect to see budgets and spending rise next year. Last year the number was 45% so we see continued improvement. Only 19% expect to cut IT budgets compared to 24% of respondents in the previous survey. Finally, 26% expect to keep budgets flat compared to 30% previously. The biggest increase was seen in the group expecting to increase spending to rise 5% to 10% which went from 16% up to 27%. Supporting these budget expectations is the fact that 59% of respondents report growing demand for IT services at their companies.

This next chart shows where IT investments are expected to be made:


In general, every category is expected to see a modest increase. At the top of …

Intevac -- breakout in progress, more room to run?

One of the stocks that popped up on Alert HQ earlier this week is a tech stock that looks a lot like a value stock. I'm talking about Intevac (IVAC).

Intevac is a small cap stock that has broken out in a big way. It's up over 50% from its most recent low in mid-September. The question is, however, is it now over-priced?

First, let's take a look at the weekly chart:


You can see that it's gone from around $9 to almost $15 which is a sizable move. A pull-back seems almost inevitable. Yet, after that potential pull-back runs its course, there could be room for further gains. Here's why:

The basic scenario is that this stock currently looks like a value stock. If it is perceived to be a growth stock, then there is opportunity for its multiple to increase.

Let's take a look at the financials and establish its value qualifications. Here are some valuation characteristics:
Trailing PE is 11.48, which is quite reasonable for a tech stock. Forward PE is 17.61 which is not…

We'd like to hear what you have to say!

For anyone who has tried the Trade-Radar Stock Inspector, I have set up a facility that will allow you to give your opinion. I now have a survey page available.

Basically, I am very interested in hearing what new features users might like as well as anything that users feel really needs improvement.

Even if you are not a user of the software but would consider using it if it could do something you need, go ahead and tell me your ideas. I am open to all suggestions.

The survey page is available on the drop-down menu associated with the "Stock Inspector" menubar item. Or, you can just click on the following link:

Take the survey now!
With the current version of the software fairly stable, it is time to look for improvements. I look forward to hearing your ideas.

ETF Trending Report -- one sector to avoid, one sector to consider

One of the first things I like to check every weekend is the ETF Trend Performance week-over-week report. It gives a great summary of what happened to more than 300 ETFs with respect to change in trend. (It is currently available at the free preview of Alert HQ Premium.)

Some weeks, ETFs in certain sectors dominate the top spots or the bottom spots and in other weeks it's a mix. This week it's pretty clear who the biggest winners and losers were.

The winners --

Financial ETFs held the top four spots this week. The following chart is from the report:

Change in Trend Score Symbol Name Current Trend Score Change in Price Percent Change in Price3UYGProShares Ultra Financials ETF 5.54.056.712.25IYGiShares Dow Jones U.S. Financial Services Index Fund 4.252.554.672RKHMerrill Lynch Regional Bank HOLDRS 44.025.051.5XLFSelect Sector SPDR Fund - Financial 4.750.583.82
Given the highest possible trend score is only 6 (denoting a very strong bullish trend), an improvement of between …

How much longer for the semiconductor rally?

Two of the leading ETFs on the Trade-Radar ETF Scorecard report at Alert HQ Premium are semiconductor ETFs, specifically the Merrill Lynch Semiconductor HOLDRS (SMH) and the ProShares Ultra Semiconductors (USD).

Both of these ETFs carry the highest possible score for maintaining a bullish trend. As an example, take a look at the chart of SMH below:


How long can this go on?

KPMG conducted a global survey of semiconductor executives. Most of the results are quite positive. Executives expect mid-single digit improvements in hiring, R&D and profitability in 2011 compared to 2010. That sounds good but in actuality, 2010 was a very strong year and the outlook for 2011, while quite decent, reflects a potential moderation in the pace of growth.

In particular, the surveys indicates only 39% of executives expect revenues to increase by 10% or more whereas 54% expected 10% revenue gains in 2010. Similarly, 37% of respondents anticipate profitability growth in excess of 5% for 2011, while a y…

Labor shortages in the most populous nation on earth?

Earlier this year there were a series of articles in several mainstream newspapers and magazines and on a number of blogs that described labor shortages occurring in China. At the time, I missed all these articles but now I've seen the topic pop up on a couple of tech sites that I visit and I became interested.

Accordingly, this post is not intended to provide a specific piece of investment advice but is more an exploration of a news item that I thought might be worth exploring since many of us are focused on China as the engine of the global economy.

On the DigiTimes web site, an article declares that China's labor shortages are worsening, particularly in the eastern region. Labor shortages are now an annual issue, but the problem has occurred earlier this year and is more severe. The situation is expected to get worse before the Lunar New Year (in February). In particular, the authors quote managers of electronics firms involved in manufacturing flat panels and related compo…