Wednesday, March 31, 2010

Frustrated with femtocells

iSuppli recently published a study contending that the next big thing in hi-tech is the femtocell. Two questions immediately come to mind: what the heck are femtocells and can an investor make money on them?

Background --

Femtocells are cellular base stations that improve indoor wireless coverage. Femtocell base stations improve 3G cellphone coverage inside buildings or homes — locations where wireless signals tend to be weak because of building materials blocking the signal or the site’s distance from a cell tower. A femtocell acts somewhat like a WiFi hotspot or a wireless router, providing access to the cell carrier's network for multiple devices within a building. With some carrier networks straining to keep up with the demands of increasing numbers of users surfing the web from their smartphones, femtocells are being looked at as a way to improve service without having to build as many expensive cell towers or spend so much to increase bandwidth.

The growth story --

iSuppli has this to say with respect to growth: femtocells are "headed toward critical mass among all major nodes of the wireless supply chain and will vault into explosive growth after reaching a decisive watershed this year."

They expect shipments to triple this year. They then expect shipments in 2011 to be 289% higher than 2010 and so on. The chart below shows the sharp ramp in shipments.

growth in femtocell shipments

Leading companies in the sector --

Among several carriers who are rolling out femtocells, there is Vodaphone PLC in the United Kingdom who already has femtocells in service. Most carriers are so big that adoption or non-adoption of femtocells would not be a primary reason to invest in one of these of companies.

So much for the customers. What about the producers of femtocells and the semiconductors used in them?

There is one clear leader in the field: picoChip. This company, also based in the U.K., pioneered the femtocell SoC (system on a chip) market and currently claims to be the only company with products qualified for major carriers' networks and shipping in volume. They say they have 10 carriers as customers that are now offering commercial service using picoChip integrated circuits and sixty more in trials. picoChip seems to the company that owns the space and, sadly for investors, they are a private company.

The growth potential in femtocells has not gone unnoticed by some of the major chip manufacturers. Qualcomm (QCOM) and Texas Instruments (TXN) are now looking at getting into the market. Again, these companies are both so big that femtocell components will barely move the needle when it comes to overall sales.

OK, we've looked at customers for femtocells and producers of femtocells and no great investments jump out at us. Well, there are still the test and measurement companies. According to iSuppli, the two leaders with respect to femtocells are AirHop Communications and Continuous Computing. Tough luck again, though, as both are private companies.

Conclusion --

Femtocells do seem poised for a real growth streak. For an investor, however, it's a frustrating situation. The best company in the sector is small, private and British. Even if they go public there's no guarantee their shares would be available to U.S. investors.

The best opportunity for an investor would be for a small U.S. company to acquire picoChip. A company where the boost from picoChip's sales would make a significant difference in the acquiring company's financial results. An interesting choice would be a company like SkyWorks (SWKS).

So for now, all we can do is keep an eye on the femtocell sector and see what happens. At least our cell service should improve while we wait for an opportunity to develop.



Tuesday, March 30, 2010

Alert HQ signals for Tuesday, March 30, 2010

This post is announcing that Tuesday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:
  • 33 Swing Signals -- 29 BUY signals and 4 SELL Signals and one Strong BUY.
  • 386 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 74 stocks that are new additions to the list and 174 that fell off the previous list.
  • 13 Trend Busters of which 6 are BUY signals and 7 are SELL signals.
  • 138 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 64 are bearish gaps and 74 are bullish gaps.
The view from Alert HQ --

I'm buying into the opinion that the market is over-bought and ready for a pullback, but now I see a surge in BUY signals on the Swing Trading Signals list. What to do?

Looking for some confirmation in the other Alert HQ lists, I see a contrarion indicator in that the number of stocks on the Trend Leaders list has fallen from almost 1000 to under 400. Once this number gets down to about 300, stocks tend to begin to bounce back. The Trend Busters list, however, is sitting on the fence with BUY signals and SELL signals about evenly split. Finally, we have a few more upside gaps than downside gaps on the Gap Analysis list.

All in all, a slight bias to bullishness. To get a head start on what could be an extension of this rally, head over to the Swing Signals page. We have a good number of energy-related companies listed today and some utilities (though I will grant you that utilities are not typically bull market leaders). For those who are looking for tech stocks (which often are bull market leaders), we have a couple of those as well, specifically Keithley Instruments and Rackspace Hosting.

As always, I encourage you to spend a few minutes browsing through Alert HQ. We always have a few interesting selections that just might be what you're looking for.

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.


Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Why is the SEC suddenly focused on leveraged ETFs?

The SEC has decided to take a closer look at derivatives as they are used by ETFs and mutual funds.

Here is what the SEC has said:

"Pending the review's completion, the staff has determined to defer consideration of exemptive requests under the Investment Company Act to permit ETFs that would make significant investments in derivatives. The staff's decision will affect new and pending exemptive requests from certain actively-managed and leveraged ETFs that particularly rely on swaps and other derivative instruments to achieve their investment objectives. The deferral does not affect any existing ETFs or other types of fund applications."
I used to write regularly about ProShares leveraged ETFs. Under the hood, leveraged ETFs, both the 2X or 3X and inverse 2X or 3X, make extensive use of derivatives. Swaps of one kind or another are commonly utilized to achieve results that are multiples of an underlying index.

Let's look at the ProShares Ultra QQQ (QLD) ETF that is intended to deliver twice the daily performance of the NASDAQ 100 index. According to the ProShares site, QLD daily holdings include over $200M in futures and nearly a $1B (notional value) in swaps. This is in contrast to other holdings of approximately $500M in the actual stocks that make up the NASDAQ 100 plus $340M in cash and other assets. Needless to say, it's primarily the swaps that gives this ETF its juice.

In effect then, a company like ProShares would not be able to bring to market any more leveraged ETFs. Fortunately for ProShares, the SEC announcement indicates that existing ETFs will not be affected.

Who does this SEC decision actually hurt?

Institutions always have more opportunities to use complicated or exotic investment techniques so the SEC decision will be merely an inconvenience.

Once again, it is the small investor who will see less choice in investment products. Sector and style-based ETFs have made it much easier for individual investors to make diversified bets on different areas of the U.S. and global economies. The leveraged long and short ETFs have been good vehicles for reasonably educated traders with a more short-term orientation.

So why all of a sudden the interest in leveraged ETFs? Is the SEC responding to political pressure to make it look like they are doing something about the barely regulated derivatives market? Is it easier to just dump on providers of ETFs and mutual funds than to actually go up against the investment banks and hedge funds that are primary players in the derivatives markets?

Read the SEC Press Release here.



Saturday, March 27, 2010

Weekend Winners and Losers - Alert HQ BUY and SELL signals for March 26, 2010

Winners and LosersThis is our usual quick post announcing that the weekend's free stock signals are now available at Alert HQ.

Today we have the following stock picks and signals:

  • Based on daily data, we have 3 Alert HQ BUY signals and 56 SELL signals
  • Based on weekly data, we have 4 Alert HQ BUY signal and 9 SELL signals
  • We have 68 Bollinger Band Breakouts based on daily data and 283 Breakouts based on weekly data.
  • We have 708 Cash Flow Kings
  • 13 Swing Signals -- 5 BUY signals and 8 SELL Signals
  • 488 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 41 stocks that are new additions to the list and 145 that fell off the previous list.
  • 9 Trend Busters based on daily data of which 3 are BUY signals. We also have 43 Trend Busters based on weekly data.
  • 129 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. We see 56 downside gaps and 73 upside gaps based on daily data. We also have 44 Gap Signals based on weekly data.
The view from Alert HQ --

Well, things are sure looking pretty toppy. Stocks keep throwing in the towel at the end of the day, an action suggesting weakness. The charts show stocks rolling over though still close to recent highs.

At Alert HQ, the signals have been less bullish for a while and are turning outright bearish now. We've been seeing a lack of BUY signals on a number of our lists and the number of stocks on the Trend Leaders list keeps decreasing.

There are always a few stocks that manage to advance while the market is contracting and we've listed a few here at Alert HQ. But for most investors, this is a good time for caution.

Using our signals --

Visit Alert HQ to view or download your free lists of stock alerts. The alerts based on weekly data show those stocks that have exhibited some good follow-through after a recent trend reversal. If you want to be early in identifying the newest trend reversals, the lists based on daily data are for you.

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you have no faith in technical analysis, the Cash Flow Kings may be just what you are looking for. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas. See them all at Alert HQ.

Remember, we also provide our latest updated Swing Signals, Trend Leaders, Gaps and Trend Busters on Tuesday and Thursday nights.


Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Thursday, March 25, 2010

Alert HQ signals for Thursday, March 25, 2010 -- alarm bells?

This post is announcing that Thursday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:

  • 23 Swing Signals -- 8 BUY signals and 15 SELL Signals.
  • 592 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 86 stocks that are new additions to the list and 309 that fell off the previous list.
  • 15 Trend Busters of which 3 are BUY signals and 12 are SELL signals.
  • 138 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 65 are bearish gaps and 73 are bullish gaps.
The view from Alert HQ --

Stocks haven't really fallen all that much but the Thursday signals at Alert HQ are surprisingly downbeat tonight. Let's start at the top.

The Swing Signals list is growing but there are way more SELL signals than BUY signals. The Trend Leaders list is shrinking, not growing. The Trend Busters list has for the second time in a row shown more SELL signals than BUY signals. The only glimmer of positive news is that there are more upside gaps than downside gaps.

So with stocks at new highs, markets are vulnerable to a pullback here. There is some pretty solid support not too far below current levels and the economy continues slowly mending. On Tuesday I was surprised at how strong many of our signals were and today I'm surprised at how weak they are. Let's call it a wash and assume the trend is still up.

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.


Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Wednesday, March 24, 2010

DynCorp chart looking up - does it deserve the reversal?

Poking through Tuesday's Alert HQ stock signals I came across an interesting Trend Buster. The company is DynCorp (DCP) and the chart is below.

Several things about this company grabbed my attention. Starting with the chart, we have the following positive developments:

  • Price has broken above the trend line (downward sloping blue line)
  • Price has broken above the 50-day moving average
  • Chart pattern looks suspiciously like an inverted head-and-shoulders. This is generally considered a very bullish setup
  • MACD is bullish
  • Aroon is bullish, suggesting a strong positive trend

DCP stock chart - trend buster

Background --

DynCorp provides law enforcement training and support, security services, base operations, aviation services, contingency operations, interpreters and logistics support to civilian and military government agencies worldwide. The company is currently training police in Afghanistan and has been active in Iraq and Africa.

As a contractor willing to work in the hotspots of the world, DynCorp is one of those companies that is able to prosper while the bullets are flying. Still, the company has not been exempt from the effects of the global economic downturn. In addition, with the election of Obama and the Democratic majority, investors are no doubt assuming that DynCorp's role may soon be shrinking as the administration attempts to pull back from foreign entanglements. As a result, the stock price has been under pressure until just recently.

The financials --

Here's something else that grabbed my attention. With the price down so low, the stock is looking very much like a deep value stock. The table below presents a number of measures.

Symbol Name Last Price Market Cap PE PEG Price To Sales
DCP DYNCORP INT'L, INC. $11.81 $652.9M 8.14 0.72 0.20
Price To Book Debt To Equity Enterprise Value to EBITDA Sequential EPS change YOY EPS change Sequential Rev Change YOY Rev Change
1.16 0.9309 4.777 -2.7% 05.88% 11.4% 15.48%


All the typical value measures are looking pretty good: PE, PEG, Price to Sales, Price to Book, Enterprise Value to EBITDA. Each is in the range that suggests the stock is far from over-valued.

Financial performance is summarized in the chart below:

DCP financials

Here we can see revenue on the upswing, more so than earnings per share. In fact, EPS has been somewhat flat though, as the table above this chart shows, y-o-y EPS did show a modest 5% improvement.

Conclusion --

DynCorp's stock seems to be deeply over-sold based on its current valuation measures and stock chart. The price is finally recovering though and the chart setup is verging on real bullishness. With an upside breakout through it's trend line, the company seems to be demonstrating a nice reversal.

In order to keep up the momentum, however, the company will have to prove that it can convert some of these surging revenues into improved earnings per share. With the international situation still favoring the company and its services, I suspect there isn't much risk in owning this stock at this price.

Disclosure: no position



Tuesday, March 23, 2010

Alert HQ signals for Tuesday, March 23, 2010

This post is announcing that Tuesday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

Today we have the following:
  • 34 Swing Signals -- 30 BUY signals and 4 SELL Signals and one Strong BUY.
  • 811 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 271 stocks that are new additions to the list and 155 that fell off the previous list.
  • 11 Trend Busters of which 9 are BUY signals and 2 are SELL signals.
  • 136 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 66 are bearish gaps and 70 are bullish gaps.
The view from Alert HQ --

Investors don't seem particularly upset by passage of the health care bill. On the contrary, we now have two days in a row of nice gains.

Things had been looking pretty toppy, we got the barest of pullbacks and now the market is looking strong again.For example, look at the improvement in our Swing Signals. It was dwindling to almost nothing and SELL signals outnumbered BUY signals. That situation is turned around completely. The number of signals has increased significantly and BUY signals way outnumber SELL signals. The Trend Leaders list has decreased a bit but there are still more stocks being added to the list than are falling off the list.

Likewise, on the Gap Analysis list, the majority of gaps are to the upside. Though our Trend Busters list seems smaller than usual, here too the BUY signals outnumber the SELL signals.

It's almost hard to believe that stocks might rack up more gains before turning in another correction but when you look at a chart of weekly data it does indeed look like stocks have a ways to go to complete the current leg up. We'll worry all the way up but don't let the worry keep you from taking a few bullish positions. I encourage you to let Alert HQ be your source of investing ideas.

Using our signals --

If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.

Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




Monday, March 22, 2010

Semiconductor sector still solid - headlines from the frontlines

Semiconductor ETFs have been on the rebound lately. Here’s a roundup of semiconductor news from the Digitimes web site that illustrates what’s going on in the sector.


12-inch wafer prices to rise 10-20% in 2Q10

Demand is sufficient to allow suppliers to foundries to raise their prices. The article goes on to say that TSMC and UMC have both seen full utilization rates at their 12-inch fabs, thanks to orders for FPGA, GPU, network and wireless applications, according to the sources. Suppliers have kept capacity at recession levels while ramping prices. Pricing power is a good indicator of growth in demand so, from that point of view, this can be considered a positive.



Supply chain remains tight amid conservative capacity management, says iSuppli

"As iSuppli has been reporting for several months, the recovering economy has brought renewed demand. However, component suppliers have yet to jump in with both feet when it comes to ramping up capacity," These companies are just enjoying increasing margins and enjoying a little pricing power for the first time in a couple of years.


Chip-gear book-to-bill almost flat in February 2010

OK, the sequential month-over-month numbers are flat and the lack of improvement is disappointing. But when looking at the book-to-bill ratio from a year-over-year perspective, the improvement is dramatic.And this is from a sector that has been  really devastated. When chip demand cratered, equipment sales went down the toilet. The fact that chip manufacturers are finally buying equipment to increase productivity and capacity is a good sign of confidence in future prospects for chip sales.


Intel sees chipset demand from motherboard makers exceed CPU shipments by 20%, say sources

Motherboard clients of Intel have been increasing orders for chipsets recently, causing chipset shipments to rise to a level 20% higher than processor shipments. This implies PC sales are still on the rise, probably partially due to the Windows 7 upgrade cycle.


Chip industry to grow 7% in 2011, predicts TSMC chairman

The global semiconductor industry will grow by 7% in 2011, and is poised to post a CAGR (compound annual growth rate) of 4.2% during the period from 2011-2014, according to Morris Chang, chairman of Taiwan Semiconductor Manufacturing Company (TSMC), speaking at the recent Global Semiconductor Alliance (GSA) summit.

Considering how the sector was in free-fall a year or so ago, this shows that growth is not a flash in the pan. These expectations for steady improvement contradict calls for a double-dip


DRAM spot prices keep rising

Spot prices for mainstream 1Gb DDR2 and same-density DDR3 have recently rallied to approach the US$3 mark, reflecting demand is outstripping supply.

This is yet another indication that demand for chips is robust and even the usually over-supplied and lowly memory chip is allowing memory makers to raise prices for the first time in ages.


How to play it –-

I always look to the ETFs in a situation where there seems to be something positive going on across the whole sector. Here are a few for your consideration:
  • IGW, the Semiconductor iShares S&P/GSTI Index Fund
  • XSD, the SPDR S&P Semiconductor Index ETF
  • SMH, Semiconductor Holders
  • PSI, PowerShares Dynamic Semiconductors Portfolio
  • USD, ProShares Ultra Semiconductor ETF

    Disclosure: modest position in USD



    Thursday, March 18, 2010

    Alert HQ signals for Thursday, March 18, 2010

    This post is announcing that Thursday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

    Today we have the following:
    • 18 Swing Signals -- 3 BUY signals and 15 SELL Signals.
    • 938 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 199 stocks that are new additions to the list and 165 that fell off the previous list.
    • 25 Trend Busters of which 12 are BUY signals and 13 are SELL signals.
    • 155 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 73 are bearish gaps and 82 are bullish gaps.
    The view from Alert HQ --

    Stocks muddled through the day today. The Dow showed a noticeable gains while most other averages barely broke even. On the three major exchanges, however, decliners outpaced gainers.

    We see the same situation at Alert HQ. SELL signals are in the majority on the Swing Signals and Trend Busters lists. And yet there are still positive signs from the Gaps list where upside gaps outnumber downside gaps. And the Trend Leaders list is still growing though it is growing more slowly than last week.

    Stocks seem to be getting more and more tired. If you're a bull like me, that means a buying opportunity is coming. Take a look at our lists of alerts and populate your watch list. The time to pull the trigger could be getting close.

    Using our signals --

    If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.

    Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




    Wednesday, March 17, 2010

    Value stocks getting harder to find

    One of the things I do at Alert HQ is scan the Trend Leaders list for stocks that not over-valued. I use a simple screen to identify those stocks that, while trending strongly upward, are showing what I call "reasonable value."

    Here are the criteria used for my reasonable value determination:

    • PE between 0 and 20
    • PEG between 0 and 1.3
    • Price-to-Sales less than 2
    • Debt-to-Equity less than 1
    The following table shows the results of this screen after it was run against those stocks that were added to the Trend Leaders list after the close on Tuesday, March 16. The Last Price column is also as of the close on Tuesday.

    Symbol Name Last Price Market Cap PE PEG Price To Sales Price To Book Debt To Equity
    COP CONOCO PHILLIPS $52.17 $76.84B 15.81 0.59 0.56 1.22 0.431
    GGAL Grupo Financiero Galicia S.A. $5.50 $661.7M 10.88 1.2 1.14 1.22 N/A
    AIRM Air Methods Corporation $32.24 $389.7M 11.46 0.57 0.67 1.79 0.4601
    HGG HHGREGG, INC. $22.50 $872.6M 19.11 1.17 0.59 3.6 0.3773
    EME EMCOR GROUP, INC. $26.19 $1.668B 10.61 0.72 0.3 1.37 0.1234
    ANDE The Andersons, Inc. $34.87 $625M 16.15 1.06 0.2 1.51 0.7582

    Given the fact that there are over 900 stocks and ETFs on the Trend Leaders list this week, it is a sad comment for a value investor to see so few stocks pass this rather loose value screen.

    Be that as it may, today's list does have some interesting selections. Here are a few comments:
    • Conoco Phillips (COP) is expected to sell half of its stake in Lukoil which could raise roughly $4.6B. The stock has been steadily advancing since the beginning of March. The PE is reasonable but PEG and Price to Sales are very low, indicating deep value.
    • Grupo Financiero Galicia S.A. (GGAL) is a good way to play the dynamic economy of Argentina. The company is a significant player in commercial banking and consumer banking in the country. The company has struggled to grow earnings over the last few quarters, as have so many financial companies, but they have remained solidly profitable.
    • Air Methods (AIRM) stock price has shot up recently and it threatens to close the bearish gap that occurred in late January after reporting poor earnings. The stock was beaten down so badly its PEG and Price to Sales numbers are now well within value territory. The company supplies medical air transport services. Management says expectations are high. Who knows, maybe the new health care bill will help them out.
    • hhgregg (HGG) operates retail electronics stores in nine states. Here is a company that is doing pretty well as you can see in this chart of company financials and below that the chart of price action:


    • Emcor Group (EME) is primarily involved in electrical distribution systems and HVAC equipment for commercial buildings and municipalities. The company's numbers show that it is still waiting for the construction industry to recover; however, a patient investor will probably be rewarded by this company.
    • The Andersons (ANDE) may have an unusual name but they are in the somewhat mundane businesses of grains, ethanol, railcars, fertilizer, warehousing, seeds and chemicals. In any case, this mix of businesses seems to be working for the company. Their most recent quarter showed solid sequential growth but our screen shows the company is not over-valued. Below is the chart which shows a beautifully steady upward trend:

    Conclusion --

    It may be getting harder to find value stocks that are showing good price performance but these six show that there are still a few out there. In digging into them, it looks some are better than others. My personal favorite from today's list is hhgregg but I do find The Andersons to be a pretty interesting company. And with its 50-DMA about to cross above the 200-DMA, there is probably further upside to be had.

    Disclosure - no positions in any stocks mentioned in this article



    Tuesday, March 16, 2010

    Alert HQ signals for Tuesday, March 16, 2010

    This post is announcing that Tuesday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

    Today we have the following:
    • 14 Swing Signals -- 4 BUY signals and 10 SELL Signals and one Strong BUY.
    • 904 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 170 stocks that are new additions to the list and 214 that fell off the previous list.
    • 34 Trend Busters of which 22 are BUY signals and 12 are SELL signals.
    • 141 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 72 are bearish gaps and 69 are bullish gaps.
    The view from Alert HQ --

    Investors applauded the Fed's statement today and stocks turned in another advance albeit on low volume. The brief pause I discussed in the weekend's post so far has seemed to consist of a mild one-day pullback.

    The Alert HQ signals continue to show slowing momentum overall but there are still stocks that are making a good moves and we've got them on our lists. We see Dragonwave (DRWI), which has been so beaten down lately, making a big move up today and showing up on the Swing Signals list. From the Trend Busters list we've got an interesting move in Hospitality Property Trust (HPT). From the tech world we see BMC making steady gains and jumping onto the Trend Leaders list tonight.

    So be sure to scan our Alert HQ signals. There's always a stock or ETF worth considering for your portfolio.

    Using our signals --

    If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.

    Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




    Monday, March 15, 2010

    Introducing the Trade Radar Stock Market Research Assistant

    I've introduced a new feature to the Trade Radar web site tonight. It's called the Trade Radar Stock Market Research Assistant.

    What it does --

    When doing stock research, you might want to see a description of the company, a chart, headlines and blog posts, various sets of financial data and financial ratios, earnings call transcripts, etc. It's not unusual to have to visit several sites to see the best data in each category. At each site you have to enter a ticker symbol and navigate to the page you are actually interested in.

    The Trade Radar Stock Market Research Assistant removes the drudgery. Just enter a ticker symbol one time and the Research Assistant will hit up to eleven sites to retrieve pages that present best in class data.

    When I refer to "best in class" data, I mean that some sites are better at presenting certain kinds of information. I've evaluated a number of sites and created a set of resources that meet my standards for offering the most useful kinds of data.

    Here are the sites queried by the Stock Market Research Assistant:
    • Profile at Yahoo Finance - offers a quick description of the company
    • Key Statistics at Yahoo Finance - presents a good financial overview
    • Headlines at Yahoo Finance - grabs the most recent company news
    • Financials at Google - Income Statement, Balance Sheet and Cash Flow
    • View chart at StockCharts.com - the best charting site on the web
    • Search Google - always a good place to start a search
    • Search Blogs - the financial blogosphere is always worth checking for chatter and independent analysis  about certain companies
    • Search EDGAR - browse SEC submissions including 10-K, 10-Q, 8-K, etc
    • Financials at BusinessWeek - great presentation of four quarters or four years of financial statements in column format allows easy quarter-over-quarter or year-over-year comparisons
    • Financial Ratios at Reuters - an excellent set of ratios including many that aren't available on other sites
    • Earnings Call Transcripts at Seeking Alpha - a surprisingly thorough set of transcripts available. Read what company managers are saying and how they respond to analyst questions
    You can choose one, two, three or all of these data sources. The Research Assistant will launch an appropriate number of browser windows, each one containing the page corresponding to the data you selected. This works best in browsers that support multiple tabs like Firefox and Internet Explorer 8.

    Out with the old, in with the new --

    To make room for the Stock Market Research Assistant I decided to retire The Daily News section of the site. This mash-up of financial news couldn't stand up to big aggregators like Seeking Alpha so it was time to find a replacement.

    I hope you find the Trade Radar Stock Market Research Assistant as useful as I do. I've already started using it regularly. Give it a try the next time you're researching a stock and see if doesn't make quick work of digging up data.



    Sunday, March 14, 2010

    Stocks tired or getting ready to flex their muscles?

    I spent a big part of the weekend working on the soon to be released major update to the TradeRadar software. As a result, I fell behind on the usual weekend blog posts. What follows then, is a combination of our Weekly Review and the Weekend Winners and Losers where we announce the weekend's free stock signals available at Alert HQ.

    Today we have the following stock picks and signals:
    • Based on daily data, we have 14 Alert HQ BUY signals and 8 SELL signals
    • Based on weekly data, we have 11 Alert HQ BUY signal and 6 SELL signals
    • We have 100 Bollinger Band Breakouts based on daily data and 396 Breakouts based on weekly data.
    • We have 727 Cash Flow Kings
    • 13 Swing Signals -- 2 BUY signals and 11 SELL Signals
    • 951 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 156 stocks that are new additions to the list and 108 that fell off the previous list.
    • 20 Trend Busters based on daily data of which 18 are BUY signals. We also have 41 Trend Busters based on weekly data.
    • 120 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. We see 49 downside gaps and 71 upside gaps based on daily data. We also have 69 Gap Signals based on weekly data.
    The view from Alert HQ --

    Though the general tone of the Alert HQ signals is still fairly bullish, there are creeping signs of slowing momentum. When we can only find two Swing BUY signals, that implies most stocks have already started trending positive. When the Trend Leaders list gets up around 1000, it often suggest a short-term top in the market is approaching.

    Our moving average analysis shows a similar story. In the chart below we count the number of stocks above various moving averages and count the number of moving average crossovers, as well. We scan roughly 7000 stocks and ETFs each weekend and plot the results against a chart of the SPDR S&P 500 ETF (SPY).


    This analysis shows that there is still room for further gains based on the fact that we are still below some of the peaks that were registered last year. On the other hand, we are now at the same level where the most recent peak was followed by a noticeable correction.

    The next chart provides our trending analysis. It looks at the number of stocks in strong up-trends or down-trends based on Aroon analysis.



    In this chart the number of stocks in strong up-trends is at a high and the number of stocks in down-trends is at a low. We're seeing a strong bounce-back in this indicator as stocks recovered from the recent correction. The question, of course, is whether stocks can keep up this kind of momentum.

    Since we scan most of the stocks and ETFs in the market, I generally like to look at the Vanguard Total Market VIPERs (VTI) to see how performance of this ETF stacks up. In the chart below, I have three indicators that show how strongly over-bought stocks are.


    You can see RSI, Williams %R and Slow Stochastics are all at extremes. Can they remain at these extreme levels for much longer? They can!

    You can also see in the chart of VTI that stocks have just surpassed the January highs. This could be the beginning of another leg up. There could easily be rotation out of sectors that led the way up from the bottom of the recent correction into those sectors that have lagged. That would allow many of the statistics tracked at Alert HQ to stay at extreme levels. Decent economic performance has been supporting stocks on their way up and that dynamic could continue. Furthermore, that January high now gets to act as a support level.

    In the charts above, however, I've juxtaposed the S&P 500 SPDR ETF (SPY) against the data I've compiled.  Our friends over at MarketClub have provided a video that reviews the S&P 500, showing how we got to where we are today and why caution is an appropriate sentiment. Watch the video now!

    Conclusion --

    Given how over-bought most indicators are, stocks could pause at these levels. Weakness, I think, will be brief and stocks will flex their muscles again. There's still room for more gains and the market will again show the kind of strength that has allowed ETFs like VTI to rebound to new highs.

    (Thanks to Graphics Factory for use of the image)



    Thursday, March 11, 2010

    Alert HQ signals for Thursday, March 11, 2010

    This post is announcing that Thursday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

    Today we have the following:
    • 14 Swing Signals -- 3 BUY signals and 11 SELL Signals.
    • 902 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 286 stocks that are new additions to the list and 165 that fell off the previous list.
    • 33 Trend Busters of which 29 are BUY signals and 4 are SELL signals.
    • 145 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 66 are bearish gaps and 79 are bullish gaps.
    The view from Alert HQ --

    A week ago, it looked to me like stocks were getting tired. Since then, markets have put in a nice advance and I am once again getting skittish. Alert HQ is showing signs that the market is over-bought and ready for a pause. The Swing Signals are showing more SELL signals than BUY signals. The number of stocks on the Trend Leaders list is approaching one thousand. We've seen pullbacks before when these two sets of indicators are behaving this way.

    On the other hand, maybe I'm just a worry wart. The Trend Busters list remains strongly bullish and the Gap Analysis list continues to show more upside gaps than downside gaps.

    How to play it --

    I'm often advising in these posts that you should pick some candidates for a watch list. With markets showing signs of wanting to take a breather, this is a good time to pick a few stocks from the Trend Leaders list and wait for a cheaper entry point which, in my opinion, might not be too far away. Don't forget to click the column headings to sort the lists to find those stocks whose valuation indicators look most attractive.

    Using our signals --

    If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.

    Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




    Tuesday, March 9, 2010

    Alert HQ signals for Tuesday, March 9, 2010

    This post is announcing that Tuesday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

    Today we have the following:
    • 13 Swing Signals -- 6 BUY signals and 7 SELL Signals and one Strong BUY.
    • 783 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 247 stocks that are new additions to the list and 139 that fell off the previous list.
    • 38 Trend Busters of which 33 are BUY signals and 5 are SELL signals.
    • 162 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 53 are bearish gaps and 109 are bullish gaps.
    The view from Alert HQ --

    Stocks wimped out today when they were on the verge of closing at new highs. If you look at the chart of the Vanguard Total Market VIPERs (VTI), the ETF that I often use to compare to the Alert HQ signals, you will see that after a nice mid-day rally stocks fell back to the previous high from January 19. This looks like the market can't decide whether this is a support level or resistance level.

    Our Alert HQ signals continue mostly bullish. The Trend Leaders list continues to grow, Trend Busters continue to show tons of BUY signals, the majority of gaps are the upside. Today though, we do see a note of caution in the fact the Swing Signals list has very few signals and 7 out of 13 are SELL signals.

    So stocks will rally until the won't. I suspect we will see some consolidation around current levels before a push to new highs. It's not too late take a look at Alert HQ and pick a few candidates for the continuation of this rally.

    Using our signals --

    If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.

    Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




    Monday, March 8, 2010

    Large-cap tech entering a period of out-performance? Here's why

    Read an interesting article at ComputerWorld today that got me thinking. The title: "IT centralization is back in fashion."

    It is useful to think about what this means for IT organizations and the vendors that support them.

    Why centralize?

    With technology assets centralized in one place, it's easier to take advantage of opportunities for efficiency and streamlining such as virtualization, storage de-duplication, cloud computing and outsourcing, all of which promise to lower costs.

    Centralization also makes it easier to create an effective disaster recovery strategy, minimize labor redundancies (ie, reduce expensive IT staff), get volume discounts on technology purchases, and lower maintenance and training costs through standardization.

    Is the trend real?

    There's some statistical evidence of a tilt toward IT centralization. In Computerworld's recent Forecast survey, 37% of 312 respondents said it's likely that their IT units will become more centralized in the next 12 months. And in a 2009 IBM survey of 2,500 CIO worldwide, 76% of respondents said they anticipated having a strongly centralized infrastructure in five years.

    IBM itself last year completed a shift to centralized IT management, reducing the number of data centers it operates from 155 to five and trimming its portfolio of applications from 15,000 to 4,500.

    Which vendors will qualify?

    The move to centralization will see CIOs looking to vendors who can offer several of the following major benefits:
    • Products should efficiently scale up to handle greater numbers of user and transactions.
    • Vendors must offer greater out-of-the box integration of wide-ranging functionality
    • Vendors should also offer IT services either for system implementation or longer-term outsourcing
    • Vendors who can offer quantity discounts or concessions on corporate-wide site-license pricing will have an advantage
    The largest IT vendors are the companies that most easily meet all the requirements listed above. This means companies like Cisco Systems, IBM, Oracle, Hewlett-Packard, EMC, VMWare, SAP, Computer Associates, Teradata, Microsoft, Dell, NetApp, Juniper Networks, Fiserv, BMC Software and Compuware.

    The folks at IBM think we have a 5-year cycle during which the centralization trend will maintain its popularity before the pendulum begins to swing in the opposite direction. During that time, large-cap tech stocks can be expected to out-perform.



    Sunday, March 7, 2010

    Fighting cyber attacks and hackers a growth industry? -- 5 pureplay companies you can follow

    Cyber attacks against Google have recently been in the news.Yahoo and other companies have been attacked, as well.  Microsoft, in turn, has gone to court to attack a network of malicious botnets. With all this activity in the cyber security arena, it is worth investigating which companies are at the forefront of the battle against hackers. With a wave of concern over hacking attempts, there should be some good investment candidates in the network security sector.

    Background --

    When I talk about security I'm talking about intrusion detection and protection. An intrusion-prevention system (IPS) is an inline security device that performs deep-packet inspection to identify and block malicious traffic. IPSs are considered an improvement over intrusion-detection systems (IDS), which are passive devices that simply identify an attack but take no action to block it. IPSs are designed to respond in real time to attacks by dropping data packets deemed malicious.

    There several ways that intrusion detection and prevention is accomplished:

    • Host Intrusion Detection and Prevention: Businesses add these systems to individual critical hosts or devices residing on the network. This type of IDPS monitors both inbound and outbound packets — but only through the device with which it is associated.
    • Signature-Based Intrusion and Prevention: This type of IDPS is useful for detecting viruses and other types of malware. The product compares all of the packets that flow through it with a database of known threats. Like anti-malware offerings, a signature-based IDPS is only as good as the information it uses, meaning that technology is vulnerable to "zero day" security events. On the other hand, a signature-based IDPS is a very reliable way of defending a network against known threats, which constitute the majority of network perils.
    • Anomaly-Based Intrusion and Prevention: One could describe this kind of IDPS as being naturally suspicious. That's because an anomaly-based IDPS is always looking for something out of the ordinary. The system continuously scrutinizes network traffic and compares it against an established baseline. Any detected deviations from "normal" performance in terms of bandwidth use, ports accessed or devices connected will cause the IDPS to issue an alert and take proactive steps to ensure the network's health. This type of firewall can be particularly effective in helping business cope with DDoS (distributed denial of service) attacks, when large numbers of computers are recruited to join together and bring down a Web site.
    State of the industry --

    There were a good number of pure play companies in the cyber security space in years past. Over time, however, many of the companies were acquired or combined with each other. Today, we see that Cisco has absorbed Entercept, Wheel Group and Air Force. IBM has acquired Internet Security Systems, also known as ISS. Enterasys now owns Network Security Wizards. Symantec acquired Axent, provider of the Net Prowler product. Juniper, Tivoli and Computer Associates have all bought various IDPS companies. The upshot of all this acquisition activity is that IDPS has become just a small part of some very large companies.

    So who's left? In the table below, I present five companies that are still independent, publicly traded and reasonably pure plays in the IDPS sector.


    SonicWALL Check Point Software Technologies Fortinet Sourcefire Radware

    SNWL CHKP FTNT FIRE RDWR
    Valuation Measures




    Market Cap 483.24M 7.06B 1.14B 724.23M 341.93M
    Trailing P/E 37.59 20.03 21.83 84.7 N/A
    Forward P/E 18.18 13.66 46.08 38.36 22.64
    PEG Ratio (5 yr expected): 1.49 1.34 3.06 2.27 0.81
    Price/Sales (ttm): 2.37 7.59 4.47 6.93 3.15
    Price/Book (mrq): 1.58 3.03 7.91 5.58 2.28
    Enterprise Value/EBITDA (ttm)3: 13.317 12.681 27.714 55.626 -275.185
    Profitability




    Profit Margin (ttm): 6.56% 38.67% 23.87% 8.58% -5.45%
    Operating Margin (ttm): 8.26% 45.88% 10.05% 8.01% -6.52%
    Income Statement




    Revenue Per Share (ttm): 3.72 4.415 9.574 3.91 5.768
    Qtrly Revenue Growth (yoy): -0.20% 25.10% 19.70% 37.20% 29.10%
    Diluted EPS (ttm): 0.24 1.69 0.78 0.32 -0.31
    Qtrly Earnings Growth (yoy): 43.60% 26.70% 453.20% 193.90% N/A
    Balance Sheet




    Total Cash (mrq): 200.15M 884.00M 260.31M 53.07M 59.09M
    Total Cash Per Share (mrq): 3.69 4.228 3.897 1.968 3.129
    Cash Flow Statement




    Operating Cash Flow (ttm): 35.85M 548.69M 62.32M 20.16M N/A
    Levered Free Cash Flow (ttm): 10.82M 430.93M 26.37M -21.91M N/A

    The data above is from Yahoo! Finance as of Friday, March 5. It shows that all but one of these companies is profitable and none of them are particularly cheap.

    Here is a quick look at each company.

    SonicWall (SNWL) focuses almost exclusively on network secruity. Products include hardware/software firewall appliances with deep packet and statefull packet inspection. They provide SSL VPN (virtual private network) products, anti-spam email filtering solutions and backup and recovery products. The company recently announced good earnings and, as the chart shows, the stock took off. Management also offered forward revenue guidance that exceeded analyst expectations.

    Check Point Software Technologies (CHKP) is the grandaddy of these companies. Check Point was one of the first companies to introduce the kind of advanced firewall features that I just described above. Given the company's longevity and first-mover advantage it is easy to see why Check Point has the largest market cap of this group of stocks.

    Check Point probably has the most extensive and wide-ranging security-related product suite: security gateways (encompassing firewalls, IPS, etc.), security management, encryption solutions for PCs and digital media and complete turnkey systems integrated into hardware appliances. In addition, the company provides consulting and services.

    Fortinet (FTNT) offers many of the same network security products discussed above under the umbrella of Unified Threat Managment (UTM). It's offerings include both wired and wireless solutions, robust management and analysis, etc. The company differentiates itself in a couple of areas by offering database security and compliance solutions and patch management and auditing. Fortinet went public in November of 2009 and, like many IPOs, its stock price has fallen back after an initial enthusiastic run-up.

    Sourcefire (FIRE) is best known as the creator of SNORT, one the first and most widely used open source network intrusion prevention and detection systems.

    Not only is Sourcefire a leader in IDPS systems but they also offer a popular anti-malware product. The company focuses on a number of verticals including healthcare, financial services, government, power and energy, retail and higher education. Given that government regulation is an important aspect in some of these verticals, Sourcefire has opted to create a number of compliance oriented features that are targeted specifically at various objectives of the regulatory regimes. These include detection and inventory of assets on the network, configuration and change management detection and reporting, various kinds of network usage policy enforcement, etc.

    Radware (RDWR) is the only stock on our list that isn't currently profitable. With a forward PE of 22 and a PEG of 0.81, apparently there is an expectation that it will be profitable soon. Lack of profitability hasn't seemed to be a drag on its stock price. Just look at it's chart which has been trending steeply upward. The stock has provided a 50% return since November 2009.

    Radware is the most diversified of the companies listed in this post. Though they have strong offerings in network security including firewalls, IDPS, PCI Compliance, real-time fraud detection, VPNs and VOIP security they are best known for application acceleration, management and monitoring and network optimization. The company is equally at home in enterprise datacenters and at telecom carriers or Internet service providers.

    Conclusion --

    The companies profiled above are all in a hot industry sector. All have little to no debt. None of these companies would ever be mistaken for value stocks based on the metrics listed in the table above. All should benefit from the gradual increase in tech spending that seems to be occurring. But will they benefit sufficiently to justify their current valuations?

    Check Point is probably the safest investment among this group though its size may make it harder to register outsize returns. Radware is less of a network security pureplay but that may actually be a plus. At the beginning of this post I described how many of the biggest tech companies, Cisco, IBM, Symantec, etc., had acquired network security companies. These large companies will offer stiff competition to the companies discussed in this post.

    I can't tell you which of these companies will out-perform but this post should be a good jumping off point for anyone wishing to investigate the sector further.

    Disclosure: no positions in any stocks mentioned in this post



    Saturday, March 6, 2010

    Weekend Winners and Losers - Alert HQ BUY and SELL signals for March 5, 2010

    Winners and LosersThis is our usual quick post announcing that the weekend's free stock signals are now available at Alert HQ.

    Today we have the following stock picks and signals:

    • Based on daily data, we have 28 Alert HQ BUY signals and 3 SELL signals
    • Based on weekly data, we have 9 Alert HQ BUY signal and 5 SELL signals
    • We have 169 Bollinger Band Breakouts based on daily data and 421 Breakouts based on weekly data.
    • We have 752 Cash Flow Kings
    • 20 Swing Signals -- 15 BUY signals and 5 SELL Signals
    • 675 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 184 stocks that are new additions to the list and 58 that fell off the previous list.
    • 54 Trend Busters based on daily data of which 49 are BUY signals. We also have 33 Trend Busters based on weekly data.
    • 148 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. We see 42 downside gaps and 106 upside gaps based on daily data. We also have 63 Gap Signals based on weekly data.
    The view from Alert HQ --

    Nice week in the markets! Two big pieces of news were very well received. First, the ISM Services index showed job growth and economic activity in the services sector were picking up. In related news, a good percentage of retailers reported improved same-store results. All this implied that the U.S. consumer, while claiming to be depressed in sentiment surveys, was beginning to show some optimism when it came to spending some money. Secondly, a surprisingly benign Nonfarm Payrolls report suggested the employment picture was brightening.

    As a result, stocks surged and Alert HQ has been registering an increasing number of BUY signals all week. Today's weekend results show BUY signals to be firmly in the majority. With the Trend Leaders list growing, it is looking like we have broad-based strength and upside momentum. The sharp advances this week are reflected in the large number of upside Gap signals. All in all, a very positive week.

    With stocks poised to move above the 2010 highs established in January, we might be on the verge of a hoped-for breakout to new highs. With that possibility in sight, you might want to have some good investment candidates selected. Browse through Alert HQ and you're sure to find a more than a few!

    Using our signals --

    Visit Alert HQ to view or download your free lists of stock alerts. The alerts based on weekly data show those stocks that have exhibited some good follow-through after a recent trend reversal. If you want to be early in identifying the newest trend reversals, the lists based on daily data are for you.

    If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you have no faith in technical analysis, the Cash Flow Kings may be just what you are looking for. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas. See them all at Alert HQ.

    Remember, we also provide our latest updated Swing Signals, Trend Leaders, Gaps and Trend Busters on Tuesday and Thursday nights.

    Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




    Thursday, March 4, 2010

    Alert HQ signals for Thursday, march 4, 2010

    This post is announcing that Thursday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

    Today we have the following:
    • 14 Swing Signals -- 7 BUY signals and 7 SELL Signals.
    • 549 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 180 stocks that are new additions to the list and 65 that fell off the previous list.
    • 54 Trend Busters of which 49 are BUY signals and 5 are SELL signals.
    • 165 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 71 are bearish gaps and 94 are bullish gaps.
    The view from Alert HQ --

    Stocks have put in a week of gains but those gains have been smaller and smaller of late. Momentum is fading and it's a good bet a down day is on the way but so far, there are no indications the market is going to fall off a cliff.

    At Alert HQ, the Trend Leaders list continues to grow, reflecting the fact that more and more stocks are establishing strong up-trends. The Trend Busters list has also grown and almost all the signals are upside breakouts.We also have more upside gaps than downside gaps.

    Suggesting that things are about to cool off, however, the Swing Signals list has dwindled and BUY signals and SELL signals are neck and neck.

    Looking forward, it was good that Thursday's trading ended with a strong, late afternoon move to the upside. It is also good to see the Nikkei and the Topix up 2% and 1.5% respectively as I write this. All this might lead one to think that Friday will be a strong day for stocks. But...

    In case you are not aware, tomorrow brings four economic reports scheduled to be released before the open: Unemployment Rate,  Nonfarm Payrolls, Hourly Earnings and  Average Workweek. The most important, of course, is the Nonfarm Payrolls report which has a way of moving the market almost every month.

    So I'm feeling cautious tonight but I would still encourage readers to browse through Alert HQ. We have some good candidates that might be cheaper tomorrow than they are today!

    Using our signals --

    If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.


    Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




    Wednesday, March 3, 2010

    Cool cash sets these 5 stocks apart

    Today's screen looks at cool cash or, more precisely, cash plus cash equivalents plus short term investments. These are classic balance sheet entries.

    The screen actually identifies those stocks whose Cash on Hand, as defined above, is greater than 50% of it's market value. The screen then does a cross-reference with those stocks that just recently joined the TradeRadar Trend Leaders list. The result is in the table below:

    Symbol Name Market Cap PE Price To Sales Price To Book Debt To Equity Cash On Hand Dividend
    AFP UNITED CAPITAL CORP. $211,300,000 31.91 3.85 1.12 0.1428 $147,530,000 $0.00
    GFIG GFI Group Inc. $652,600,000 39.63 0.79 1.25 0.1182 $327,280,000 $0.20
    AAWW Atlas Air Worldwide Holdings $951,100,000 8.3 0.87 1.26 0.8096 $637,070,000 $0.00
    ISH INTL SHIPHOLDING CORP. $208,200,000 4.88 0.55 0.9 0.4375 $120,090,000 $2.00
    SONO SonoSite, Inc. $514,000,000 162.35 2.27 2.02 0.3641 $257,750,000 $0.00


    The data was gathered over the weekend via the Alert HQ process so a few of these values may be slightly different if you look them up today.

    Why is this interesting? Because when you buy a share of one of these stocks, you are not only participating in the growth potential of the stock but you are also protecting yourself from owning the kind of over-leveraged company that suffered so much during the Great Recession. Cash is a buffer, a kind of safety net in bad times. A large cash horde can also be a piggy bank that a company can rely on rather than tapping the debt markets -- the expectation being that debt is something that will become less and less attractive as interest rates begin to rise later this year or next year.

    So looking at the table above, you can see that all of these companies have rather low debt to equity ratios. Not only that, as members of the Trend Leaders list they are all exhibiting strong up-trends in their stock prices. The result is momentum and safety rolled into one. Not a bad combination.

    As the focus stock for today, I'll take a closer look at the stock that appears to offer the greatest value: INTL SHIPHOLDING CORP. (ISH). With the lowest PE, the lowest Price to Sales ratio and the highest dividend, this stock appears to have a significant margin of safety. The company operates a fleet of ships including types that transport cars and trucks as well as tankers, container and bulk carriers.

    As further evidence of its value, the company's Enterprise Value/EBITDA ratio is a mere 4.3 and its dividend yield is a high 6.8%. In terms of financial results, the company is riding the trend of slow improvement in the global economy. Revenue is down a bit sequentially but up strongly year-over-year. Net Income has been increasing steadily since hitting a low point in Q4-2008.


    Explore more ISH Data at Wikinvest

    As mentioned above, this stock is on the Trend Leaders list. That means that Aroon, MACD and Wilder's DMI are all reasonably bullish. Here is the stock chart:


    You can see that the stock has surged upward through resistance in the $28 range and is now above both the 50-day moving average and the 200-day moving average. In late January, the company reported a doubling in earnings compared to the year ago quarter but it didn't do anything to arrest the slide in the stock price. Early in February, however, investors seem to have reconsidered and the stock has been on a tear ever since.

    Conclusion --

    It can be said that cash makes things interesting. Here are five stocks that manage to combine outstanding price performance with a comforting level of cash. Dig into this list and see if you don't find some compelling value mixed with a good dollop of momentum.

    Disclosure: no positions in any stocks mentioned in this post



    Tuesday, March 2, 2010

    Alert HQ signals for Tuesday, March 2, 2010

    This post is announcing that Tuesday's Swing Signals, Trend Leaders, Trend Busters and Gap Signals are now available at Alert HQ. All are based on daily data.

    Today we have the following:
    • 16 Swing Signals -- 12 BUY signals and 3 SELL Signals and one Strong BUY.
    • 434 Trend Leaders, all in strong up-trends according to Aroon, MACD and DMI. We have 222 stocks that are new additions to the list and 66 that fell off the previous list.
    • 73 Trend Busters of which 60 are BUY signals and 13 are SELL signals.
    • 169 Gap Signals -- stocks with upside or downside gaps or gaps that have been closed. 81 are bearish gaps and 88 are bullish gaps.
    The view from Alert HQ --

    Another modest gain for stocks today on modest volume.This has been a theme of many rallies over the last six months. As long as stocks advance, though, who's complaining?

    As many pundits question the underpinnings of a rising market, we see our Trend Leaders list surge to include more than 430 stocks and ETFs. This demonstration of broad-based strength is fortified by the expansion of the Trend Busters list -- 60 out of 73 stocks breaking to the upside is a rather bullish statement.

    So it seems like it's still safe to assume to we have a nice short-term rally underway with the potential to extend it into an intermediate-term advance. To take advantage of this move, why not browse Alert HQ to find those stocks generating BUY signals today?

    Using our signals --

    If you're a momentum trader, the Trend Leaders list is a good place to go shopping. If you practice technical analysis, check out the Trend Busters. And if you are a short-term trader or even a day trader, our Swing Signals or Gap Signals may provide some good trading ideas.


    Found a few stock picks you are interested in? If you are looking to refine your entry and exit points, you should take a look at what our friends at Hottinger's E-Zone Signals have to offer.




    Monday, March 1, 2010

    Intel bails on agreement with TSMC - what does it mean?

    I came across an interesting little item on Intel today. The company, a fierce competitor and usually successful in attaining its objectives, seems to have taken a misstep.

    Last week Intel Corp. (INTC) acknowledged that it has no immediate plans to bring to market any Atom chips manufactured by Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC). This confirmed a report that the partnership announced by the two companies last year has hit a stumbling block.

    When it was announced, the partnership was a first for Intel, which had never before allowed outsourcing of it's core microprocessor technology. The objective of the partnership was to make it easier for other companies to integrate Intel's Atom microprocessor core into so-called "system on a chip" semiconductors. This would provide another channel for Intel to sell into the embedded, mobile and handheld device markets where integration of functions, small footprints and low power consumption are paramount considerations.

    Intel spokesperson Bill Kircos said "It's been difficult to find the sweet spot of product, engineering, IP and customer demand to go into production." In other words, no one is beating down the doors to use the Atom chip in devices other than netbooks.

    The failure to get Atom products into production at TSMC appears to signal slower-than-expected progress on execution of Intel's strategy to grow revenue outside of the PC market, where its microprocessors dominate.

    Last year the company took a series of actions seen as gearing up for a broader move into new markets by pushing its x86 architecture deeper into the embedded market and elsewhere. These moves included the TSMC deal and the acquisition of embedded software specialist Wind River Systems Inc.

    What this means for Intel and TSMC --

    Is this a big deal for Intel or TSMC? Not really. Both of these companies are so big this partnership was just a sideshow. It does, however, show how hard it is, even for the premier microprocessor company in the world, to break into new markets. ARM Holdings (ARMH) and MIPS Technologies (MIPS) continue to dominate the market for handheld devices with their low power, customizable, RISC processors. For example, companies that are currently or formerly ARM licensees include Alcatel, Apple Inc., Atmel, Broadcom, Cirrus Logic, Digital Equipment Corporation, Freescale, Intel themselves (through DEC), LG, Marvell Technology Group, NEC, NVIDIA, NXP (previously Philips), Oki, Qualcomm, Samsung, Sharp, ST Microelectronics, Symbios Logic, Texas Instruments, VLSI Technology, Yamaha and ZiiLABS. That's a pretty serious list of customers. Once committed to a processor solution, it's not so easy to switch. Not only are new hardware designs required but all the software needs to be rewritten, too.

    So Intel faces some disappointment in the near term but the company has deep pockets and can afford to maintain a long time horizon. And it looks like it will require a long term approach and a willingness to chip away at the market for smaller, handheld devices. The company has managed to build a good sized business in other kinds of markets like medical imaging systems and industrial controllers so we know that the company has the ability to diversify beyond PCs. We'll see if they have the perseverance to break into cellphones, digital cameras and other markets of this kind, as well. In the meantime, they've got a little egg on their face.




    Blog Archive


    Disclaimer: This site may include market analysis. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.




     
    X
    Support our sponsors!
    Close this ad panelX
    Do you know what the "52 Week High Friday Rule" is?

    Never before shared on the web, this secret technique has been working for 30 years. Check it out right now at MarketClub