the Trade-Radar + TradingStockAlerts blog

Last week I wrote a post titled " Weekly Market Update - cracks in the foundation? ". It was the first time in quite a while that I had written one of these posts that presented TradeRadar statistics and reviewed what those statistics might be saying about the state of the market. Last week I voiced my worry that breadth was was deteriorating and that, sooner or later, this would have a negative impact on the progress of the current rally. Though stocks managed to eke out another gain this past week, the underlying situation has not improved. If anything, it has gotten worse. The view from Alert HQ -- For those readers who are new to TradeRadar, the data for the following charts is generated from our weekly Alert HQ process. We scan roughly 6200 stocks and ETFs each weekend and gather the statistics presented below. In this first chart below we count the number of stocks above various moving averages and count the number of moving average crossovers, ...

Glancing through the Over-Valued Over-Bought Report at the Alert HQ Premium site I noticed that Riverbed Technology (RVBD) was on the list. The following chart gives you an idea about the over-bought aspect: In terms of over-valued, consider some of the measures by which we generally evaluate stocks at Trade-Radar: PE is 242, roughly 8 to 10 times higher than most growth stocks Price to Sales is 7.33 close to triple what we see in many tech stocks with good growth characteristics PEG is 1.75, high even for a growth stock Enterprise Value to EBITDA is over 67 which is 10 times what you might see in a value stock and at least 6 times what you might see in other good growth stocks Granted, the company is executing extremely well. Riverbed just reported Q3 earnings of $0.34 versus $0.27 estimates. Revenue increased 17% sequentially to $148M vs $135M estimates. Nevertheless, it's hard to see how that justifies the valuation measures described above. After today's dro...

We're pretty well along into earnings season and this is a good time to take stock of how the numbers are stacking up. Below is a table that lists each sector shows the results as of Tuesday's earnings reports: Sector Earnings Beats Y-o-Y Earnings Increases Y-o-Y Revenue Increases Upside Guidance Total Providing Guidance Total Number of Stocks Reporting Basic Industries 24 26 35 5 13 40 Capital Goods 51 51 51 15 34 59 Consumer Durables 36 34 38 9 28 46 Consumer Non-Durables 26 28 29 6 14 34 Consumer Services 44 47 49 6 35 69 Energy 23 18 22 6 31 Finance 80 70 36 4 9 106 Health Care 25 25 36 8 25 43 Miscellaneous 13 10 11 1 10 15 n/a 1 1 1 1 1 Public Utilities 20 18 20 4 13 26 Techn...

I thought this was a pretty good week for those who like stocks with dividends. According to our Dividend Growers report , there were 50 stocks that increased dividends last week. Unfortunately, there were also 32 stocks that cut their dividends. It's worth looking at the composition of each list. One thing that jumps out is that of the 50 that increased dividends, 22 were funds, not actual companies. Many of the companies that are on the list, though, were in the energy, financial or REIT sectors. Similarly, of the 32 stocks that reduced dividends last week , 22 are funds. Interestingly, seven of these dividend cutters are municipal bond funds. With interest rates on government and corporate bonds at historical lows, it is no wonder that bond funds of all types are reducing their payouts rather than chasing yield by going further out on the risk continuum. What dividend lovers might like, however, is the list of value stocks with increasing dividends , what I call Reasonable...

It's been over a month since I posted a weekly market update. During that time markets have been moving steadily higher. As of this weekend, however, I am seeing a bit of a turn in our market statistics. The view from Alert HQ -- The data for the following charts is generated from our weekly Alert HQ process. We scan roughly 6200 stocks and ETFs each weekend and gather the statistics presented below. In this first chart below we count the number of stocks above various moving averages and count the number of moving average crossovers, as well. We then plot the results against a chart of the SPDR S&P 500 ETF (SPY). This chart shows that roughly 5 out of 6 stocks closed above their 50-day moving average two weeks ago but that number decreased over the course of this last week. In addition, there has been a negative cross-over where the number of stocks above their 50-DMA has declined below the number of stocks whose 20-DMA is above their 50-DMA. ...

Today I'd like to feature a stock that appeared in one of the screens at Alert HQ Premium . The screen is titled "Value and Growth Report" and, as the name implies, we look for stocks that embody the best of both worlds: value and growth. How the screen works -- Using daily and weekly data, we look for stocks that are in up trends or have broken out above their trend lines. Trend lines are constructed using the daily high prices. A stock must rise 5% above the trend line to trigger a BUY signal. Out of this group of stocks on the move we identify those that have "reasonable value" characteristics according to the following criteria: PE between 0 and16 PEG between 0 and 1.2 Price-to-Sales less than 2 Debt-to-Equity less than 1 EV to EBITDA less than 10 We then filter for those stocks with earnings and revenues that have shown improvement both year-over-year and sequentially and whose EBITDA is the same or greater compared to the previous quart...

I typically don't dwell too much on the Opinion section of the Wall Street Journal. Since Karl Rove became a frequent contributor, this is a page that I generally can't bypass quickly enough. In Wednesday's paper, however, in the dreaded Karl Rove spot on the page, was a piece by John Chambers and Safra Catz. As a follower of tech stocks, I immediately recognized the names of, respectively, the chairman and CEO of Cisco Systems and the president of Oracle. These are business people with serious credibility who are not usually associated with any extreme political positions. I stopped to read further. Their article, "The Overseas Profits Elephant in the Room" revisits some territory that has been covered by a number of bloggers recently. Basically, they contend that U.S. companies have a trillion dollars stashed overseas in their foreign operations but U.S. tax policy makes it prohibitively expensive to bring that money back to the U.S. where it could be used p...