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By Leo Fasciocco -- TTD
Ticker Tape Digest presents its daily breakout and Short Selling report. It contains Breakout Stocks and Stocks under Significant Accumulation.Data is from tape action for the day. These stocks are most suitable for aggressive investors seeking ideal entry points for leading stocks.
These stocks will do very well during bull markets and strong market rallies.
TTD also presents Stocks To Sell or Sell Short.These issues are suitable for aggressive investors willing to take short positionsboth as trades or for longer-term plays. These stocks will do very well during bear markets or market corrections
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To email Leo leo@tickertapedigest.com.For service, email Beverly Owen owen@tickertapedigest.com. TTD’s Tel: 1-480-926-1680.
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Total Buy Breakouts so far today - 11
Stocks Screened- 8,200
Bull side - Housing stocks, a lagging group dominates the breakout list today. Bulls be selective going with high growth companies.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bullish, Nasdaq Bullish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
FMX, based in Monterrey, Mexico, is one of the largest beverage producers in Latin America. Annual revenues: $5.4 billion. FMX clears its seven week flat base today and hits a new 52-week high. The stock has been an outstanding performer for this bull market having soared from 38 in 2003 to its present peak at 125. So far today, the stock is trading 494,400 shares. Its average daily volume is 355,000 shares.
The company's FEMSA Cerveza subsidiary brews beers such as Bohemia, Carta Blanca, Dos Equis, Sol, and Tecate.
Its Coca-Cola FEMSA subsidiary (46% owned) is the second largest Coca-Cola bottler in the world (behind Coca-Cola Enterprises).
It bottles Coca-Cola, Sprite, and other soft drinks in nine Latin American countries. FEMSA also owns more than 3,460 OXXO convenience stores in Mexico's major cities. FEMSA honorary chairman Eugenio Lagüera is one of several board members who participate in a trust that owns 37% of the company.
FMX actually pushed out of its base on Thursday. The move higher today is good and does not make the stock overextended on the upside. TTD's list of big block trades today shows several in the blue, which are bullish. They are trades going off above the asked. A key one was on Jan. 30 when a big block of 16,400 shares traded at 117.
Note even though there are some bearish blocks (in red) the price of the blocks has been climbing. So, that is a good technical positive for the stock.
The stock's TTD momentum indicator is solidly bullish. The accumulation - distribution line (bottom of the chart) has pushed to a new high. This is good confirmation that the price rise in the stock is being supported by good buying demand.
This year, FMX's earnings should rise 18% to $5.96 a share from the anticipated $5.03 a share a year ago. The stock sells with a price-earnings ratio of 21, which is reasonable given the projected earnings growth.
Strategy Opinion: FMX is a solid conservative play. The good outlook for earnings this year should support a higher price for the stock. The technical breakout is the key. TTD is looking for FMX to climb to 140 a share within a few months. A protective stop can be placed near 117.
TTD rates FMX an average intermediate-term play.
Sponsorship: Very Good. One of the largest fund buyers recently was 5-star rated Fidelity Diversified International Fund, which purchased 143,000 shares. Also, 4-star rated Vanguard International Value Fund picked up 233,000 shares. The largest fund holder is 4-star rated Dodge and Cox International Fund with a 2.6% stake.
Insider Activity: Not available. Six analysts follow the stock, 5 have a buy, the same as three months ago. Merrill Lynch put out a buy on Jan. 27. It said the firm's acquisition of Brazil's Kaiser would be beneficial.
| TTD's Breakout Profile
Rating Fomento Economico Mexicano (FMX) |
| TTD Check List | Bullish | Bearish | Neutral |
| Near 52-week High | YES | ||
| Volume | YES | ||
| Tick Volume | YES | ||
| Price Trend - Daily | YES | ||
| Price Trend - Long Term | YES | ||
| Price Daily Spread | YES | ||
| Base Structure | YES | ||
| Base - A-D | YES | ||
| Earnings-Quarterly | YES | ||
| Earnings-Long Term | YES | ||
| Earnings Outlook | YES | ||
| Industry Group | YES | ||
| Prior Breakout Success | YES | ||
| Fund Sponsorship | YES | ||
| Total Score | 14 | 0 | 0 |
(The “breakout List” gives all stocks breaking out of a base of five weeks or more. These stocks have a good chance to trend higher. However, a stop should be used to avoid those that do not work.
(Trading strategy: One should buy breakout stocks at breakpoint by using market order or stop buy)
Ticker Tape Digest’s Daily List of “Stocks To Sell or Sell Short” ranks stocks well timed to be sold immediately based on daily trading. The list can be used as an alert to reduce current long-term positions.
Shorts from tape action so far today - 10
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Shot list starting to expand with some interesting plays. Bears try to go with companies with fundamental problems.
(Trading strategy: These stocks can be sold short, or if held should be sold. If a stock is sold short, a protective stop buy should be placed. Short plays work best when the stock market is in a down trend.)
RACK, based in Milpitas, Ca., provides rack-mounted computer servers designed for large-scale data center deployments. Annual revenues: $215 million. RACK's stock looks like it is on the rack. Today, the stock gaps lower after the company reported a big drop in earnings. The stock is off about 3 points. Volume is running at 15.9 million shares, almost four times its normal daily volume of 4.2 million shares.
The selling pressure continues in the afternoon. TTD's clip of the tape shows a big block of 25,000 shares crossing on a big down tick to $16.76 from the prior trade at $16.85. The action indicates a flight away from the stock by some institutions.
The company's customers include Amazon.com, 24% of sales, Deutsche Bank, Lawrence Livermore National Laboratory, (Toshiba America Electronic Components and (Yahoo!, 22% of sales. Microsoft makes up 14% of sales. RACK relies on contract electronics manufacturers, primarily Sanmina-SCI and SYNNEX, to produce its servers.
RACK came in with fourth quarter net of 2 cents a share, down sharply from 32 cents a year ago. The company blamed profit margin problems due to competition for the disappointing results.
The stock is "damaged property." A look at TTD's chart shows the recent gap breakdown from 33 to 22. The stock is now sinking fast and earnings are declining. Technically, RACK's TTD momentum indicator is extremely bearish (see top of the chart) and the accumulation - distribution line is in a nose dive (see bottom of the chart.
TTD sees RACK as a very good short for aggressive bears. We are targeting the stock for a decline to 12 within the next few months.
TTD columnist Leo Fasciocco has covered the stock market for over 20 years. His articles appear in many publications. He is also a speaker at the Intershow conferences. He has been on television and radio. He is author of many educational articles about stock investing and the book “Guide To High-Performance Investing.”
For information to subscribe to the Ticker Tape Digest Services call: B. J. Owen at 1-480-926-1680. Distributed by Corona Publishing Enterprises. Ticker Tape Digest Inc. P.O. Box 2044 Chandler, Az. 85244-2044. TTD “Professional Report” is available on the World Wide Web: $100 per month. Password needed. “TTD Professional“ Faxed is $200 per month. The TTD Daily Report is $39.95. Credit cards accepted.
(The information contained has been prepared from data deemed reliable but there is no guarantee of complete accuracy. Ticker Tape Digest Inc. is not affiliated with any broker, dealer or investment advisor. Nothing in this publication constitutes an offer, recommendation or solicitation to buy or sell any securities. Further research is advised. This report is copyrighted and no redistribution is permitted with out permission. Some of the charts are from Telescan, Insight Trading, First Alert and other sources.)