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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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Total Buy Breakouts so far today - 15
Stocks Screened- 8,200
Bull side - A modest number of breakouts today, but some excellent high-growth stock plays. Bulls be venturesome.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bullish, Nasdaq Bullish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
SPWR, based in San Jose, Ca., makes solar cells and panels, used to generate electrical power. Annual revenues: $237 million. SPWR breaks out powerfully from a nine-week, double bottom base today and hits a new high. Volume for SPWR has swelled to 2 million shares, double its normal daily turnover of 1 million shares.
TTD highlighted SPWR as a stock to accumulate in our March 28 TTD Pro report.
The stock was also covered in our midsession show on the Web Wednesday.
The volume for SPW is the highest in six months. The stock showed bullish signs as it based. TTD's clip of the tape going back to April 2 showed two big blocks crossing on significant up ticks. The first was a block of 250,000 shares at 47 and the second was 250,000 shares at 47.
So the stock was under big institutional accumulation prior to today's breakout. That puts good support under the stock.
SPWR also sells imaging and infrared detector products that SunPower makes using its thin-wafer manufacturing process for solar cells. Two of SPWR's largest customers are Conergy and Solon, which each account for 25% of sales. Cypress Semiconductor owns 70% of SPWR.
A look at TTD's daily chart of SPWR shows the clean breakout from the base on expanding volume. The key resistance area was at 48. The stock pushed through that point convincingly.
SPWR's TTD momentum indicator has edged back into the bullish zone. (see top of the chart) The accumulation - distribution line which had been weak has now turned up, although it still lags. TTD can live with that.
This year, analysts predict SPWR's net will be around 91 cents a share. Year-ago results were not available. The highest estimate on the Street is at $1.03 a share.
The stock sells with a price-earnings ratio of about 47. That would seem high. However, SPWR's earnings growth for 2008 is expected to be 70% with net climbing to $1.55 a share. So, the high p/e ratio is setoff by the very good earnings outlook.
There was good news recently. SPWR and GE dedicated a new solar power plant in Serpa, Portugal, one of the sunniest spots in Europe. That may opened the door for more business in Europe.
For the upcoming first quarter SPWR's earnings growth should surge 350% and in the second quarter 139%. Net for the first quarter should be 18 cents a share, up from 4 cents a year ago. Profits for the second quarter should be 19 cents a share, up from 8 cents a year ago.
Strategy Opinion: In our accumulation report on SPWR on March 28, TTD said it was very bullish on the stock and expected a breakout at any time. So, here it is. TTD suggests a full position in SPWR. We are calling for the stock to advance to 60 within the next few months. A protective stop can be placed near 45. TTD rates SPWR a very good intermediate-term play because of the strong earnings outlook.
Sponsorship: Excellent. Three of the top four fund holders have a 5-star rating, highest from Morningstar. The largest buyer recently was 5-star rated Janus Overseas Fund which purchased 911,000 shares. 5-star rated Baron Growth Fund picked up 742,000 shares.
Insider Activity: Neutral. Insiders were buyers recently around 44 using stock options, but turned around and sold. Currently, 16 analysts follow the stock, 11 have a buy, up from 10 three months ago. Banc of America has a $57 target and Lazard Capital has a $60 target.
| TTD's Breakout Profile
Rating Sunpower Corp. (SPWR) |
| 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 - 8
Stocks Screened -
Long-Term Environment for bears: Unfavorable.
Bear Side - Small list of breakdowns today. However, two sectors showing clear bearishness are the employment stocks and railroad stocks. Bears can be venturesome in those two sectors.
(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.)
GBX, based in Lake Oswego, Ore., makes, repairs, and refurbishes railcars. Annual revenues: $954 million. GBX falls sharply today in heavy trading after reporting a loss for the fiscal second quarter ended Feb. 28. The news came as a big surprise as the Street was expecting a profit. So far today, GBX is trading off almost 4 points. Volume is running at 2.9 million shares, about eight times its normal daily volume of 318,000 shares.
The weakness in GBX is also pulling down other stocks in its group such as Pacer Intl. (PACR) which is off 1.61 to 25.89 so far today.
GBX said for the fiscal second quarter it had a loss of 38 cents a share compared with a profit of 54 cents a year ago. It said it plans to close its unprofitable Nova Scotia rail plant.
GBX's railcar line includes 100-ton-capacity boxcars, intermodal railcars, tank cars, and conventional railcars such as gondolas, center-partition cars, and flat cars.
The company's leasing unit owns and manages a fleet of about 9,000 railcars and manages another 135,000 railcars on behalf of railroads and other transportation and leasing companies in North America. GBX also makes marine vessels, primarily ocean-going barges.
This fiscal year ending August 30, TTD is forecasting a 20% drop in earnings, or more. So, the company is really having fundamental problems.
The stock's technical pattern is "a ride South." The gap breakdown today on big volume indicates investors are fleeing the stock. The TTD momentum indicator is now bearish (see top of the chart). The accumulation - distribution line, which was improving, has now broken down.
TTD sees GBX as a good play for bears and we are targeting the stock for a trip down to 18 within a few months, or sooner.
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.)