Ticker Tape Digest

    EW, based near Los Angeles, makes medical devices and equipment for advanced stages of heart disease. Annual revenues: $1.2 billion. EW was spun off from Baxter International in 2000. Today, EW drives sharply higher after reporting strong first quarter net. The move carries the stock out of a 12-week base. So far today, EW is trading 2 million shares, four times its normal daily volume of 480,000 shares.

  TTD highlighted EW as a stock to accumulate in a recent report. The stock was also featured today on the TTD internet show at midsession.

  The stock is up about 6 points so far today. It rose sharply in the morning and then peaked in the afternoon.

  TTD's clip of the tape shows the big blocks today. One can see the price for the blocks working higher from $57.77 to $63.51. That indicates steady buying from institutions throughout the day. That is very bullish.

  EW came in with first quarter net of $1.03 a share, up from 31 cents a year ago. The net topped Street estimates. The stock responded well. Also, Credit Suisse put out an outperform rating with a $73 target.

  In a recent report, TTD noted that  EW's stock has held up well against the bear market. The past 12 months the stock climbed from 45 to a peak of 63. In recent weeks it has been in a basing pattern. With solid earnings growth in the mid-teens coming this year, TTD sees good chances for more on the upside.

  EW's main products include tissue heart valves, surgical clips, catheters and retractors, and monitoring systems used to measure a patient's heart function during surgery. The firm gets 50% of its sales outside North America.

  TTD's long-term chart shows the stock climbing from 12 in 2000 to a peak of 66 last year.

  TTD's daily chart shows the stock in a cup-and-handle base. However, it was unable to breakout and the base morphed to a flat base. Today's breakout is powerful with a big widening of the spread and strong volume.

 The base was setup after the stock rallied from 46 to 62 - a nice move.

  The stock's accumulation - distribution line (bottom of chart) is in an overall up trend. That shows there has been good buying in the stock and no unusual selling.

  The TTD momentum indicator (top of chart) is neutral.

  This year, analysts predict a 17% increase in profits to $2.97 a share from $2.55 a year ago. The stock sells with a price-earnings ratio of 20. TTD sees that as reasonable. One good item about the company is the consistent earnings growth.

  With today's strong results, TTD sees good chances for year estimates to be boosted, perhaps to 20% growth.

  Going out to 2010, the Street looks for a 16% increase in net to $3.44 a share.

  The company is benefiting from strong sales of its heart valves.

    Net for the second quarter is expected to increase 16% to 77 cents a share from 66 cents a year ago. The highest estimate on the Street is at 79 cents a share.

  Strategy Opinion:  EW is a powerful breakout. It is now extended. TTD suggests scaling in with a view to averaging up quickly. TTD had been targeting the stock for a move to 72. We are now lifting that to 74. A protective stop can be placed near 60. TTD rates EW an above average intermediate-term play.

  Sponsorship: Excellent. TTD counts 5 funds with a 5-star rating holding the stock. The largest buyer among them was 5-star rated Fidelity Select Medical Equipment Fund which purchased 240,000 shares. EW has 55 million shares outstanding. Funds hold 23.7 million shares.

  Insider Activity: Neutral. Insiders have been buyers using stock options. They turned around and sold. Currently, 13 analysts follow the stock, 7 have a buy, the same as three months ago.   

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