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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 - 17
Stocks Screened- 8,200
Bull side - Good number of breakouts today with some interesting plays.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bearish, Nasdaq Bearish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
FDP, based in George Town, Grand Cayman, Cayman Islands, is a producer of fruits and vegetables. Annual revenues: $3.3 billion. FDP breaks out powerfully from a nine-week flat base today after reporting favorable earnings. So far today, the stock is trading 1.4 million shares, 14 times its normal daily volume of 94,400 shares.
The tape action was excellent. One of the largest trades of the day was a big block of 66,400 shares that crossed on a big up tick to $23 from the prior trade at $22.70. (see table)
Although no longer related to Del Monte Foods, the company holds the license to use the name on the fresh fruits and vegetables that it grows, transports, and markets worldwide.
Today, FDP reported net of 84 cents a share, up sharply from 28 cents a share a year ago. The 84 cents surpassed the consensus Street estimate of 40 cents a share and the highest estimate of 52 cents a share.
The margin over the highest estimate was astounding and was the trigger for the stock's sharp advance.
FDP said earnings did better because of tighter cost controls, a simplified product line and better prices.
FDP holds the license on both fresh and canned products in Europe, the Middle East and Africa.
Its Del Monte Gold Extra Sweet pineapples have made it the world's largest pineapple seller, with a 35% market share. The firm is also one of the world's top banana producers, with 14% of the world market. Produce is grown on company-owned farms and purchased from contract growers. The Abu-Ghazaleh family (including CEO Mohammad) owns 44% of the stock.
FDP's powerful move today comes with big volume. The question is if the move is just a blow off and that is it. TTD does not think so. Generally, a stock will move big on great earnings and our studies show the stock has good chances to move higher for about the next four weeks, depending on circumstances.
FDP's technicals are bullish near-term. The stock's TTD momentum indicator is strongly bullish. (see top of chart) The accumulation - distribution line (bottom of chart) has hit a new peak.
This year, TTD is forecasting FDP's earnings will hit $1 a share. The current consensus estimate on the Street was at 76 cents a share. The $1 a share would be a big jump over the weak 9 cents a share a year ago.
The stock sells with a p/e ratio of 23 based on this year's TTD projection.
Going out to next year, analysts see a 31% gain in net to $1.31 a share.
For the next quarter, FDP's net should be up 33% to 36 cents a share form 27 cents a year ago.
Strategy Opinion: Food stocks tend to be conservative plays. However, the big profit outlook could make FDP look like a high powered growth stock. Because FDP is a bit extended near term, TTD suggests a scale in strategy. We are calling for the stock to climb to 29 within the next few months. A protective stop can be placed near 20. TTD rates FDP an excellent intermediate-term play because of the strong earnings outlook.
Sponsorship: Excellent. The largest fund holder is 5-star rated Fidelity Low-Priced Stock Fund with a a big 10.1% stake. It has held its position steady. A key buyer recently was 5-star rated Target Small Capitalization Value Fund, which added 28,000 shares.
Insider Activity: Not available. Two analysts follow the stock, one was neutral, one had a sell. So, there was a big surprise for Wall Street.
| TTD's Breakout Profile
Rating Fresh Del Monte Produce Inc. (FDP) |
| 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 | 11 | 3 | 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 provides a list of potential breakout stocks from our screen of companies that will show some of the strongest earnings gains. One of the best ways to play these stocks is to study the list and then put a stop buy order in to catch the stock on the breakout.
One can take either take a full position on the breakout if they are aggressive, or scale-in looking to add to the stake later if they are conservative. TTD's premarket breakout watch list gives you a great opportunity "to be prepared for the next key breakout stock just before it happens." The list will be updated about every week.
Guide: Symbol=Ticker, Name=Corporate name, Entry is the buy price to enter on the breakout, Last=prior close, Change=change from last close to prior, Date=date of price of close etc, Gain in blue is price above breakpoint (entry), Gain in red is price below breakpoint (entry)., % Gain in blue is % over breakpoint (entry), Gain in red is % below breakpoint (entry)
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 - 9
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Breakdown list expands modestly. Bears be a bit more aggressive going after shorts 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.)
CC, based in Richmond, Va., is third largest consumer electronics retailer in the US. CC has 640 superstores in 45 states. Annual revenues: $11.6 billion. Today, CC falls sharply undercutting key support near 17.50. The drop came after the company predicted a loss for the fiscal first quarter ended May 30. The stock's decline today come on heavy volume.
So far today, CC is trading 19.6 million shares, almost four times its normal daily volume of 5.1 million shares. The tape action was very bearish. TTD's clip of the tape shows a big block of 365,200 shares crossing in the morning on a big down tick to $15.70 from the prior trade at $15.77. The action indicated massive institutional selling.
CC sells televisions, DVD players, and audio systems, as well as CDs and DVDs.
The company also sells personal computers and peripherals, mobile computing devices, telephones, and video games. In addition to its retail stores, CC sells products through its Web site. CC's international operations are conducted by Canadian subsidiary InterTAN, which operates 800 outlets.
The company said sales for April were below plans. It said it expects a loss before taxes for the fiscal first quarter ending Mary 30 of $80 ot $90 million.
Technically the stock is acting very bearish. TTD's daily chart shows the breakdown today on big volume. The stock's TTD momentum indictor (top of the chart) is very bearish. The accumulation - distribution line (bottom of the chart) is trending lower). That indicates the stock remains under heavy selling pressure.
TTD sees CC as an excellent short. We are targeting the stock for a decline to 11 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.)