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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 - 13
Stocks Screened- 8,200
Bull side - Good number of breakouts today with some interesting high-growth plays. Market is acting strong considering February is generally weak. Bulls be selective.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bullish, Nasdaq Bullish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
LH, based in Burlington, N.C., is one of the top providers of clinical laboratory services in the world. Annual revenues: $3.5 billion. LH breaks out powerfully today after reporting favorable earnings. The stock's push to a new high comes off a nine-week flat base. Trading so far today is running at 5 million shares, five times its normal daily volume of 841,000 shares.
TTD highlighted LH as a breakout at our midsession show on the Web.
The stock's move today is impressive given the fact it has a beta of just 0.27. That means the stock is only about a one-fourth as volatile as the S&P 500, which has a beta of 1.00. Beta is a measure of volatility.
LH performs tests on more than 350,000 patient specimens each day on behalf of managed care organizations, hospitals, doctors, government agencies, drug companies, and employers.
Most of its tests are routine test such as urinalyses, HIV tests, and Pap smears. LH also offers specialty testing services, including diagnostic genetics, oncology diagnosis and monitoring, infectious disease testing, clinical drug trials testing, and allergy testing.
Today, the company reported that net from operations for the fourth quarter jumped 27% to 81 cents a share from 64 cents a year ago. The results topped the consensus Street estimate of 72 cents a share and even the highest estimate of 75 cents a share. TTD has said a company that can produce earnings that top the highest estimate on the Street can often do very well with its stock.
Net sales for the quarter were $898.6 million, an increase of 9.3% compared to the same period in 2005. Compared to the fourth quarter of 2005, testing volume, measured by accessions, increased 5.6%, and price increased 3.7%.
This year, LH's earnings growth show pick up from the teen pace of 2006. Profits for 2007 should climb 23% to $4.05 a share from the $3.30 a share in 2006. The stock sells with a price-earnings ratio of just 20, which is reasonable.
TTD's daily chart shows a solidly bullish pattern. The breakout today comes on strong volume, the TTD momentum indicator (top of the chart is bullish) and the accumulation - distribution line has turned up.
A big block of 402,300 shares crossed the tape in the morning at 79.63 within a sequence started by an up tick. So, the stock is drawing strong institutional buying.
Strategy Opinion: LH is a solid medical play. TTD's long-term chart shows the bullish trend. LH is a bit extended near-term. TTD suggests a scale-in strategy. We are targeting the stock for a move to 92 within a few months. A protective stop can be placed near 74.
TTD rates LH a solid and good intermediate-term play because of its consistent earnings growth, which we see continuing.
Sponsorship: Good. The largest fund holder is 5-star rated Vanguard Health Care Fund with a 2.4% stake. It has held its position steady. The largest buyer recently was 4-star rated BlackRock Large Cap Cor eFund which purchased 610,000 shares. Also, Fidelity Growth Companies Fund, 4-star rated, bought 475,000 shares.
Insider Activity: Neutral. Not much action lately. Seven analysts follow the stock, 4 have a buy, 3 are neutral. There were 6 analysts with a buy, and 8 neutral three months ago.
TTD's Breakout Profile
Rating Laboratory Corp. of America (LH) |
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 | 13 | 0 | 1 |
(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 Digests 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 - 5
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Only a few breakdowns today. Bears be selective. Energy stocks retreating.
(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.)
RNWK, based in Seattle, produces internet software for digital media. One of its key products is the real player. Annual revenues: $325 million. Today, RNWK falls sharply and triggers a TTD short play. The stock is off 1.50 points so far today, or 14%. Volume is running at a heavy 14.4 million, seven times its normal daily volume of 2.1 million shares. The fall is due to a weak revenue forecast and a downgrading by two brokerage houses.
The companys RealPlayer product produces streaming audio, video, and other multimedia content.
Its software and subscription services provide access to news, sports, and entertainment content (RealOne), downloadable games (RealArcade), and streaming and downloadable music (Rhapsody, RealPlayer Music Store, RadioPass).
The company also serves the enterprise market with tools for creating, delivering, and licensing digital content. Founder and CEO Robert Glaser owns about 30% of the stock.
The company forecast revenues for 2007 at $540 to $560 million. That was below the Street consensus estimate of $572 million. The weaker than expected forecast triggered selling.
TTD's clip of the tape shows a big block of 24,000 shares crossing in the morning on a down tick to $9.18 from the prior trade at $9.19.
RNWK is also feeling competitive heat from Microsoft. This year, RNWK's earnings are projected by analysts to fall 51% to 39 cents a share from 80 cents a year ago. Today's the stock gaps lower with big volume (see TTD's chart). The stock's TTD momentum indicator is deeply bearish and the accumulation - distribution line (bottom of the chart) has rolled over.
TTD sees RNWK as an ideal short for an aggressive bear. TTD is calling for the stock to decline to 7 within a few months. The stock has the potential to collapse greatly.
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.)