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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 - 23
Stocks Screened- 8,200
Bull side - Good number of breakouts today with some interesting high-earnings growth plays. Bulls be venturesome.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bullish, Nasdaq Bullish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
FARO, based in Florida, makes machines that can do reverse engineering and inspect parts. Annual revenues: $125 million. FARO, a rebounding tech play that has doubled the past six months from 12 to 26. breaks out today from a six-week flat base. With earnings to pick up sharply this year, TTD sees very good chances for more on the upside.
So far today, FARGO is trading 166,915 shares. Its average daily volume is 100,000 shares.
The stock is showing strong tape action. TTD's clip of today's tape shows a big block of 11,300 shares - the largest trade of the day - going off on a nice up tick to $26.13 from the prior trade at $26.06.
TTD spotted strong accumulation in the stock last week. On Feb. 15, two key big blocks crossed the tape on up ticks.
The first was a block of 12,500 shares crossing at $25.27, up from the prior trade at $25.26. The second was a big block of 10,000 shares crossing on an up tick to $25.27 from the prior trade at $25.22. The tape action indicates significant and subtle institutional accumulation.
FARO's Control Station measuring system can facilitate reverse engineering of an undocumented part or a competitor's product. The FARO Arm is a portable, jointed device that simulates the human arm's movement and works with FARO's CAM2 3-D measurement software to take measurements, perform reverse engineering, and inspect parts by comparing them to digital designs.
Aerospace, automotive, consumer goods, and heavy equipment companies such as Boeing, Caterpillar, General Motors, and Siemens use FARO Arm units in their factories. The company has nearly 5,000 customers worldwide.
TTD's daily chart of FARO shows the stock in a six-week base that was set up after a strong move higher late last year. The base is well formed and FARO looks ready to breakout at any time.
The technical pattern is superb. The stock's TTD momentum indicator (top of the chart) is strongly bullish. The accumulation - distribution line (bottom of the chart) has broken out to the upside. That is often a good advance signal that the stock's price will do the same. It did!
TTD's long-term chart of FARO shows the stock had a powerful move higher in 2003 - the first year of the bull market. Since, then the stock has not done much as it been stuck in a trading range.
The range is between roughly 15 and 32. The stock is positioned to move across the range and attack its all-time high.
This year, FARO's earnings should surge 101% to $1.13 a share from an anticipated 56 cents a share a year ago. The stock sells with a modest price-earnings ratio of 22.
FARO will be racking up some strong earnings the next two quarters. For the upcoming fourth quarter, net should come in at 26 cents a share compared with one cent a share a year ago. The highest estimate on the Street is at 27 cents a share. The past two quarters FARO has topped the consensus estimate by 10 cents a share and 3 cents. TTD sees chances for another upside surprise for the fourth quarter, especially since the stock is acting very well.
Looking at the first quarter of the years, analysts predict earnings should surge 533% to 19 cents a share from 3 cents a year ago. The highest estimate on the Street is at 22 cents a share. The company's sales growth is running at 18% and its profit margin is expanding. The company said its business is expanding in Europe and Asia.
Strategy Opinion: TTD is targeting the stock for a move to 33 within the next few months. A protective stop can be placed near 24. TTD rates FARO a very good intermediate-term play provided earnings meet expectations.
Sponsorship: Very Good. The largest fund buyer recently was 5-star rated Royce Value Plus Service Fund which purchased 176,000 shares. It is now the second largest fund holder with a 4.5% stake. Another key buyer was 4-star rated Bridgeway Ultra-Small Company Market Fund which purchased 146,000 shares.
Insider Activity: Neutral. Not much activity lately. Three analysts follow the stock, two have a buy, one is neutral.
| TTD's Breakout Profile
Rating Faro Technologies Inc. (FARO) |
| 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 | 12 | 0 | 2 |
(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 - 4
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Only a few breakdown stocks today as the market lifts. Bears be selective. Energy sector very weak. TTD's recent bear play Baker Hughes Inc. (BHI) falls 1.51 to 63.53 today. It is working nicely for bears.
(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.)
IIG, based on Orem, Uth., formerly Netgateway, provides software and e-commerce services that enable small businesses to establish online storefronts. Annual revenues: $185 million. IIG, an Amex stock, breaks below key support today to trigger a TTD short play. The stock is off 1.14 so far today. Volume is running a 1.2 million shares. Its average daily volume is 894,000 shares.
The selling pressure on the stock has continued into the afternoon. A look at TTD's table of the tape shows a big block of 4,900 shares crossing on a down tick to $18.50. That was preceded by two other big blocks on down ticks.
A look at TTD's daily chart of IIG shows the stock's breakdown today is taking place from a head-and-shoulder pattern. That is very bearish and bodes well for bears.
The company's software helps merchants to create and maintain their e-commerce site and process orders.
IIG, which also does business as Galaxy Mall and Stores Online, promotes seminars around the country to sell its products to aspiring e-commerce mavens. It attracted controversy when customers accused the company of charging excessively for services associated with its software. Those services include consulting, creative design, transaction processing, data warehousing, and help desk
Earnings growth will slow. For the upcoming fiscal third quarter ending March 31, the Street is forecasting just a 5% rise in net to 23 cents a share from 22 cents a year ago. For the fiscal fourth quarter ending June 30, profits are expected to drop 9% to 29 cents a share from 32 cents a year ago. TTD sees the slowdown in profit growth as the key negative fundamental to send the stock lower.
Technically, IIG's stock has been under selling pressure for several weeks. The stock's TTD momentum indicator (top of the chart) has been in the bearish zone since the stock broke below 26. The accumulation - distribution line confirms the weakness as it is trending lower. TTD sees IIG as a good trading short for aggressive bears. TTD is calling for the stock to fall to 13 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.)