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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 - 19
Stocks Screened- 8,200
Bull side - Good number of breakouts despite "soft market" today. Oil stocks starting to perk up. Bulls can be venturesome.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bullish, Nasdaq Bullish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
SLXP, based in Morrisville, N.C. develops drugs for gastrointestinal diseases. Annual revenues: $155 million. SLXP shops for drug products that are nearing commercial viability. It then takes them through the final development stages and brings them to market. Today, SLXP breaks out from a seven-week flat base on expanding volume.
SLXP's stock had a big run up in 2003 and 2004 soaring from 4 to a peak of
24. The stock afterwards sold off sliding back to 10 (see TTD's long-term
chart). SLXP bottomed and is well positioned to move higher as earnings growth
starts to accelerate.
The firm's products already on the market include Colazal (for ulcerative colitis), Azasan (immune system suppressant), Proctocort (hydrocortisone suppositories and cream for hemorrhoids), and Xifaxan (an antibiotic to prevent travelers' diarrhea).
Its string of drug candidates awaiting FDA approval include bowel purgatives and another treatment for ulcerative colitis. SLXP's 150 person sales and marketing team targets gastroenterologists.
So far today SLXP is trading 476,690 shares. Its average daily volume is 327,000 shares.
TTD spotted very good accumulation on the tape late on Tuesday. Our clip of the tape shows a big block of 3,991 shares crossing on a big up tick to $15.16 from the prior trade at $15.04. Notice on our tape that the price fell back after the big block crossed. So, clearly the buying was very aggressive in that someone was willing to pay up to get into the stock.
SLXP is technically bumping up against the top of its cup and handle base at 15.
Technically, the stock is set up well. SLXP's TTD momentum indicator has been bullish for several weeks and remains so. Most importantly, the accumulation - distribution line (see bottom of the chart) has pushed out of its base. So, that is a good sign the stock probably will follow.
A look at TTD's long-term chart of SLXP shows that the stock spent a lot of time in the 15 to 25 range - about two years. So, the stock now appears to be returning to that zone. That is good news and bad.
The good news is that near-term SLXP should move higher and get back to that range. However, the key long-term will be to see if SLXP can overcome the upside resistance and eventually break through the top of its long-term base.
SLXP's fundamentals look great. This year, earning should climb 32% to 85 cents a share from an anticipated 64 cents a share for 2006. The stock sells with a price-earnings ratio of jus 17 making it an excellent value-growth play.
What is more, the company should be showing an acceleration in quarterly earnings growth. For the upcoming fourth quarter report, the Street is estimating a 54% increase in net. Profits for the next quarter, the first, should show an acceleration with a gain of 88%. Accelerating quarterly earnings growth is an extremely powerful driver to send a stock higher.
SLXP's net for the fourth quarter should come in at 26 cents a share, up from 17 cents a year ago. The highest estimate on the Street is at 32 cents a share. The best upside surprise in net the past four quarters was for SLXP to top the consensus by 2 cents a share. Profits for the first quarter this year should rise to 15 cents a share from 8 cents a year ago.
The company will report results on Feb. 28.
Strategy Opinion: SLXP looks good on this breakout. TTD did spot thrusts of buying during the day. TTD is targeting SLXP for a push to 20 within the next few months. A protective stop can be placed near 13.90. TTD rates SLXP a good intermediate-term play.
Sponsorship: Good. Several 5-star rated funds are holders of the stock. Wasatch Micro Cap Fund, 5-star rated, was a recent buyer of 85,000 shares. However, 5-star rated Wells Fargo Advantage Fund, the second largest fund holder with a 0.88% stake, was a recent seller of 216,000 shares.
Insider Activity: Slightly Bullish. Insiders were buyers around 14 recently. There was some insider selling. Six analysts follow the stock, 2 have a buy, 4 are neutral.
| TTD's Breakout Profile
Rating Salix Pharmaceuticals Inc. (SLXP) |
| 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 - 5
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Just a few breakdown stocks today, some linked to weak operations. Bears be selective.
(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.)
POSS, based in Minneapolis, makes products to treat blood cots. Annual revenues: $62 million. Today, POSS falls sharply after reporting net for the fiscal second quarter ended January 31 of one cent a share, down from two cents a year ago. The company said the results were within prior estimates. However, the stock reacted very bearish to the news. TTD sees the stock as a good short for aggressive bears.
So far today, POSS is trading 293,047 shares, four times its normal daily volume of 70,000 shares. TTD's clip of the tape today shows the stock got off to a bearish start. That was when a big block of 11,000 shares crossed the tape on a down tick to $12.33 from the prior trade at $12.35.
The company's AngioJet Rheolytic Thrombectomy System is a minimally invasive catheter system that removes blood clots without major surgery.
The system uses a catheter to pump saline jets to the source of the clots and pulverize the clot material, sending it back through the catheter for disposal. It is approved for use in heart and leg vessels and hemodialysis grafts.
POSS is pursuing approval to use AngioJet in the lungs, brain, and deep veins. The company markets its products in the US through a direct sales force and internationally through distributors. POSS received FDA approval for its next-generation AngioJet Ultra late in 2006.
Although earnings for the fiscal year ending July 30 are projected by analysts to climb 54%, TTD sees the weak action in the stock as a sign there could be problems ahead.
TTD's daily chart shows that the accumulation - distribution line had been trending lower before the stock broke down. That would say that some "smart money" was leaving before the earnings report. The TTD momentum indicator top of the chart has fallen into the bearish zone. TTD is calling for POSS to decline to 9.50 within the next few months. We see the stock as a good trading short.
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.)