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 - 14
Stocks Screened- 8,200
Bull side - Modest list of breakouts with some less-known stocks breaking out today. Overall, quality below average. Bulls be selective.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bearish, Nasdaq Bullish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
MIDD, based in Elgin, Il., makes commercial and institutional food-service equipment used in kitchens. Annual revenues: $317 million. MIDD breaks out from a six-week flat base today and hits a new high. MIDD is a thinly traded stock. However, it is a leader and making new highs. It is the kind of stock that comes under the radar screen of many investors. Today, the stock breaks out with expanding volume during a weak stock market day. That is impressive.
So far today, MIDD is trading 112,926 shares, double its normal daily volume of 54,000 shares. Being a high priced stock, it may not attract that much interest from average investors. However, that can also be a plus. Since the company's earnings are strong, the stock should be in strong hands.
MIDD makes equipment for use in such operations as restaurants, retail outlets, and hotels.
Its Cooking Systems Group makes conveyor cooking equipment (Middleby Marshall); heavy-duty gas equipment like ranges, broilers, and fryers (Southbend); and light- and medium-duty electric cooking equipment like toasters and convection ovens (Toastmaster).
Sales more than doubled in 2002 as a result of its acquisition of Maytag's Blodgett commercial cooking products business.
A look at TTD's daily chart shows MIDD's stock remaining in a strong up trend. The stock has advanced from 75 last September to 118.
Technically, the stock is very strong. First, it has not given any ground in recent weeks and is participating nicely in the stock market's overall advance. The stock's TTD momentum indicator is solidly bullish.
Also, what is impressive is that the stock's Accumulation - Distribution line has pushed to a new high. That is good confirmation that the price advance is being supported by solid buying.
TTD's long-term chart of MIDD shows the stock's powerful bull market
MIDD continues to pursue acquisitions to expand its operations. On February 19, it agreed to acquire Jade Products from Maytag. Jade makes cooking equipment such as ranges and ovens.
MIDD will report net for 2006 soon. The Street is forecasting a 25% increase to $4.99 a share from $3.98 a share a year ago.
Net for the fourth quarter should be very good showing a gain of 31% to $1.19 a share from 91 cents a share a year ago. The highest estimate on the Street is at $1.21 a share. TTD sees chances for an upside surprise. The past three quarters, MIDD topped the consensus estimate by 6 to 15 cents a share.
Looking out to 2007, MIDD's profits should climb 16% to $5.80 a share from the anticipated $4.99 a share for 2006. The stock sells with a 21 price-earnings ratio based on 2007's projected net.
Strategy Opinion: TTD is targeting MIDD for a move to 138 within the next few months. A protective stop can be placed near 110. TTD rates MIDD a good intermediate-term play with potential to surprise further on the upside. The stock looks ripe for a split which could boost the stock. It would give it more visibility and make it more liquid. TTD rate MIDD a good intermediate-term play.
Sponsorship: Good. The largest fund holder is Bjurman Micro Cap Growth Fund with a 1.7% stake. The 3-star rated fund has held its position steady. The largest buyer lately was Wells Fargo Advantage Growth Fund, which picked up 10,000 shares. There are just 7.9 million shares outstanding. Funds hold 1.8 million.
Insider Activity: Slightly Bearish. Insiders were sellers late last year around 105. There was some light insider buying. Three analysts follow the stock, 2 have a buy, one is neutral.
|TTD's Breakout Profile
Middleby Corp. (MIDD)
|TTD Check List||Bullish||Bearish||Neutral|
|Near 52-week High||YES|
|Price Trend - Daily||YES|
|Price Trend - Long Term||YES|
|Price Daily Spread||YES|
|Base - A-D||YES|
|Prior Breakout Success||YES|
(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 - 8
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Small list of breakdown stock today. TTD's short play from Thursday, homebuilder Ryland Group (RYL) falls 1.28 to 50.64 today. Homebuilding related issues acting weak now. 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.)
BEAS, based in San Jose, Ca., provides application server software and middleware used by software developers to establish platforms (which span mainframe, client-server, and Web-based environments) upon which software applications run. Annual revenues: $1.2 billion. The stock gaps sharply lower today after the company reported just "certain financial data for the year." It said final earnings would come after a special audit for stock options.
The stock's reaction tells the story and it looks bearish. The stock is down 1.28 points so far today. Volume has swelled to 50 million shares, five times its normal daily volume of 9.6 million shares. The selling pressure on the stock has continued into the afternoon.
TTD's clip of the tape shows a big block of 153,100 shares crossing on a down tick at $11.78 from the prior trade at $11.80.
The company's products support functions such as transaction processing, billing, customer service, provisioning, and securities trading.
BEAS also offers services such as training, maintenance, and support. BEA's clients come from industries including retail, financial services, health care, manufacturing, and telecommunications.
Analysts are forecasting a 5% decline in net for the fiscal year ending January 30 to 39 cents a share from 41 cents a year ago. However, the action in the stock may indicate an even further drop in profits.
The stock has been acting weak. It had a technical price breakdown in November (see chart). It never recovered and now is breaking down again. TTD is calling for BEAS to fall to 9 within the next few months. We view the stock as a very good trading short for aggressive bears, with the additional wild card of a potential sharp drop if earnings disappoint big.
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.
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(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.)