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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 - 22
Stocks Screened- 8,200
Bull side - Good number of breakouts today with some interesting plays. Bulls be venturesome.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bullish, Nasdaq Bullish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
STKL, based in Ontario, operates in food production and distribution business. Annual revenues: $598 million. STKL breaks out from a 7-week, near-term flat base today and makes a new-all-time high. Trading so far today has swelled to 1.8 million shares, triple its normal daily volume of 592,000 shares. The stock is one of the better performing small cap issues.
The breakout today also represents a push out from a 24-week, double bottom basing pattern.
The tape action is good. In the morning TTD spotted a big block of 10,000 shares crossing on an up tick to $12.10 from the prior trade at $120.09. That was followed by a big block of 32,000 share at $12.10.
TTD sees the action as very bullish.
STKL produces and sells natural, organic, and kosher food products in Canada and the US.
The company also owns 70% of Opta Minerals, which recycles industrial waste, makes abrasives and bentonite clays for foundries. SunOpta's BioProcess group makes a steam explosion system to separate cellulose and nonwood fibers. It is used in the production of pulp and ethanol.
STKL's breakout today looks very good and is supported by big volume. The stock's price spread (range from high to low for the day) is wide and that is bullish.
The stock showed a nice contraction in volume prior to the breakout - that is a plus.
STKL's TTD momentum indicator is very bullish. (see top of the chart) The accumulation - distribution line is neutral, near-term, but looks okay.
TTD's long-term chart shows a big cup-and-handle base and now a breakout. Very impressive!
This year, STKL's earnings should soar 100% to 38 cents a share from 19 cents a year ago. The stock sells with a price-earnings ratio of 31 based on this year's projected net.
STLK's projection of net this year is 35 to 40 cents a share. Revenues are expected to rise to $740 to $760 million from the 598 million last year.
Revenue growth in the fourth quarter rose 34%. It reflected growth in the company's core business.
Looking out to 2008, STKL's earnings should climb 24% to 47 cents a share.
Strategy Opinion: STKL is a very good looking small cap play with a solid earnings outlook. TTD sees the stock making a run to 15.50 within the next six months. A protective stop can be placed near 11. TTD rates STKL a very good intermediate-term play because of the strong earnings outlook and reasonable valuation.
Sponsorship: Very Good. The largest fundholder is 4-star rated Royce Opportunity Fund with a 1.4% stake. It was a recent buyer of 220,000 shares. The largest buyer recently was Fidelity OTC Fund which purchased 775,000 shares making it the second largest holder with a 1.3% stake. There has been no selling by the top fund holders lately.
Insider Activity: Neutral. Not much action. Two analysts follow the stock, and both have a strong buy.
| TTD's Breakout Profile
Rating SunOpta Inc. (STKL) |
| 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 | 14 | 0 | 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’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 - Only a few break down plays today as market rally remains in place. 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.)
NNI, based in Lincoln, Neb., formally known as National Education Loan Network, serves students, universities, and lenders in all aspects of the student loan process. Annual revenues: $1.2 billion. NNI falls sharply today in heavy trading to undercut its key support area near 24. TTD sees the stock as a good short as earnings for this year will decline.
So far today, NNI is down about one point. Volume is running at 768,100 shares, almost four times its normal daily volume of 175,000 shares. TTD's clip of the tape shows the stock came under heavy selling pressure near the close on Wednesday. A big block of 5,400 shares crossed on a modest down tick to $24.23.
NNI originates loans for itself and its partners. Most of the loans are originated under the Federal Family Education Loan Program (FFELP).
The company also manages a $24 billion student loan portfolio. It is one of the leaders in total student loan assets managed.
This year, analysts expect NNI's earnings to decline 7% to $2.09 a share from $2.24 a share a year ago. The upcoming first quarter will be very weak. Net should drop 21% to 51 cents a share from 65 cents a year ago.
Technically, NNI has everything a bear could ask for. The stock is in a solid down trend and breaking lower on expanding volume. The TTD momentum indicator (top of the chart) is bearish and the accumulation - distribution line shows clear selling pressure. TTD is targeting NNI for a decline to 18 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.)