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 - 8
Stocks Screened- 8,200
Bull side - Just a few breakouts today but a few interesting plays for aggressive bulls.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bullish, Nasdaq Bearish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
LNET, based in Sioux Falls, SD, provides broadband, interactive and other video services to the lodging industry, Annual revenues: $286 million. LNET drives powerfully out of a nine-week flat base today. The stock got a boost from a brokerage recommendation from Soleil Research Associates. Trading in LNET jumped to 370,810 shares, almost triple its normal daily volume 139,000 shares.
LNET provides free and fee-based guest services, including cable TV, on-demand movies, Nintendo video games, DIRECTV broadcast satellite (DBS) TV programming, and Internet access to about 5,800 hotels with about 1 million rooms.
The company installs broadband local-area networks.
Its interactive services include video checkout and room service menus. LodgeNet is spreading its system architecture and technology through licensing partners outside North America.
LNET's breakout today represents a move to a new high. (See TTD's long-term chart). That could well have attracted buying to the stock. Nevertheless, TTD still sees more on the upside. Our clip of the tape (see table) shows that a big block of 10,814 shares crossed on a modest up tick to $28.83 near the opening from the prior trade at $28.82.
TTD's daily chart of LNET shows the formation of a flat base between 24 and 28. The base started out being "tight," but then there was a mini-shakeout to the downside. The stock then recovered nicely and now breaks clear of the base.
The stock's TTD momentum is strongly bullish. (see top of chart).
The accumulation - distribution line has started to turn up and resume its up trend.
LNET turned into the black last year. This year, analysts see profits soaring 213% to 31 cents a share from 10 cents a share a year ago. The stock sells with a big p/e ratio of 96. That can be justified by the fact next year's profits should spurt 106% to 65 cents a share.
For 2006, LNET posted revenues of $288 million. The company has been on the move making acquisitions to expand its operations. In December, it agreed to buy Command Corp. for $380 million.
For the first quarter, LNET's profits should rise to 2 cents a share from a loss of 4 cents a share a year ago. The highest estimate on the Street is at 4 cents a share.
Looking out to the second quarter, LNET's net should rise 150% to 5 cents a share from 2 cents a year ago.
Strategy Opinion: LNET is a stock most suitable for aggressive investors. The breakout is strong, although coming with a push from an analysts. TTD suggests a scale-in strategy. We are targeting LNET for a move to 37 within the next several months. A protective stop can be placed near 26. TTD rates LNET a very good intermediate-term play with potential to surprise on the upside with earnings.
Sponsorship: Very Good. The largest fund holder is Vanguard Explorer Fund, 4-star rated, which holds a 4% stake. It was the largest buyer recently purchasing 105,000 shares. The second largest fund holder is 5-star rated Fidelity Capital & Income Fund which has a 3.95% stake. It has held its position steady.
Insider Activity: Neutral. Not much activity lately. Five analysts follow the stock, 2 have a buy, 3 are neutral. The sentiment on the Street has been the same for the past three months.
|TTD's Breakout Profile
LodgeNet Entertainment Inc. (LNET)
|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 - 4
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Only a few breakdown plays today. Bears be selective, but be alert to any breakdown in the market. TTD's short play Monday, Trex Co. (TWP) falls 0.77 to 22.14. The short 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.)
BCRX, based in Birmingham, Ala., designs drug candidates using knowledge of the structures of targeted enzymes. Annual revenues: $4 million. BCRX, a biotech play, breaks down hard today to set off a TTD short play. The decline was linked to the company putting on hold the testing of its product used to treat T-cell acute lymphoma. Volume in BCRX swelled to 1.4 million shares, almost five times its normal daily volume.
A look at TTD's clip of the tape shows the stock started to take a dive early in the day. One key trade in the early going was a block of 1,000 shares that crossed on a down tick to $8 from $8.02.
BCRX said enzymes make ideal drug targets as they mediate biochemical processes along disease pathways, are relatively easy to crystallize, and have small active sites. The firm seeks to design compounds that will fit in the active sites of enzymes and thereby interfere with the progression of disease.
Using this approach, the company has successfully designed several product candidates for cancer, cardiovascular diseases and viral infections.
The set back in the product development obviously stung the stock. Analysts predict BCRX will show a loss of $1.29 a share this year compared with a loss of $1.50 a year ago.
BCRX looks like an idea short for an aggressive bear. The stock's gap move to the downside comes with big volume. The TTD momentum indicator (top of the chart) is bearish. Most importantly, the accumulation - distribution line is in a dive indicating heavy selling pressure. TTD is targeting BCRX for a drop to 5 within the next few months. That is about a 37% gain for bears.
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.)