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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.
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Total Buy Breakouts so far today - 16
Stocks Screened- 8,200
Bull side - Several big upside earnings surprise stocks breakout today. Bulls be selective.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bullish, Nasdaq Bullish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
FRPT, based in Ladson, S.C., makes armored land vehicles designed to protect troops from landmines, bombs, and hostile fire. Annual revenues: $196 million. FRPT wins a key contract today and its stock responds by rising sharply. The move is a breakout from a 15-week, double bottom or "W" base. It carries FRPT to a new high, which could bring in more buying on Wednesday.
FRPT is trading a hefty 6.7 million shares so far today. That is almost seven times its normal daily volume.
The stock showed big buying in the morning. TTD's clip of the tape spotlights a big block of 116,700 shares crossing on a nice up tick to $23.90 from the prior trade at $23.85.
FRPT won a $490 million contract from the U.S. Marine Corps for 1,000 mine resistant ambush vehicles. General Dynamics will share in the program.
FRPT makes the 22-ton Buffalo, which is designed for mine-clearing operations, and the Cougar, a lighter-weight vehicle with similar armoring that can be used for route clearance support, urban patrol, and other activities.
The Cheetah is the smallest of the company's offerings. It is used for reconnaissance and other urban operations. US Marine Corps accounts for about 59% of FRPT's. The US Army accounts for about 14%.
FRPT's stock gapped higher today. The stock's basing pattern (see TTD's daily chart) was formed after FRPT raced up from 7 last year to a peak of 24. The stock then settled into a basing pattern. TTD's sees the breakout today as good.
FRPT's TTD momentum indicator is strongly bullish (see top of the chart). It turned bullish several weeks ago.
The stock's accumulation - distribution line has pushed to a new peak.
This year, the Street has been forecasting FRPT's net will climb 105% to 70 cents a share from 34 cents a year ago. This new contract could boos that estimate and that for next year too.
The stock sells with a price-earnings ratio of 34. That is reasonable given that FRPT's profits next year should increase 67% to $1.16 a share.
For the upcoming first quarter, FRPT's net should rise to 14 cents a share from a loss of 2 cents a share a year ago. The second quarter profit growth will accelerate. Net should be up 567% to 20 cents a share from 3 cents a year ago.
Strategy Opinion: FRPT has it all going for it. The only risk is if the overseas wars are downsized and demand for FRPT's vehicles should drop suddenly. However, given all things as they are FRPT has the earnings potential to drive its stock higher.
TTD is targeting FRPT for a move to 30 within the next few months. A protective stop can be placed near 22. TTD sees the "special situation" stock as a good intermediate-term play that should do well provided there are no military cutbacks.
Sponsorship: Average. The largest fund holder is 2-star rated J Hancock Small Cap Equity Fund with a 2.9% stake. It has held its position about steady. A key buyer recently was 3-star rated J Hancock Health Sciences Fund which purchased 184,000 shares.
Insider Activity: Slightly Bearish. There was some heavy insider selling late last year by the company's CEO Gordon McGilton. Three analysts follow the stock, and all have a buy.
|TTD's Breakout Profile
Force Protection Inc. (FRPT)
|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 - 7
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Small number of breakdowns today, but some interesting plays. TTD short from Monday, Home Inns (HMIN) drops 1.65 to 31.72.
(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.)
LXK, based in Lexington, Ky., makes computer printers. Annual revenues: $5.1 billion. LXK gaps lower today after reporting disappointing revenues for the first quarter. The stock is down almost 6 points so far today. Volume is running at 6.9 million shares, six times its normal daily volume of 1.2 million shares. Technically, the stock is breaking down from a head-and-shoulder pattern.
LXK came in with first quarter net from operations of 955 cents a share, down from $1.03 a share. Revenues were down 1%.
A look at TTD's clip of the tape shows LXK came under heavy institutional selling pressure in the morning. That is when a big block of 200,000 shares crossed the tape on a down tick to $55.90 from the prior trade at $55.93.
LXK makes laser printers and ink jet printers. The company makes its own machines, which speeds the product cycles. The company sells via distributors like Ingram Micro and Tech Data, and through retailers CompUSA and Best Buy.
This year, analysts are forecasting a 3% decline in profits. Net for the upcoming second quarter should be down 6%.
TTD's daily chart of LXK shows the run up and peak at 74, then the pull back and attempt to find a bottom. It did not. Today's breakdown is a gap drop on big volume. TTD is targeting LXK for a drop to 48. We rate the stock a good trading short for aggressive 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.)