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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 - 11
Stocks Screened- 8,200
Bull side - Breakout list contracts today. Some interesting plays. Bulls remain alert as market continues to act well with breakout stocks.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bullish, Nasdaq Bearish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
BEZ, based in Fort Smith, Ark., makes industrial electric motors, controls, and drives that power industrial pumps. Annual revenues: $811 million. BEZ gaps out of its two-month, flat base today after reporting a big upside earnings surprise. Trading so far today has swelled to 1.7 million shares, five times its normal daily volume of 278,000 shares.
The tape action remained bullish in the afternoon. TTD highlights a big block of 10,000 shares crossing at $44, a price within a sequence started by an up tick.
The company checked in with a 53% increase in net to 52 cents a share from 34 cents a year ago. The 52 cents topped the consensus estimate on the Street of 37 cents a share and also the highest estimate of 40 cts.
It was a big upside surprise. The company is benefiting from the acquisition of Dodge and Reliance.
BEZ makes AC and DC motors that supply from 1/12 horsepower up to 1,500hp. Its other products include speed reducers, industrial grinders, and polishing lathes.
The company sells primarily to OEMs in the agricultural and semiconductor equipment industries and to independent distributors for resale as replacement parts.
The stock responded very bullishly to the news. The gap move off the base on the big upside earnings surprise bodes well for a follow through move. Technically, the stock has been in a good up trend (see TTD's long-term chart).
The stocks accumulation - distribution line was very strong during its basing work. That was a tip off that buying was taking place as the stock was trending sideways.
The Street was looking for a 22% rise in net to $1.79 a share from $1.46 a year ago. However, TTD would boost that forecast to net of $1.90 a share - 30% gain in net.
The stock sells with a price-earnings ratio of 22 based on our $1.90 forecast. So, that is reasonable, or perhaps a big of favorable valuation for growth investors.
For the upcoming second quarter, net should rise 17% to 45 cents a share from 38 cents a year ago. TTD sees good chances for that to be boosted.
Strategy Opinion: You might say BEZ is a "nuts and bolts" type company. Not to exciting. However, the profits are rolling in. TTD is targeting BEZ for a move to 52 within the next few months. A protective stop can be placed near 40.
TTD rates BEZ a good intermediate-term play.
Sponsorship: Good. The largest fund buyer lately was 3-star rated Westport Select Cap R Fund which purchased 225,000 shares. The largest fund holder is T. Rowe Price Small Cap Stock fund, 3-star rated, which has a 4% stake.
Insider Activity: Neutral. Not much action lately. Five analysts follow the stock, 3 have a buy, 2 are neutral.
| TTD's Breakout Profile
Rating Baldor Electric Co. (BEZ) |
| 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 - 7
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Small list of breakdowns today, but some interesting plays. 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.)
QLGC. based in Aliso Viejo, Ca., designs switches, controllers, host bus adapters, and software for storage area networks. Annual revenues: $494 million. QLGC gaps lower today to set off a TTD short play. The stock's decline comes after it reports a drop in net for the fiscal fourth quarter ended April 30 to 12 cents a share from 19 cents a year ago.
So far today QLGC is trading 17.1 million shares, five times its normal daily volume of 3.1 million shares.
TTD's clip of the tape shows the stock getting off to a bearish start in the morning. A big block of 50,000 shares crossed on a significant down tick to $16.90 from the prior trade at $16.95.
QLGC's net was a disappointment. TTD expects analyst forecast to be lowered for the year. The Street had been looking for a 16% rise in net to 92 cents a share from 79 cents a year ago.
QLGC offers devices based on SCSI (small computer system interface), iSCSI (Internet SCSI), and InfiniBand technologies. It sells its products directly to server and workstation manufacturers, and through distributors. Customers are Dell, Fujitsu, Hewlett-Packard, IBM, and Sun Microsystems.
QLGC's stock fell from 23 late last year to around 17. It was trying to form a bottom but is now failing and breaking down. TTD sees the stock as a good short for aggressive bears. We are targeting QLGC for a decline to 12 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.)