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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 - 13
Stocks Screened- 8,200
Bull side - Some interesting breakout plays with a small group dominated by aluminum stocks due to Alco's offer for Alcan.
Long-Term Environment for bulls: Favorable.
Market Status (Daily) - NYSE Bullish, Nasdaq Bullish
Market Status (Weekly) - NYSE Bullish, Nasdaq Bullish
CPLA, based in Minneapolis, Min., operates Capella University, an online university that offers undergraduate and graduate degree programs in business, organization and management, education, psychology, human services, and information technology. Annual revenues: $149 million. CPLA breaks out from a 10-week flat base today and makes a new high.
CPLA, a new issue, from last year, is trading 119,039 shares, triple its normal daily volume of 45,000 shares.
Today, the company reported strong earnings and also gave details for a planned secondary offering.
TTD featured CPLA as a breakout at our midsession show on the Web today.
CPLA reported net for the first quarter increased 64% to 23 cents a share from 14 cents a year ago. The 23 cents topped the consensus Street estimate of 19 cents a share, which was also the highest on the Street.
As TTD has said a company that can post quarterly net above the highest estimate on the Street has good chances to move higher not only for the day but for the next few weeks. That is because analysts need to raise estimates for the year and reevaluate the company in a more bullish way.
The company said enrollment for the quarter increased 21% to 19,151 from a year ago. It also said it came out with three new degree programs.
CPLA's employs about 740 faculty members. Students seeking doctoral degrees account for 47% of enrollment.
Nearly 70% of revenues are from federal student financial aid programs. Chairman and CEO Steve Shank, who founded the company in 1993, owns 21% of the stock.
CPLA did not give specific details on its planned offering.
TTD's daily chart shows the classic breakout from a flat base. The expansion in volume is good. The stock is thinly traded. However, with an offering it should get more play, especially from institutions.
Technically, the stock is very bullish. The TTD momentum indicator is bullish and has been for several weeks. The accumulation - distribution line has hit a new high confirming the price action of the stock.
This year, analysts are forecasting net at $1 a share. Results for a year ago were not available. Going out to 2008, analysts look for a 30% jump in net to $1.30 a share. The stock sells with a price-earnings ratio of 38 based on this years' projected net.
Strategy Opinion: CPLA is a "new face." Education stocks had big runs a few years ago, but there is always room for a new school stock that is very profitable. TTD suggests a full position. We are calling for CPLA to climb to 46 within a few months. A protective stop can be placed near 35. TTD rates CPLA a good intermediate-term play provided earnings growth remains strong.
Sponsorship: Good. The largest fund holder is Lord Abbett Developing Growth Fund, 3-star rated, with a 0.89% stake. It was a recent buyer of 37,000 shares. A key buyer was the second largest fund holder, 4-star rated, JP Morgan Small Cap Equity Fund, which purchased 16,000 shares.
Insider Activity: Slightly Bullish. Some light insider buying around 25. No selling. Three analysts follow the stock, and all have a buy.
| TTD's Breakout Profile
Rating Capella Education Co. (CPLA) |
| 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 | 13 | 0 | 1 |
(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 - 3
Stocks Screened - 8,200
Long-Term Environment for bears: Unfavorable.
Bear Side - Only a few breakdowns today. Bears be conservative and selective. TTD's recent short Las Vegas Sands (LVS) falls 1.65 to 80.16 today.
(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.)
ADBL, based in Newark, N.J., sells downloadable audio versions of books and print publications such as The New York Times. Annual revenues: $82 million. ADBL falls sharply today undercutting is recent low. The action draws a TTD short play suggestion. ADBL is trading 380,875 shares, almost double its normal daily volume.
The stock is low priced and volatile. It has a beta of 4.58, which means it is four times more volatile than the stock market.
Late last week, ADBL came in with a first quarter loss of 5 cents a share compared with a loss of 12 cents a year ago. The Street was expecting a loss of 2 cents a share. So, it was a greater deficit than expected.
For the year, the Street is forecasting a loss of 3 cents a share compared with a loss of 34 cents a share a year ago.
The company has more than 120,000 hours of content. It also offers radio broadcasts, speeches, and performances. The service has some 37,000 titles and programs. Users can either buy individual titles or subscribe to AudibleListener and download content at a discount.
Users can listen to programs on their desktop computer, or via an MP3 player or PDA. Customers who subscribe to a recurring title (newspaper, magazine, radio program) can have it automatically delivered to their PC, or wirelessly to their handheld device. Audible also offers a CD burning feature for listening on CD players.
The stock had a spike move higher in early March. However, today's breakdown is sharp. The stock's TTD momentum indicator is very bearish. The accumulation - distribution line is trending lower showing heavy selling pressure. TTD is targeting the stock for a drop to 7. We see ADBL as a good short trading play 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.”
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.)