Wednesday, July 7, 2010

Thomas and Betts (TNB): Buy on Valuation, Technicals, and Seasonality

Thomas and Betts (TNB) is trading 10.75X earnings, 0.95X sales, 3.88X cash value, and 8.6X free cash flow with a $1.8B market cap. Shares were raised to Outperform at Wells Fargo on June 1st and are down around 12% since then, likely on concerns over residential construction.

However, shares have become a value play and the chart sets up well here as shares re-test a prior bottom and breakout level around $33, setting up for a bounce with shares extremely oversold, and the CCI starting to trend higher with bullish divergence.

The Company manufactures heating, ventilation, and Air Conditioning systems. The firm also produces switchgears for Utility companies and other electrical components. With the recent heat wave I came across TNB as a play on the air conditioning systems, and also the Utility industry is looking to upgrade its systems.

The valuation and chart sets up for a solid reward/risk, entering a long around $34 a shares and having a $32.50 stop, with a target move to $38.

Wednesday, June 23, 2010

Wednesday, June 9, 2010

Sunday, May 23, 2010

Week of May 24th to May 28th Events

I provide the week ahead preview to my subscribers in the weekly Options Hunter Newsletter. Here is a sneak peak at the events you should be watching this week:

Week Ahead: Earnings are few and far between this week as the season comes to a close but we will hear from Medtronic, Campbell's Soup, Heinz, CostCo, NetApp, AutoZone, Tiffany's, Toll Brothers, American Eagle, Big Lots, J Crew, Blue Coat Systems, Take Two, and OmniVision. Housing data including existing home sales, Case Shiller, and New Home Sales are in focus in the front half of the week for economic data, while GDP, Personal Income, Consumer Sentiment, and Chicago PMI dominate the latter half of the week. It is also a fairly light schedule for Fed speakers with Bullard on Tuesday and Thursday, and Lacker on Wednesday. A look at the upcoming schedule this week:

Monday: Exiting Home Sales; Earnings from CPB, DCI, PVH; Analyst Meetings at HK, ARBA, HRS; BofA/Merrill Services Conf. (XRX, IT, CATM, MHP, GPN, IPG)

Tuesday: S&P Case Shiller, Consumer Confidence, State Street Investor Confidence, Bullard Speaks at 11:15am; Earnings from MDT, DSW, HEI, NZ, TIVO, AZO, CBRL, FLO, SAFM; Analyst Meetings at AMSC, FLEX, MFE, NICE; B. Riley Investor Conf. (SNAK, SHOO, VLCM, HIL, TYL), BofA/Merrill Services Conf. (CBG, WU, ADS, DV, VRSK, EXBD, ESI, ACN), Stephens Spring Investment Conf., UBS Global Oil and Gas Conf. (DVN, HAL, BHI, NBL, NBR, NFX, APA, HP, OXY, RDC, COP, UNT, PXD)

Wednesday: Durable Goods Orders, New Home Sales, Lacker Speaks at 4:15pm; Earnings from DBRN, JAS, AVGO, SIGM, SMTC, BWS, SYNO, TOL, AEO, FRED, PAY, NTAP, RUE; Analyst Meetings at DNR, ITRI, NWL, VQ,ARW, FOE, SFG, TMO, NTRS, WRI, YHOO, EW; B. Riley Investment Conf., BofA/Merrill Services Conf. (V, COCO, APOL), Barclays Communications and Media Conf. (AMD, CMCSA, ATHR, INTC, LEAP, SWKS, QCOM, LINTA), Citi Global Healthcare Conf. (DNDN, MRK, GILD, HUM, HOLX, REGN, BAX, MHS, MD, PFE, CAH, CELG, AET, ISRG, VRUS, VVUS, AUXL, MDT, TRGT, AMLN, XNPT, POZN, INCY, WPI, UTHR), Janney Montgomery Consumer Conf. (OMX, HD, ERTS, LOW, GMCR, MED, VPRT, HLF, BJ), Kaufman Cloud Computing Conf. (SFSF, RAX, SVVS, CRM, TMRK, AKAM, BMC), UBS Global Oil and Gas Conf.(MRO, CHK, SWN, APC, COG, RRC, NE, CAM, KWK, FST, CLR), Wells Fargo Gaming Conf. (PENN, IGT, MAR, GET)

Thursday: GDP, Jobless Claims, Fed's Balance Sheet, Bullard Speaks at 2:30pm; Earnings from DMND, ESL, GES, JTX, OVTI, SEAC, TMRK, BRLI, COST, GCO, MNRO, HNZ, BCSI, BIG, HGG, JCG, MOV; Analyst Meetings at BRS, DNR, SYMC, NEM, ES, BGCP, PSSI, AEL; Barclays Media and Tech Conf. (T, MOT, CAVM, TXN, BRCM, NTGR, HLIT), Citi Global Healthcare Conf. (ALTH, BDX, MCK, IART, VRTX, MYGN, AMAG, MNTA, COV, NPSP, CFN, CLDX, ISIS, KERX, HGSI), UBS Global Oil and Gas Conf. (EOG, SD, HERO, TDW, RIG, XEC, PXP, WFT, DRC, HES, OIS, SFY)

Friday: Personal Income, Chicago PMI, Consumer Sentiment, Farm Prices; Earnings from MENT;

Thursday, March 11, 2010

Polycom (PLCM) - Inverse Head and Shoulders Breakout

Broke out past key resistance on 1.7X relative volume

Ready for an easy move to $35 highs from 2007

Orient Express Hotel (OEH): By the Book Breakout

Triangle Breakout on 2.7X Relative Volume Above Upper Keltner Channel

Shares closed at $12.30 today, and I see this as a double in 2010 - Target $25

Thursday, March 4, 2010

Verisign (VRSN): Great Breakout and Bullish Action

Verisign shares broke out of an ascending triangle implying a move that is likely to see resistance at $33, more than 25% higher from here. The owner of the .com and various other Internet identifications is likely to continue to experience strong growth, and recent price increases should boos the bottom line. Also, cyber security continues to be a major threat, and VRSN has authentication and security software. There is also likely to be a surge in business on the mobile end with most smart phones having internet access. Shares trade 15.3X next year's earnings estimates, and just 3.3X cash value.

Today, a large options trade suggested a sustained move higher in shares:

VeriSign (VRSN) traded a 2,000 contract January 30/25 bull reversal trading for a $1 credit, selling the $25 puts and buying the $30 calls in a leveraged bullish bet.

The chart set-up is below, and a break through the 200 week EMA that coincides with the 38.2% Fib level of $26.25 is a major buy signal.

Monday, February 22, 2010

Finisar (FNSR): Major Breakout

The $800M market cap maker of networking equipment is on a long road back, trading as high as $410 in the Tech Bubble, and as low as $1.69 in the March lows. Shares are now trading at $12.22 and breaking out of an inverse head and shoulders, implying we could see a move North of $20 by 2012, a solid 66% gain. The pattern is a bit sloppy, but it still implies a major reversal move.

Sunday, February 21, 2010

Defense Stocks on the Offensive

The Aerospace/Defense Sector is hot and the stocks are breaking out. As a group of the 25 stocks that trade 100,000+ shares a day with a market cap greater than $300M it is one of the cheapest groups on valuation as well, here are some stats on the average company metrics:

Forward P/E: 13.5X; Price/Sales: 1.3X; Price/Book: 2.6X; Price/Cash: 13X; Price/Free Cash Flow: 20.9X; EPS Growth this Year 10.7%

There are some great individual value plays here, names that are lesser known like Esterline (ESL) and Triumph Group (TGI).

Here are a few of the charts I like in this group, break outs with a lot of upside:

BE Aerospace (BEAV), Boeing (BA), General Dynamics (GD), Goodrich (GR), L-3 (LLL), Northrop Grumman (NOC), Orbital Sciences (ORB), and Raytheon (RTN). Lockheed Martin (LMT) is the noticeable laggard.










Monday, February 15, 2010

Henry Schein (HSIC) Cup and Handle Breakout

Medical Device Firm Trading at a Good Value and with a 9.83 Short Ratio, Target of $63

Tuesday, February 2, 2010

2010: The Year of Large Cap BioTech

Starting off 2010 the markets had a rough January, losing around 4% on the S&P, often a bearish indication for the year ahead, but BioTech large caps are seeing a resurgence. Breakouts are developing in Amgen (AMGN), Cephalon (CEPH), OSI Pharma (OSIP), Gilead (GILD), Genzyme (GENZ), Acorda (ACOR), Biogen (BIIB), Dendreon (DNDN), Talecris (TLCR), Regeneron (REGN), and United Therapeutics (UTHR).

An FDA approval of Auxilium's (AUXL) XIAFLEX today could also keep the bullish tone for the group.

One laggard has been Onyx (ONXX), so keep an eye on that one.

Thursday, January 28, 2010

Campbell's Soup (CPB) Breaking Out in Down Market

Packaged goods are the best plays with commodity prices falling and Campbells broke out on a volume surge.

Monday, January 25, 2010

Thursday, January 14, 2010

VmWare (VMW) and Wynn Resorts (WYNN): Masterful Gap Fill Plays

I love looking for gap fill plays and sometimes you have to look back a couple of years and I found two great ones with VMW and WYNN today. RSI also broke out in VMW.


Amylin (AMLN): Breaking out Ahead of 3-5 FDA

Monday, January 11, 2010

Thursday, January 7, 2010

Cummins (CMI): A Diesel Powered Breakout

Looking for a break of that 61.8 Fib Level at $51.55 to Drive this to $60.

Plexus (PLXS): Waiting on $30.90 Breakout